So, lets see how the public reacts to this new arrogance of the banks that has occured so soon after these same bankers were on their knees begging the public for help.
Sunday, October 18, 2009
banks and managers as agents for owners
It's going to be a very interesting 12 months in relation to bank profits. The profit made by Goldman Sachs and the quick return of smugness in the industry is a fascinating example of arrogance that completely destroys self reflection. I'm hoping the jury is still out and that someone within the industry will pull the various egos in a room, bang their heads together and then some sense ensues. The banks have generated such a phenomenal amount of destruction to market based capitalism it is one of life's great examples in arrogance in ignorance. The biggest challenge to market based capitalism for me is the challenge that banks bonuses paid to employees has proven beyond a doubt the importance of owner based management. In fact Adam Smith asserted that self interest will be guided by the invisible hand to generate public good only if the owner is also the manager. Of course, the leverage of the manager being an agent for the owner is crucial to modern market economies but the abuse of this agency power by bank employees has thrown all the benefits of this leverage to the wind.