David Ignatius: Financial Incentives

Posted by admin on Sunday, September 26, 2021

David Ignatius Money Quote saying If bankers compensation was more closely tied to long-term performance, it would be like hedge fund managers pay. David Ignatius said:
 

 

“If you want better behavior from bankers, then make their financial incentives more like those in the hedge-fund world – where managers have ‘skin in the game,’ and their net worth is tied to their long-term performance” — David Ignatius

 

 

In this quote, David Ignatius seems to be proposing that changing bankers’ compensation structures could help reduce risky or unethical behavior that damages the financial system and economy. Specifically:

• Ignatius notes that hedge fund managers have “skin in the game” since a significant part of their own net worth is directly tied to the long-term success or failure of the funds they oversee.
• In contrast, he implies that for many bankers, their personal financial fortunes are not as closely linked to the long-term health and sustainability of the banks they lead.
• Ignatius appears to believe that designing banker pay to more closely mirror the “hedge-fund world” model, where executives have more on the line based on long-term performance, could incentivize conduct that considers broader impacts and is less focused on short-term gains.

The best interpretation is that Ignatius is arguing bankers would likely make wiser decisions and take fewer risks if compensation involved more deferred payouts contingent on sustained positive outcomes, since it would give them literal “skin in the game” and make their fortunes directly reliant on responsible stewardship of the financial institutions they oversee according to his perspective on reforming incentives to discourage conduct that endangers systemic stability.

Bernie Sanders: Billionaire Hedge Funders

Posted by admin on Monday, December 21, 2015

 

Bernie Sanders Money Quotation saying Tax havens for corporations and taxes for billionaire hedge fund managers aren’t fair to working Americans. Bernie Sanders said:

 

 

“Major corporations that earn billions in profits stash their money in tax havens and pay nothing in federal income taxes, while billionaire hedge fund managers pay a lower effective tax rate than nurses or teachers” — Bernie Sanders

 

 

According to the quote, major corporations can save a significant amount of money by stashing their profits in tax havens. However, the exact amount saved is not specified. It’s important to note that tax havens can be controversial and some argue that they are not fair to working Americans.

The fairest way to tax billionaires and corporations is a topic of ongoing debate and discussion among economists, policymakers, and the general public. However, it’s important to note that taxation should be fair, progressive, and based on ability to pay.

Some argue that increasing taxes on the wealthy and corporations can help reduce income inequality and generate revenue for social programs that benefit everyone. Others argue that higher taxes can stifle economic growth and innovation.

There are various taxation models and policies that aim to ensure everyone pays their fair share, such as progressive taxation, wealth taxes, and corporate tax reforms. Ultimately, the best approach will depend on the specific context and priorities of each society.