One of the things that I've
been doing is talking to a lot
of business people who are not
in finance about that and
saying Do you realize your
bankers are taking a quarter of
all the private sector profit.
And their reaction? Two
reactions: if they are private
and or sort of small
businesses/makers they tend to
be stunned,
outraged.
You know, say yeah that's why
we've always self-finance we
never want to do...
But interestingly,
corporations that are public
tend to be part of that whole
process because if you think
about it CEOs get
anywhere from 30 to 80 percent
of their pay in stock options.
So they play the market game,
they play that let's push up
our share price and these kind
of fake ways quarter by quarter
let's buy a bunch of our shares
back and you know and do they
sort of you know financial
engineering things to raise the
share price because,
guess what, my bonus is going
to be bigger. We have a system
of incentives that is pushing
everybody in exactly the wrong
direction. So in the States
and, you know, I think that in
the UK as well we have a
conversation now about should
stock options be how people get
most of their pay?
Buybacks, they were illegal
before 1982,
they were market manipulation.
Charlie Munger says show me the
incentives and I'll show you
the outcome. Indeed.
So we shouldn't be shocked.
No we shouldn't be shocked.
Finance is a complex system.
And so there's no one silver
bullet. So you have to look at
all these different areas you
have to look at the tax code.
You have to look at housing
policy. You have to look at
the way financial regulation is
structured but these things can
be boiled down.
And I would boil it down and
say we should as the financial
sector what are you doing...
for all the numbers you can
generate generate the number
that shows what you're doing
for Main Street,
what you're doing to make
people wealthier and keep
doing that and then everything
else you're doing.
Let's make it go away.
