The Bonus Issue
By Arnold Kling
I was against the bailouts from day one, and I have not changed that position. Government spent my money without my permission on bailing out AIG, Goldman, and the rest. I won’t repeat my references to Henry Paulson as a thug, since that term gives offense. Let’s just say that for whatever reason, the government decided that those companies should not fail.
At this point, why should I care about bonuses to employees of those companies? If the money is taken out of their bonuses, where does it go? Into profits, I suppose. That’s between the shareholders and the employees. Maybe lower bonuses help shareholders by giving them more near-term profits. Maybe lower bonuses hurt shareholders by driving away good employees. Either way, as a taxpayer, I don’t see why I care.
As a taxpayer, I know that I am helping to pay the salary of the “compensation czar” and his staff. I help pay for the cost of hearings were Congresspersons berate the bonuses. Other than that, I do not see what I get out of the whole bonus brouhaha.