What Bankers Can Learn From Girl Scouts and First Year Law Students

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I haven't been blogging much lately, but expect to get back in the swing of things this week as the worst of my writing and teaching pressures seem to be slowing down.

Meanwhile, my better half, Marina Park, put up a great post (I confess to being biased) over at SF Gate, where she blogs at the online home of the San Francisco Chronicle. Marina has a lot of experience dealing with highly paid people who suffer from fits of greed and self delusion (she spent 8 years as managing partner of a big law firm, and I can tell you, that law firms are great settings to study self-enhancement bias — the notion that people are prone to seeing themselves as "better than the rest" regardless of the actual evidence). But what she saw among highly paid attorneys is nothing compared to how greedy the bankers are now acting and how blind they seem to the damage they did and that still persists. In her view, the behavior of the Wall Street Titans clashes with the lessons that she learned as a young lawyer and now as CEO of the Northern California Girl Scouts.

As Marina argues at the outset of her post:

Always leave a place better than you found it — that's from the Girl Scouts.

You are responsible for the reasonably foreseeable consequences of your actions — that's from the First Year Law Students.

The bankers don't seem to quite accept these values or logic. Check out the rest of her post. I am all for paying talented people what they deserve. But I am also all for requiring people to take responsibility for their actions, even if they didn't mean to hurt anyone.

Comments

96 responses to “What Bankers Can Learn From Girl Scouts and First Year Law Students”

January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Entrep_thinking

Actually, it’s the Boy Scouts (not to quibble) but it’s still good words for a world where we can’t get people to pick up their dogs’, er, “gifts”. And I wonder how much narcissism matters…
The research says that people love to feel that The Rules don’t apply to them, that we’re special. A more benign version is that they feel entitled (if not obliged) to make their own rules.. isn’t that what we often celebrate in great leaders & in entrepreneurs?? So when does that go off the rails?
We live in a painfully narcissistic world – when that sense of entitlement meets deep doubts… should we be surprised?
When I studied cults, a recurring comment from the cults was “I’m entitled to my reality” when actually meant “I’m entitled for my reality to be correct” (as in I should not be harmed by the consequences of my beliefs.)
But add enormous power & resources plus a reasonably opaque system… and it’s logical for the “titans” to make their own rules while avoiding the consequences.
Anyway, I’d be curious if others see this as all being driven by narcissism? By a narcissistic society? And what other psychological phenomena might be identified? (Seligman’s learned optimism comes to mind..)
Anyway, nice to have my thinking stimulated this AM – thanks!
@entrep_thinking

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Trevor H

Bob – I don’t think it’s as much blindness to how they are perceived as individuals wanting to be compensated fairly for their work. And in this case, the perception of fair has been skewed by many years of million dollar bonus packages.
Imagine you are MD of a retail investment banking group inside one of the banks. In 2009 maybe your team managed to deliver respectable if not world beating results. You and your team all worked the legendary 80 to 100 hour weeks. And now you’re supposed to be ashamed of the bonus your team earned because of those assholes in trading who you don’t even know? Those assholes in trading very nearly brought your whole firm down, you already had to lay off a few really promising professionals. Through it all you delivered, the bank is profitable and on sound footing now, you feel like you have earned every penny of that bonus.
I don’t know how to tell that person otherwise.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Randy Bosch

Bob, the old Sierra Club Outing’s motto comes to mind: “Take only pictures, leave only footprints.” (and they meant re: footprints – only if you must). Today’s society is “look at me” taking one’s self-determined due and leaving personal pollution in its wake. Responsibility and accountability haven’t been “top-down” in quite a while. Somehow, because of? in spite of? all of the leadership teaching, societal and business sector leadership is even more firmly entrenched in living application of those standards to others, not to themselves.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Bob Sutton

Trevor,
I guess I don’t know to tell millions of Americans who were laid-off, forced to delay retirement,who had to pull their kids out of nice schools, and who have gone bankrupt because they can’t pay their medical bills because they lost so much wealth that the very same companies that were central players in causing this mess (and in fact killed legislation and rules that would have helped prevent it) and that were bailed out by their hard earned tax dollars now demand to be compensated at obscenely high rates because they are back to making big profits.
Sorry, but my view is that as part of the firms that caused these problems, the greed and errors of your industry and firms is your collective responsibility. It is great that everyone is working so hard, but so are people who have suffered massive pay cuts and who are forced to do the jobs of displaced colleagues who have no work now at all.
Your argument is just another example of “mistakes were made, but not by me so I shouldn’t have to pay anything” and it isn’t playing very well right now. Imagine, for example, that a unit of Stanford University was part of consortium of universities that took actions that had devastating (but unintended) effects on millions of people (say they developed a virus that escaped from a lab and killed and injured millions of innocent people). And suppose that Stanford and the other major universities were at the edge of financial ruin because of this group’s actions, and then the Government bailed us all out because the stability of the university system was so important to the functioning of the country and economy. Suppose further that the bailout enabled us to move forward and bring in record grants, donations, and other sources of funds — but widespread suffering still persisted as a result of a foreseeable action by “the assholes” I never met in the labs who took these unreasonable risks because they were so greedy about the upside of their research. It seems to me that Stanford faculty (and faculty at the other universities involved) would have a moral responsibility to continue to do everything in their power to help the sick and wounded and devastated families that continued to suffer even after paying back the Government bailout. It also seems to me that, even if I were in a unit that was not responsible for the virus, and even though I was bringing in lots of money to Stanford, that it would be immoral for me to object if Stanford taxed me heavily to pay to fix the mess caused by our misguided colleagues efforts. That is how I see the situation, and I think that many others do as well.
Again, I am all for paying people very well who create value and people who get extremely rich as a result of their skills are wonderful for America and the world economy, and are inspirational to me. I am not a socialist, I am a capitalist — which to me means accepting the upside and downside of risk — including the collective risk that comes with being part of a larger organization or network of organizations.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Trevor H

Bob – I don’t think we are that far apart. In fact, I used that fictional investment banker just to show that for quite a lot of those big earners it’s not crazy for them to say the mess wasn’t their fault, why shouldn’t their team be rewarded for their success?
I know how crappy the economy is, I was laid off almost exactly 1 year ago. I’d been with the company my entire career, had received many big promotions and expected to retire there.
I’m still struggling, as a management problem though, how to deal with my fictional MD friend. We might like to think that the employees should feel differently, but you have to manage people as they are.
In my case, with my new company, my business unit did OK, not great but a modest profit. Our overall company did not do very well. But I had one smallish unit that performed way above plan. Neither me nor any of my bosses are getting any bonuses. But the manager of this unit is mad that neither he nor his team are getting anything either. In my case it was easy to tell him sorry, but that’s part of the cost of working for a big company, no bonuses for anyone.
But if I go back to the bank example, that excuse doesn’t exist. You can’t plausibly tell the unit manager that there isn’t money for bonuses, because it is there. And lots of it. If you don’t pay them the kind of money they have been primed to expect over many years experience, they will quite rightfully wonder what their motivation should be to put in the extra effort such a business requires for success. Shame is ineffective in this case, not because bankers are some sort of pitiful creature with the humanity wrung out of them so much as, what else are the banks supposed to do with their billions in profits? I seriously can’t figure out, if I were one of the big chiefs in a bank, how I would communicate reduced bonuses with such an income statement behind me.
The fact that there were all kinds of regulatory mistakes and poor business decisions and just an appalling bailout plan under TARP are kind of the equivalent of a sunk cost. Those decisions are in the past, what do you do if you are managing a bank with billions upon billions of operating profit and employees who worked their asses off to make those profits and who are now expecting their fair share? I think a card reading “Thank you for working so hard to save this enterprise in 2009. In lieu of a bonus and as a token of management’s gratitude, $500,000 has been donated in your name to the United Way” is not likely to lead to happy, motivated employees.
I’m not trying to be combative or play devil’s advocate, I really would like to know what the bosses of these firms should be saying to the employees.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Cheryl Wims

Bob,
Speaking of self-enhancement bias, would be curious to hear your take on Clay Shirky’s recent post this weekend “A Rant About Women” in the workplace. It has been so popular this weekend it has been hard to access via Clay’s site.
Essentially he advocates as long as women are poor at behaving as self-promoting narcissists to the point of even falsifying the gradiosity of their skills, and in some cases acting like a “jerk” they will continue to not get as far as men who are more willing to do so. He says Bernie Madoff took it excessively too far and didn’t know when to stop lying, but men, unlike most women and many women in his classes at NYU, are willing to lie or overinflate their skill level on something they maybe vaguely familiar with, to get access to opportunities. What is more men who do this tend to not care if others see them as being a “Jerk” or perhaps “a$$hole”. I must say as a women, I see his point about being humble may not get one into critical opportunities.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Marina

Trevor — Since Bob referred to my post on this topic, I’ll weigh in with my thoughts in response to your questions — which are good ones: What do you tell someone who did what they were asked, worked long hours and expects, in return, to be paid a lot of money. And if the big bank profits don’t go to the employees, where do they go?
First of all, a lot of people who had nothing to do with the financial collapse, both in banks and in other industries, are working hard for less compensation than they have received in the past. As with many nonprofits and other companies, senior staff at Girl Scouts of Northern California took pay cuts and the rest of our staff have had their pay frozen 2 years in a row.
Second, I worked in a big law firm for 25 years and I understand the sacrifices professionals make when they put in those 80 to 100 hour weeks. They do deserve to be compensated, but even more importantly, I think it is a mistake to build any industry on the expectation that people will sacrifice their health, familiy and spiritual well-being to work around the clock. There is a lot of evidence that overworked and sleep-deprived doctors make mistakes. I’ve read that great book by Dr. Dement at Stanford – The Promise of Sleep. He makes the argument (and cites the evidence) that driving while tired is as dangerous as driving while drunk. I’ve also read Too Big To Fail – Andrew Sorkin’s blow by blow description of the round the clock and sleep deprived intervention by a handful of government officials, bank executives and lawyers, as the economy was collapsing in fall 2008. I think our crazed sleep-deprived culture contributed to this massive failure of common sense and I sincerely hope that as part of taking responsibility for cleaning up the mess they created banks and other professional service firms take time to reflect on how to help their employees and the communities they serve live healthier, more productive and sustainable lives. A lot of the employees angry about not getting paid their mega bonuses are even angrier because they feel like they were exploited and lost a year of their lives. Finally, on this point, one of my wise colleagues used to say: “never confuse effort with results.” In these hyped up cultures, people brag about pulling all nighters. They leave their lights on and coats hanging on the backs of their chairs so no one knows they dared to leave and have dinner with their families. And some just work themselves into a frenzy – but with no real productive outcome.
Third, if the profits don’t go to the banks, where do they go? In keeping with the idea that if banks want a free market they need to accept full responsibility for the consequences of their actions, here is a suggestion. We common folk insure against the risky consequences of our behavior – we buy car insurance and liability insurance in exchange for the freedom to drive. We also endure regulation of our driving behaviour to make sure that our tolerance for risk does not harm others. What we’ve learned is that banks will remain too big to fail – so why aren’t we taxing them to keep their ultimate insurer — the government –strong. Obama has proposed taxing the banks to pay back what the government just paid. I’d like to understand why we don’t tax them to build up a reserve for the next time they fail. They could be taxed based on a risk scale — They are free to take the risks, but just as insurers charge different rates depending on whether we’re driving a Ferrari or Camry – the tax should vary depending on the bank’s risk profile. If we’ve learned anything, if banks are going to continue to be too big to fail, then we cant count on insurers to bail them out (we learned that from AIG). Instead, the banks need to pay much higher taxes so the government is strong enough to get them off the hook next time around.
Finally – what do you tell the employee today who worked hard all year and expects a bonus? Tell them that 50% of the bonus pool is going to the federal deficit reduction account because that is the right thing to do for the nation. Then, they will get their fair share of what remains. It will still be a big number. And, you know what? — The employees who actually care about the quality of what they are doing and who want to ensure that our banking system is a positive contributor to our nation’s health, might be happy with that result. The ones who only care about their bonus – well, who needs that attitude right now — maybe our banking system is better off without them.

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 18, 2010

Carol Murchie

My take on the news of bank bonuses is that most of it is earmarked for the top level of executive staff rather than distributed throughout the system. Of course, the main shareholders also are there with their outstretched hands. Is the corporation’s reason for being merely to make a few people extremely wealthy? Better go read Adam Smith more closely.
Once there was the idea that profits in corporations of all kinds should be used partly for rewarding employees, however primarily it could be used to expand operations, improve product quality, fund new initiatives. Perhaps the proposed tax on bonuses should be retooled thusly: turn most of the bonus you get back into new development and you won’t be taxed. Help people stay employed, possibly increase employment. Seems like this is the classic example of leaving the place in a better state than you found it.
Sounds naive? Maybe so, but I think our culture is too in love with the overly complicated solution for every problem. (Is this part of the narcissism that is considered rife in our society?)
As Marina points out, we seem to be in this lemming-like madness to be the one who works around the clock, pushing ourselves to the breaking point, being exhausted. Do you really think mere activity is a substitute for achievement?
Or, as a sign I saw in a shop a long time ago (and still regret that I didn’t buy it at the time): “Of course I don’t look busy, I did it right the first time.” Why work harder if you can work smarter AND have a life and friends, too?

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

dblwyo

Bob – we’re having a discussion based on our emotional reactions to what we see as ethical violations, a lack of social responsibility and an arrogant attitude of entitlement. Please believe I share all that but would like to either shift the ground or expand it. The basic argument for banking as it is it that it makes the economy more productive thru the efficient allocation of capital. In actual fact, setting aside the minor details of nearly destroying Western Civilization, banking/finance instead saddled us with a debt-driven economy that curtailed savings and reduced growth. The “business-case” for leaving things as they are doesn’t hold up. Detailed evidence here:
http://tinyurl.com/ycqfjx5
Any business has a legal responsibility not to mention a social one to mitigate external damages, cooperate where it’s not possible or otherwise act with society to improve the overall responsibility. What you heard this last week from the bankers was that it was their fault but nobody should hold them accountable. That too doesn’t hold: http://tinyurl.com/ygwe9as
Finally the culture of entitlement to an extreme has grown up in the last few decades in a distorted this distorted environment of leverage and mis-allocation (as have all the people now working their). If you listen to the commenters on the business networks the “recovery tax” is unfair and inefficient. What it ignores is that the last several quarters of extraordinary profit were not made by smarts but by gov’t largess funded by us and exploited (I mean that descriptively not pejoratively)and, in a fair market, we’d be entitle to the bulk of the returns. NB: the collapse destroyed almost 15 years of industry profits by the end of 2008, half of that loss has been made back. A windfall profits tax of 50%+ would seem appropriate for the industry.
Let’s start a movement.
BtW – as businesses the banks have been making their money for a couple of decades on surcharges (consider credit cards),i.e. their models are both broken and do not create value for the public at large. When an entity is a clear and present danger to the well-being of society AND refuses to change society has no choice but to change it.
This is a 3rd best policy but far superior to risking everything once again.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Marina – thanks for pitching in! I quite agree with you that a tax fund like we have with FDIC is appropriate. And I consider myself quite the anarcho-libertarian – but IF we are going to have an implicit bailout guarantee THEN the banks ought to fund it. And such a tax, especially if weighted to the size of the bank, may even discourage too big to fail growth as well. Of course, those banks have proven themselves to be quite adept at gaming whatever system is set up to control them. I wouldn’t mind seeing Glass-Steagall reinstated also.
But with respect to handing out bonuses right now, I still think the responsibility of the bank execs has to be to their employees and shareholders and not the federal gov’t. One major change that would be very beneficial is to put the genie back in the bottle and convert the bulge bracket firms back into partnerships. It’s not a cure-all – see Arthur Andersen – but would reduce the risk asymmetry problem for the top managers.
I also appreciate your comments about confusing effort with results. I write a blog inside my company’s firewall where I’ve discussed in detail the challenge in setting objectives and conducting appraisals. A results-only approach rewards the lucky and the good equally. Including effort and more importantly process and behaviors are critical to making the “least unfair” appraisal process you can.
The culture of those banks and similar firms is indeed something. I graduated near the top of my MBA class from a school that sends a lot of graduates to Wall Street so that was an option for me. I make much less money but am far happier in corporate America than I would have been there.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
January 19, 2010

Trevor H

Carol –
I didn’t want to bury this in my longer response to Marina, but in the large Wall Street investment banks there are indeed staggering amounts of money handed out as bonuses throughout the organization. It’s normal for two or three year associates (upper 20s folks with fancy MBAs) to receive multi-hundred thousand dollar bonuses. See http://www.careers-in-finance.com/ibsal.htm for some further info. The big money permeates every level of the organization.
I’m not sure there’s a way to fix the banks in a way consistent with free enterprise and limited government. We could start by cutting them off the public dole at least.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply
February 3, 2010

Kurt

I like this post; its very simple, yet begs a question that seems so simple to answer, but is puzzling. I am reminded of the movie Wall Street with Gordon Gecko as the protagonist. He is the poster child for which many bankers replicated while sinking our country into financial ruin. “Greed is good.” That is the rule to live by according to Mr. Gecko. I am a capitalist, and I agree with the aforementioned quote mostly. Greed creates a competitive market place and things get done more efficiently. I just think that regulation is a necessary part of that greed. Unrestricted greed is what created the situation we are beginning to come out of. You can blame it on as many administrations as you want going back to Reagan, but deregulation is what allowed bankers to break the rules you laid out.

Reply