A year ago, we were outraged that bankers were collecting huge bonuses while their companies were in the toilet. "Bonuses should be tied to performance!", we cried, secretly pleased to hear how business-savvy we sounded.
Since then, the banking business has picked up. Yes, many of those companies are only here today because we all invested heavily in them. But my retirement account is up 25% for the year. That's not because the government bought stock in the banks; it's because everyone else bought stock in the companies my account is invested in. We're still complaining! "How dare those bankers take bonuses, just because their companies are doing well. We got them where they are today!"
Yes, we did. We invested money in the banks because we wanted them to succeed. They have. We wanted them to pay out bonuses when they're doing well, not when they're doing poorly. They're doing well. So I say: sit down, calm down, and cut them some slack.
The fundamental question is, do you want the government setting compensation levels for private companies or not? To the extent that our tax dollars paid for voting shares of the bailed-out banks, we already have a say in what executives get paid. To the extent that our government bought non-voting shares, we don't. Those are the rules everyone plays by, public investors and private, in every industry, in good times and bad. Let us run our country according to consistent law, not self-righteous outrage.
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