Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn)...
However, there is now a rather large problem at play. Given that the financial sector is set to lock on hard to the teets of various governmental schemes there is a new set of rules in place. It is one thing, and quite properly so, to let firms determine the pay and remuneration in a truly free-market system. But, when any firm or industry runs howling into the arms of governmental "care" the rules change. No longer are these firms using monies freely given and freely exchanged by the free market. Using governmental funds which are obtained via force from the taxpayer comes with quite very long and tangled strings.
Those claiming the financial markets have "failed" could not be any further from reality. The markets have in fact worked perfectly. The markets discovered these massive problems in the financial sector and acted swiftly and efficiently, as should be the case. Now that governmentalism is entering the market-place at a 90 degree angle, those involved will be playing by the hamstrung, inefficient, and political rules which marr reality on a daily basis.
Not only will the taxpayer be on the hoof for the billions directly related to the financial sector "help" being provided by governments, at least in the US the taxpayer will undoubtedly get to experience the extreme pleasure of paying for even more "social justice" ornaments being hung on the bail-out Christmas tree:
Still, competing interests were already complicating the negotiations, as Democrats pushed for assistance for distressed homeowners and for oversight authority of the bailout program.US taxpayers should be giving a hearty thanks to the "smartest" guys in the room.
(Update: Start picking your poison)
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