Economist Nouriel Roubini made this simple and crucial point in an interview with Reuters.

[Mike 03]

We can never continue to trust banks, brokerage firms or investment managements so long as their employees have no incentive to make money for clients. Their incentive has always been the bonus, which has nothing to do with how much money they make for clients.

Your stock broker can ruin your account and reduce it by sixty percent and still make three or four million a year.

What does he care if he preserves your capital or not? He doesn't. There's no reason he should.

Roubini's argument for nationalization is simply that people who just have a plain old salary and some pride are motivated to be successful by motivators that directly impact their job security and self respect.

He makes great points, IMO.

ON EDIT:

I want to find the link if possible, because although it is more than seven minutes long, it is worth watching.

EDIT: Link added

http://www.reuters.com/news/video?videoId=99068&newsChannel=businessNews

[PM Martin]

1. The culture of Reagan/Thatcher/Mulroney

has infiltrated the entire world economy. This bubble explosion is the result.
Execs/Brokers/Traders getting bonus's regardless of their performance is all part of the right wing everyone should feel good about themselves mentality.

[seemslikeadream]

2. is this it?

http://www.rgemonitor.com/roubini-monitor/255701/nationalizing_the_banks_latest_roubini_interviews_on_george_stephanopoulos_and_on_reuters

[FKA MNChimpH8R]

3. Now THAT is a razor sharp explanation

for most of what is wrong with the economy these days. The wealthiest have gamed and rigged the entire system to ensure that they are ridiculously over-rewarded, whether they succeed or completely fuck up. And there's no disincentive to being a fuckup. You will be paid the big bux no matter what.

[Ghost Dog]

5. That Roubini better be careful

around aircraft. Just sayin'.



x(

[Coyote_Bandit]

4. Brokers are paid a commission

Investment managers are typically paid a fee based on the value of the account.

[chill_wind]

6. K & R.