I heard a newsreader on the normally reliably socialist BBC this morning commenting approvingly on a proposal by Goldman-Sachs London to limit bonuses to executives of the (technically) failed investment bank to 1 million pounds ($1.6 M) this year. This is being done allegedly to counter “public outcry” over the massive global bailouts of these criminal enterprises.
As we have argued many times, in many places, outrage at bonuses for executives in these failed enterprises (AIG in this case) is COMPLETELY misplaced (letter to Stephan Kinsella re a 3/09 article on Mises.org);
“As I argue with liberals who follow Obama’s lead in decrying the bonuses, I tell them “Look, the bonuses aren’t the problem, the BAILOUT is the problem.”
If the government had simply allowed AIG to go bankrupt, the market would have provided the correct feedback to the managers that had put AIG into such a parlous state.
The company would either be reorganized, and new management brought in, or else it would be liquidated, the managers and traders fired, their assets stripped and sold, they would be driven out into the street by their landlords, many of them would face disgorgement, civil and criminal charges for fraud, etc.
But NO, by bailing out these terribly-run, wealth-destroying companies, our government not only prevented the aforementioned from occurring, it actually VALIDATED EVERYTHING THEY DID.
Thus, from the standpoint of these crooks, they would not be unjustified in claiming “YAY, we saved the company!”
In that sense, those bonuses were not only necessary, they were well-earned. They were equal to the marginal revenue product of their labor.”
Privatize winnings and socialize losses and this is exactly what you get.
Hi: I am beginning a campaign to make some changes to our U.S. Constitution: I have some suggested changes. They basically focus on doing more with less, and focus on ways to select stronger Presidential candidate,less Representatives in the House, less States and State Governments, and more experienced Representative and Senatorial candidates.
My questions are: 1. Are you interested in getting this kind of discussion on your blog? I am looking for a way to get dialogue about changes in our Constitution going, and then consolidating them into suggested changes that are supported by many, and then getting media and Legislator support, resulting in the Congress passing changes to the Constitution. 2. If this is something you are not interested in, would you give me advice on how to go forward with this idea? Thank you, Dick Mastromatteo