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Reply #25: i disagree about the investment bank comment, though only because of how things are structured [View All]

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unblock Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Sep-28-09 03:50 PM
Response to Reply #4
25. i disagree about the investment bank comment, though only because of how things are structured
i agree with your general take on things. the proposed fixed are only necessary because things are screwed up in the first place.

an investment banker, a ceo or cfo of a big corporation can merit millions or more per year, because they make decisions and accomplish things that affect many, many people and billions of dollars. the difference between good decisions and bad decisions means far more than the few millions earned by the person make those calls.

what's screwed up in that model is that that kind of crazy leverage is entrusted to one or two people. we just take for granted the idea that there should be ONE person in charge of an entire multinational megacorporation. well, if you want your power and control that concentrated, it makes sense to compensate that person with a giant paycheck. but a far more sensible model would be to distribute your power and control, introducing checks and balances and controls. you could drastically reduce the risk and severity of any fraud or of screwups or an external surprise sinking the whole company. the investment banker earns his keep by advising well one ceo and one cfo, but only because there's such crazy concentration of power and wealth around. spread things around more prudently and the investment banker wouldn't have such an opportunity to earn crazy money.

but you'd have to give up that ability for one person to move mountains and negotiate a merger or sale of the entire enterprise on the golf course and the way things are set up, there's too much money to be made doing that sort of thing.








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