Nate Silver tells us why the “bonuses” dished out at AIG (ultimately at the tax-payers’ expense) never were proper bonuses. And why a lot of bonuses aren’t, in fact, bonuses.
…I’m just not all that excited about confiscating the “bonuses” paid to the AIGFP employees. Rather, I’m interested in compensation and incentivization structures in general. Aggregate compensation throughout the financial services industry, I would guess, is much higher than is economically optimal (there is a lot of evidence that this is true of CEO pay). A lot of people are getting paid for what is thought to be skill but is really just luck (or economic rent).
As they say: Read the whole thing.
Back after a session at the library where I’ve been trawling through some 20-odd years of the journal of the Danish TUC (known as DsF in ye olde days1 ), I have a problem: I couldn’t find what I was looking for.
The thing is: Between 1904 and 1930, DsF mentioned the state of the unemployment funds and unemployment insurance quite a lot. After 1930, mentioning fell to the degree that unemployment insurance and unemployment funds almost became a non-issue in the publication. The question is why?
One reason could be that with the establishing of a Social Democratic-led government in 1929 and the coming of the Age of Social Democracy, trade unions were less likely to use demands for better financing and higher benefits in public debate. After all, the government was their brethren. Possible, but we still have to remember that the unemployment insurance was basically part of labour-market policies, and those were the domain of the trade unions, not the party.
Another reason could be that as unemployment funds were organised in connection to the existing unions, the issue was decentralised to individual unions. Fine, but in general the 1930s and 1940s were an age of centralisation of labour-market relations. On the other hand, one unemployment fund in particular was the source of concern from the late 1930s onward – the Unskilled Workers’ Unemployment Fund, in case you wondered. But as late as 1952, its finances were discussed as an issue for DsF.
Finally, there is the likelihood that unemployment insurance became a special topic for the 12-, later the 32-man committee and eventually the Confederation of Unemployment Funds which was established in 1947.
Obviously, when you’re looking at one part of labour-market policies, you become a bit myopic: Unemployment insurance is only one of a number of instruments in employment policy (but in terms of expenditure still an important one), so it is easy to see that DsF discussed a lot of employment and unemployment related issues in its journal and on its annual conventions.
- DsF = De samvirkende Fagforbund; today known as LO [↩]