Clarification
After rereading my previous post, I think I should add some clarification.
My previous post was meant to be a “research” proposal. I wanted to test whether people form the main street who know somebody in a well paid position are less likely to approve high wages in their friend’s industry.
The idea being, that people from Prague will dream about the life of Hollywood stars and idolize them, while cleaning lady that works for a Hollywood star sees that George Clooney is an ordinary human being like everyone else… The cleaning lady should be less likely to approve his high income (see the prev. post)…
I did want to avoid connection with the crisis. That’s what I meant by saying that bonuses reflect performance. But I agree, it’s a hot topic and is connected with the crisis no matter what one claims.
The Update
I went to Bob Pozen’s (Harvard) presentation of his new book “Too big to save” this monday (It’s on my Christmas reading list, I’ve just ordered it!). After reading the concluding chapter of the book, I have radicalized my view on the response to the crisis and on the aftermath of the crisis.
Yes, I agree, bonuses at THE Investment bank are ridiculous this year. You cannot pay huge bonuses, thanks to your counter party -AIG (,that owes you 12 billion) being bailed out and you getting back every single penny of your bad investment. Entrepreneurship is both about gains and losses of the entrepreneur.
I do not get why Lehman was not saved, while hundreds of non-systematic (read:unimportant) institutions were.
I do not get many things that happened last year… Both because I do not know enough and because some things are too ridiculous for a rational human being to process…
Maybe the policy response was pretty good in the end. Everyone is just being smart ex post (I think this is definitely at least partly true).