Banks Set for Record Pay - 18% over last year!!

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: Rahul Tongia <tongia () cmu edu>
> Date: January 15, 2010 3:54:37 PM EST
> To: dave () farber net
> Cc: ip <ip () v2 listbox com>
> Subject: Re: [IP] Banks Set for Record Pay - 18% over last year!!
> Reply-To: tongia () cmu edu

> Dave,
>
> I wouldn't necessarily use words like "crime" - it's a manifestation  
> of limited transparency, limited choices, and limited *employment*  
> "liquidity" which leads to the high pay scales for the "geniuses" in  
> finance.
>
> YES, they have a contract with certain bonus claims.  Gee, manage/ 
> manipulate/achieve the targets for a quarter and get massive bonuses  
> - cha-ching. What about long-term value? Sustainable growth?
>
> The problem is, to me, very similar to medicine where we have super- 
> super specialists in fields including cosmetic surgery (or even  
> cardiac surgery) making 10x what a pediatrician or family medicine  
> or even internist makes.  If you claim, oh, supply and demand,  
> you're missing the complete lack of equilibrium at stake.  More than  
> such a thing, at a SOCIETAL level, society needs more doctors of the  
> latter ilk (not to mention nurses). But med students don't want  
> those specializations in part cause the pay is low (and they have  
> debt), and the "stigma" that they weren't good enough to get the  
> super specialization residencies.  Will the market increase the  
> salaries for the needed doctors? They haven't much in the last few  
> years.
>
> The market does work for doctors in some ways - when a family member  
> was choosing where to work after finishing residency, salaries for  
> NYC were half those of rural America - supply and demand. But he was  
> a specialist.  Incentives weren't quite as strong for the family  
> medicine types of fields.
>
> SO, if society would be *better off* (net social welfare) with more  
> general/primary care physicians, and we're not getting them, then we  
> need to (gasp) intervene. Something as simple as interest free loans  
> or partial debt forgiveness are some options.
>
> Thus far, I haven't gotten to the issue of whether certain finance  
> jobs are worth the high salaries (including bonuses).  For those who  
> think we need less of such jobs, maybe ending such bonuses is the  
> market signal that will make sure less people go into that field.   
> One could counter that lower salaries would reduce the incentives  
> for the best and the brightest to join that field.  First of all, I  
> would posit that the people in such jobs aren't the best and the  
> brightest society produces. Second, even if they are, their  
> motivation is financial profit maximization (and self-earning, like  
> all people). The system isn't set up to make sure that societal  
> benefit aligns with such goals.
>
> Rahul
>
>
>
> On Fri, Jan 15, 2010 at 9:39 AM, Dave Farber <dfarber () me com> wrote:
>
> >From: "Ronald J Riley (RJR)" <rjr () rjriley com>
> >To: <dave () farber net>
> >Date: January 14, 2010 09:50:54 PM EST
> >Subject: Banks Set for Record Pay - 18% over last year!!
> >
> >
> >Dave,
> >
> >WSJ is reporting:
> >
> >Major U.S. banks and securities firms are on pace to pay their  
> people about
> >$145 billion for 2009, a record sum that indicates how compensation  
> is
> >climbing despite fury over Wall Street's pay culture.
> >
> >An analysis by The Wall Street Journal shows that executives,  
> traders,
> >investment bankers, money managers and others at 38 top financial  
> companies
> >can expect to earn nearly 18% more than they did last year -- and  
> slightly
> >more than in the record year of 2007. The conclusions are based on an
> >examination of securities filings for the first nine months of 2009  
> and
> >revenue estimates through year-end.
> >
> >http://online.wsj.com/article/SB10001424052748704281204575003351773983136.ht
> >ml?mod=djemalertNEWS
> >
> >===
> >
> >This is absolutely outrageous.  These shysters stole half or more  
> of our
> >collective life savings and then bought and conned our legislators  
> into
> >giving them a bailout which we will all pay for, every man, woman  
> and child
> >will be paying for this for decades.  Nothing has changed in this  
> industry.
> >It is staggering and must be reigned in.  When are the people going  
> to wise
> >up and start tossing incumbents out?
> >
> >Ronald J. Riley,
> >
> >
> >I am speaking only on my own behalf.
> >Affiliations:
> >President - www.PIAUSA.org - RJR at PIAUSA.org
> >Executive Director - www.InventorEd.org - RJR at InvEd.org
> >Senior Fellow - www.PatentPolicy.org
> >President - Alliance for American Innovation
> >Caretaker of Intellectual Property Creators on behalf of deceased  
> founder
> >Paul Heckel
> >Washington, DC
> >Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.
> >
> >
> >
>
>
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