Alan Greenspan thinks the "skill" of banking executives justifies their outsized compensation. Editorializing in today's Financial Times, Greenspan writes:
The
act’s most surprising failure to rein in supposed market-determined
excess may be its stance towards the outsized (to some, egregious) bankers’ pay packages.
Small differences in the skill level of senior bankers tend to
translate into large differences in the bank’s bottom line. Competition
for even the slightly more skilled is accordingly fierce. And exactly what skill level did these bankers bring to the table over the last few years? Was it the trillions of dollars they lost? Maybe it was their prowess to peddle junk mortgages to misinformed home buyers? How about their clever capacity to unload their garbage debt on the U.S. taxpayer? Or could it be their unique ability to think that leveraging their balance sheet 30-to-1 was a good idea?
Thanks to idiots like Alan "Bubbles" Greenspan and his ilk, rather than throwing these bankers in jail where they belong, their outrageous compensation is defended, and their
crimes skills are celebrated.
Dodd-Frank Fails to Meet Test of our Times
