In retrospect, the executive compensation caps inserted by Congress into the stimulus bill back in February are having a perverse effect. Because the caps applied only to financial institutions that took TARP money — and they applied much more heavily to institutions that received “exceptional assistance,” like Citigroup and Bank of America — it tilted the paying field even more heavily against them. This gives them an incentive to take steps that weaken their financial condition, even as conditions in the real economy (to which Bank of America is highly exposed) remain bleak.
My thoughts are, this is the sort of stuff people are unaware of. Who follows the markets anyway? And all that jargon! They're told that stimulus and bail outs are "necessary" to avoid "catastrophe." And that's where it ends. The actual results and effect in the aftermath is rarely, if ever, examined.
It's the unseen consequences of government intervention in the markets.
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