The Obama administration famously put restructions on executive pay, capping at US$500k for institutions receiving TARP money. Naturally, there has been some shameless howling from the Masters of the Universe. Who? You know, the geniuses who were instrumental in birthing this finance mess.

There has been some wagging of tongues and tut tutting in regard to the problems of living on $500k per year on the upper East Side of Manhattan. Mathematically, this may in fact be true.  But I would offer that this is the market supplying pushback towards equilibrium. If the swanky life in Manhattan is not feasible on the meager sum of $500k, then the banks need to relocate. Banks should consider the kind of lifestyle an executive could have in Manhattan, Kansas, or Little Rock on $500k. Or York, NE. We got yer swank right here!

I love this description of financiers by David Gillen at the NYT-

Banking executives and recruiters say talented financiers — the driven, hyper-numerate, slightly ruthless ones with a preternatural knack for making money in bull markets and bear — are always in high demand. NY Times, Feb 21, 2009.

It sounds to me like the finance industry needs a therapeutic brain drain or a cerebral colonic.

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