Comments on: Crossroads http://keywords.oxus.net/archives/2009/03/28/crossroads/ The personal blog of P. Kerim Friedman. Sun, 31 Jul 2011 02:00:52 +0000 hourly 1 http://wordpress.org/?v=3.3 By: PBay http://keywords.oxus.net/archives/2009/03/28/crossroads/comment-page-1/#comment-8880 PBay Wed, 10 Jun 2009 08:57:18 +0000 http://keywords.oxus.net/?p=2827#comment-8880 Populist anger is the worst way of deciding policy. People being paid a lot is not the problem. The problem is that that pay was based on profits that were illusory. And there lies another problem. The problem wasn't the financial industry as a whole--it was certain highly unregulated subindustries including subprime/prime mortgage securitization and CDOs. Although many people made a fortune without having to pay up when the gravy train stopped, that of course, isn't true for a large portion of those at Bear Stearns and Lehman Brothers. There still are large portions of the financial industry that are working right, and they make money. If someone happens to be a star there, it really doesn't make sense to just say he's doing something wrong because of his pay. Look at how the strong banks are clamoring to return TARP money and how they all want exceptions for traders and sales. These people are hard to replace, and they bring in real profits for the banks. It doesn't help anyone to just have an absolute standard about pay. Populist anger is the worst way of deciding policy. People being paid a lot is not the problem. The problem is that that pay was based on profits that were illusory. And there lies another problem. The problem wasn’t the financial industry as a whole–it was certain highly unregulated subindustries including subprime/prime mortgage securitization and CDOs.

Although many people made a fortune without having to pay up when the gravy train stopped, that of course, isn’t true for a large portion of those at Bear Stearns and Lehman Brothers.

There still are large portions of the financial industry that are working right, and they make money. If someone happens to be a star there, it really doesn’t make sense to just say he’s doing something wrong because of his pay.

Look at how the strong banks are clamoring to return TARP money and how they all want exceptions for traders and sales. These people are hard to replace, and they bring in real profits for the banks. It doesn’t help anyone to just have an absolute standard about pay.

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