Quote:
Originally Posted by MS Fowler
Remember in a proper free market system there is the risk/ reward balance. There seems to have been precious little risk in these schemes. That's like removing foxes from the forest and wondering why the rabbit population exploded.
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That's one point the film brings up. Not only was there no risk for the managers making the deals, but the rewards were enormous. The film looks at the history of investment banks and points out that the ones that failed were initially funded by the personal $$ of the owners so risk/reward was closely analyzed. Then with the growth of the capitalist managerial class, the risks are no longer born by the people making the decisions and the rewards in bonuses were/are tremendous. The Europeans argued for a banning of bonus driven salaries.
That is a serious flaw in the Randian driven ideology of people like Greenspan. The 'rational choices' of invester/owners are very different from the choices of manager/investor/bonus receivers.