I loved these two paragraph's from Gerald Warner's Telegraph blog. It perfectly sums up the issue of financial sector bonuses.
What we are witnessing here is the murder of capitalism, not by the usual suspects - Marxists and other corporatists - but by supposed practitioners of the free market. There is a difference between capitalism and cronyism. The universal alibi, on both sides of the Atlantic, for ludicrous bonus payments has been: "If we do not reward our best executives, our competitors will poach them." Only if competitors are paying bonuses too, is the obvious rebuttal.
Each institution is justifying its own cronyism by pleading that everybody else is doing it. Very well: stop them all. What will the highly prized employees, with achievements such as losing $27 billion on their CVs, do then? Take the hump and go into school-teaching? Rigorous free marketeers say it is unacceptable for governments to set limits to remuneration in private institutions. In normal circumstances, that is true. But when a government has become a major - or even majority - shareholder, it has every right to impose its views in the boardroom. This gravy train must be derailed.