Reading the New York Times this weekend it seems clear that the Global Financial Crisis has not diminished the ability of investment bankers to extract bonuses from poorly performing assets and even losses.
I still believe that private profits should also result in private losses. I remember back last year having a discussion with a prominent Australian Venture Capitalist. He held a strong view that the bailout activities were justified, while my view was strongly opposed.
“If a child trips and skins its knee that’s fine, but there is no point letting it fall from a 10 story building. The consequences are too great”
“It’s not a child, they’re investment bankers. And maybe what we need right now is a few of them splattered on the sidewalk.”
My view has not changed.
But it seems the general populous has a short memory as the rot is returning very quickly. In fact, it might do both our economy and our environment good to let the current system bleed for a while. Why not allow time for new eco-friendly industries and egalitarian reward systems arrive?
Startup Blog wonders what your think?
Here’s the startup blog view on the $700b bailout plan.
In a free market private profits should also result in provite losses – not public sharing.
If the crisis didn’t happen the US taxpayers would not have shared in the upside – so why should they bail them out? The fact is – the hard economic lessons need to be learned. The USA economy needs the pain of a recession to re-calibrate the market mechanics and the ‘philosophy’ of the market participants. Unless reality hits – more events of this nature will occur.