Tuesday, 4 August 2009

Don't judge me

Paul Krugman has a post entitled Rewarding bad actors. He takes the view that two situations - the profits from high frequency trading at Goldman (and presumably elsewhere) and the payout to Andrew Hall at Citi's Philbro arm - are undesireable. The common thread, he says, is
in both cases we’re looking at huge payouts by firms that were major recipients of federal aid... What are taxpayers supposed to think when these welfare cases cut nine-figure paychecks
Now, I happen to agree with Krugman that both of these situations suck. However, I think his characterisation of the problem is wrong. He says.
we’ve become a society in which the big bucks go to bad actors, a society that lavishly rewards those who make us poorer
In other words, the problem is bad people. That's too easy. It allows us to point out fingers and take no responsibility. No, the problem isn't evil people. The problem is that we have created a system where unhelpful actions are rewarded. It is the system that is at fault, not the actors. This means that many people are responsible: everyone who failed to promote or support change, and all of those who shaped and defended the current system. Yes, that does include me. But at least I am trying to promote a debate about what rules we need for the future.



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