Reasons to Disbelieve the "Brain Drain" Theory about the Stimulus Package

[Mike 03]

I have to preface my reasons by saying that this IS a problem right now, but only with a fraction of the workforce in the financial industry. It affects largely U.S. workers working overseas for American firms, predominantly in Europe, who are lured away from their posts by offers from competing European banks and financial institutions.

Having said that, this is a global contraction. For better or worse, wages are contracting worldwide. No industrialized nation right now is doing so well that it has not been drawn into this crisis, and the need to contract excessive wages is universal, not something exclusive to the United States.

Secondly, the financial industry is being hit my massive layoffs as well. This is almost certainly something that upper management will use to its advantage (as they do in every other industry) to incentivize workers to accept less money in the form of wages and bonuses in exchange for some kind of job security.

We are talking about excessive salaries here, so we are not asking a banking analyst to exist on subsistence wages of $20,000. It just means a family that used to have a multi-million dollar income will have to make due with half a million. That is not a compromise that many people will walk away from, not in this economy.

This is a synchronous global contraction, and nobody other than perhaps the Saudis can afford right now to pay extravagant salaries, and they don't care anyway.

The phenomenon of German, French or UK financial companies luring away American overseas workers will be very short lived, IMO.

Besides, the truth is these guys are so smart. They are not irreplaceable, especially now that most of what they know has been proven to be fraught with disastrous financial implications.

I would not be at all surprised if financial institutions seek out fresh blood; likely, some economists who have not been trained by the Chicago method as quants but have a fresh perspective on money and how the cautious investment of funds should work.

Naturally, I could be dead wrong. This crisis we face is unprecedented and hazardous, and we are entering new frontiers.

[Taverner]

1. The US is also has the highest pay for CEO's

Hands down

Japan even has laws limiting the total pay of CEO's to no more than 10 x that of the lowest paid employee.

[Deep13]

2. Here are my reasons:

It's an idiotic claim with no basis in fact.

Considering the job these assholes are doing, no one will miss them anyway.

[wellstone dem]

3. I'm not worried. If they run out of the usual suspects

I've got a list brilliant people who would do wonders for them.