Back in 2008. My husbands home building company went bankrupt.. The banks gave out loans for spec homes my husband had three at that time.. Well then the housing market crash came and no one was buying houses and we had three to sell.. The banks were bailed out but NOT the home builder. We went through major financial crisis. Now how can the bankers justify huge bonuses. It is criminal. Shouldn't they be paying back the government the bail out money? No one should be making huge bonuses like that. Lower the interest rate. It's like stealing from the public.. There is no way to turn this economy around with this mentality. How can this be stopped or regulated?
I think that governments should intervene to prevent bankers
from being paid large bonuses by their companies while the rest of the country
is suffering through a depression. It is
ridiculous that these companies are paying these CEOs so much money, even while
their companies are losing money. These
CEOs should be indicted, not rewarded.
Bankers who are awarded large bonuses by their companies are more likely to be bribed. They may give special favors to corporations, like lowered interest rates or fund transfers that are not legitimate. If the government intervenes, this process can be stopped, and banking will remain fair to all who use it.
They should not be paid large bonuses after what has happened to the economy, recently. It is a shady business as it is, and I believe that government intervention may be a decent idea. A lot of people who were responsible for the economic depressions were paid millions in bonuses last year.
It is sad that with how bad the economy is and with how bad many CEOs were paid bonuses when they obviously did not deserve then. Adding to the problem is the fact that the money came from bail out money from the government, meant to help the company stand their ground. It is obvious that the banks need some sort of guidance for them to know right from wrong.
Many banks are suffering, most of the biggest ones had to merge, sell out, or get bailed out by the government to survive. Yet during this troubling time, the companies are giving out big bonuses to the people who got the company in trouble in the first place. I could understand a reward for excellence, like if the bankers solved their money problems on their own somehow, but not this accept-government-bail-out idea, and then spend it all giving top executives bonuses. It is not just the amount of money given as a reward, it is the fact a reward was given at all, when they should have been fired without a severance package.
If a bank is having difficulties staying afloat then it should not be allowed to pay those who are preventing it from succeeding by requiring themselves to be paid substantially more than the bank can feasibly afford to pay them. Banks should consider the financial stability and future of their entire bank before allowing any individuals to receive large payments.
Banks are businesses and should be able to pay their employees extra if they so choose. Of course this could be a form of bribery, but bribery can be conducted in secret anyway. It also prevents the business from performing what may actually be a good deed by helping to keep their workers happy and provided for in exchange for being dedicated and loyal employees. Happy employees are good for the economy. They are more willing to work and, with that extra cash, will be willing to spend more as well. And frankly, the government should try to keep its nose out of the free market as much as possible.
The government should avoid meddling in business policy to prevent setting a precedent of government control over industry that is seen in dictatorships. There are other methods that can be used to prevent or cap financial institutions from paying ridiculously high bonuses. An extremely high tax rate on compensation over a certain amount would likely be a more effective tool.
Since bankers earn their bonuses by increasing profits, I think it is only fair that they receive the bonuses their companies want to give them. Having said that, I do believe that the government should intervene when it comes to the practices used to make those profits. In other words, it is not the bankers themselves that are the culprits, but rather the predatory lending laws that allow them to profit at such a high level.
Private industry is just that: private. Even though it may seem unfair for a banker to receive large bonuses, it's the principle that matters. It might not seem like a big deal to take away millions from an already extremely wealthy banker, but once the government has the ability to do so, who's going to stop them from taking bonuses away from everyone? If the government deems a bonus of a certain monetary value to be worthy of preventing today then, tomorrow, they might take away bonuses that aren't very much money at all from people who aren't wealthy. Giving the government the power to do this, especially in a free market economy, will only lead to the government seizing more and more power over private enterprise.
In the United States, we have a free market system. Part of that system is that the government should not interfere with wages and bonuses that private institutions pay. The amount of compensation an individual earns is best determined by the company they work for, and should not be dictated by the government.
The government should not be in the business of regulating a private business in this manner. If the shareholders approve, why is it the government's business? Once the government is allowed to set bonus rates or income rates for this private sector business, what keeps their nose out of any other private sector business? Nothing, that's what. If the business is making enough profit to pay bonuses, more power to them.
Money can be used as an effective incentive for people to do an excellent job. A bonus, especially in the banking industry, would entice bankers to satisfy more customers, bring in more business, and essentially stimulate the economy. To put pressure on companies to NOT provide bonuses, they would have to resort to other methods of motivation.
Though I do not feel large bonuses are a correct way to do business, it is the responsibility of each individual business to conduct themselves in a manner that is both profitable and accountable to its shareholders. The "watchdogs" of this "large bonus" practice should be the public at large, and shareholders protecting their own interests. Government involvement would be expensive, and would be an example of "back seat driving".