http://theunbrokenwindow.com/2007/12/30/credit-conundrum/ The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - F.A. Hayek Mon, 01 Dec 2008 22:00:55 +0000 http://wordpress.org/?v=2.3.3 http://theunbrokenwindow.com/2007/12/30/credit-conundrum/#comment-20 Katy Wed, 16 Jan 2008 00:35:07 +0000 http://theunbrokenwindow.com/2007/12/30/credit-conundrum/#comment-20 The incentives for Wall Street financiers may be a little skewed towards ignoring reality, even when they perceive it. Their compensation structure functions, whether the company profits or loses. Heck, even when the CEOs are fired, they receive huge severance packages; and some just change employers. Lastly, the government and Fed are ready to bail them out if things really get bad, so what's the carrot motiving them to keep it clean? The incentives for Wall Street financiers may be a little skewed towards ignoring reality, even when they perceive it. Their compensation structure functions, whether the company profits or loses. Heck, even when the CEOs are fired, they receive huge severance packages; and some just change employers. Lastly, the government and Fed are ready to bail them out if things really get bad, so what’s the carrot motiving them to keep it clean?

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