
After a Pause, Wall Street Pay Bounces Back - peter123
http://www.nytimes.com/2009/04/26/business/26pay.html
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barry-cotter
Summary: Pay for those who haven't been fired roughly in line with trends of
last 5-10 years. However many have been fired, ~3/4 at Citigroup for example.
Some investors say that given the losses they have taken the banks should pay
less than the historical norm of ~50% of profits. The executives say if they
don't like it they can sell the stock.

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christofd
The lords of the hype are back at dooming our future (80s corporate raiding,
golden parachutes, dot-com crash, Enron, real estate).

Paul Krugman's article - "Making Banking Boring"
<http://www.nytimes.com/2009/04/10/opinion/10krugman.html?em> \- relates to a
paper by economists Thomas Philippon and Ariell Reshef, “Wages and Human
Capital in the U.S. Financial Industry, 1909-2006”), that shows a high
correlation between a tightly regulated banking sector and economic progress.

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lsemel
Do these bankers create so much more value than, say, entrepreneurs, that
merits paying them so much? Or is there some other reason banks need to pay
such high amounts compared to other types of businesses?

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jacoblyles
<http://en.wikipedia.org/wiki/Supply_and_demand>

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christofd
No, it's NOT the usual supply and demand that's at work here. Government has
deregulated finance to a point where financial leverage went haywire. Further,
you have information asymmetry going on here, where the guys causing all the
ruckus leave the boat before it sinks. And further, being so close to large
amounts of capital wealth brings with it great problems of moral hazard (we
lack tools to deal with this).

Those should be enough reasons to point out, that all is normal and supply an
demand on the market is working is NOT the reason for these income spikes: the
more fundamental (systemic) reasons win out here.

