The Fourteenth Banker Blog

April 13, 2010

De Tocqueville on Incentive Plans

Filed under: Running Commentary — thefourteenthbanker @ 2:40 AM

“… every man feels endlessly goaded on by his fear of sinking or by his passion to rise in (that) society. Just as money has become the principal sign of social class and the means of distinguishing men’s position…. Almost no single individual if free from the desperate and sustained effort to keep what he has got or to acquire it. The desire to grow rich at all costs, the taste for business, the passion for gain, the pursuit of comfort and material enjoyment are thus the most common preoccupations in despotisms. Those preoccupations spread with ease throughout all classes of society; they even affect those very classes which had been most free of them up to that point; shortly they would weaken and debase the entire nation, if nothing emerged to check them.”

Obviously these words were not actually written on the topic of incentive plans, but the apply in several respects. One, the element of entrapment and fear. Two, the incentive as the measure of a man or woman’s worth to the organization. Three, the becoming desperate. Four, the preoccupation. Five, the lack of real control implied in his usage of the term despotism. Six, the weakening and debasing of the entire nation.

Carrots and Sticks are not free.



  1. All these smart people, like this banker, know it’s a con game. my question, why don’t these people actively work to charter new banks at their states and universities? why are they not banding together to pressure for the shut down of the Federal Reserve, and let us get back to issueing our own debt-free money? it’s been done 6 times in American history.

    check out The Secret of Oz, by Bill Still…..the history of money and how we can change the game.

    or, does the US now lack any will for self determination? thanks to our miserable processed food and pharma drugs? maybe the rage hasn’t built up enough yet to require change. one thing for sure, the banksters (Rothschild, Warburg, Rockefeller, et al) have NO scruples. they mean to destroy us.

    Comment by marie henkels — April 13, 2010 @ 9:37 PM | Reply

  2. From Democracy in America?

    Comment by Kyle — April 13, 2010 @ 9:40 PM | Reply

  3. Just wanted to say thanks for starting this interesting and timely blog.

    Comment by Judy — April 13, 2010 @ 11:49 PM | Reply

  4. please get your own domain .. all blogs are blocked in china .. thanks

    Comment by gregorylent — April 14, 2010 @ 12:01 AM | Reply

  5. So, maybe you can give us an honest answer as an “insider.” Do the heads of these banks and big investment houses not worry that at some point, the public will pick up the pitchforks and take matters into their own hands? I am in no way advocating violence, but surely there is some worry about this occurring. Do they not look at Kyrgyzstan and see cause for concern? While I am a firm believer in both the gullibility and the laziness of the typical American; there has to be a point where even the most ardent watcher of reality television will realize they are being systematically driven to feudalism by Wall St banks, and take some kind of action to protect their families. Am I missing something here? Is this not a concern for your peer group? Have they not thought this through? Better yet, do they not read history? I just don’t get it. It is like they just do not even care what the perception is anymore. Is that arrogance or stupidity? Fill us in.

    Comment by TC's Island Chopper — April 14, 2010 @ 12:40 AM | Reply

  6. What is so sickening about you people is you’ve sold out to money instead of people and lives to be lived? You’ve made Capitalism into such a monster that now anything else would be better than this, because Capitalism is NO FRIEND OF DEMOCRACY. You’ve turned everything into money or nothing at all. You people are no different than the Heads of France when they rolled off from the guillotine. You all have made this country into a Third World nation. You have exported the jobs and businesses all for more money. Don’t any of you remember that you don’t get to take it with you when you die. In short, you all sold out the country and now we all are idiots to believe that there is anything left here in this place called the USA. Frankly, it would be best for all of us if the country did implode because then real honest people would come forward and start anew. It would be best if the too big to fail banks did fail. Failure is honesty at it sharpest point, and many do learn from failure. The fact remains that the whole money industry is rigged just like gambling and by this point in the course of human existence, we as people should be so far away from a money and profit system to run the world is by far the greatest sin unto mankind that anyone has ever seen. Money by now should have be gone from this world and equality for all should be at the very top of the paradigm, but instead the industry ruined Democracy and has rigged the Capitalist system so that there is no equality and no value of human lives. I do hope that there is a revolution, not like what the extreme right wants but one that is far more violent and monstrous. This would be equal pay back to the money system that sold out this country, the world and human life. There is nothing left here in this country. It is gone and you bankers are major players in this total folly.

    Comment by Tucci — April 14, 2010 @ 1:14 AM | Reply

    • Yes Madam, we are, we are banksters and robbers and the sad part is that we can’t even come out and say it unless Rahm Emmanual wants to offer us protection, but of wait we didn’t contribute to his PAC Magnetar did.

      The real robbers are in Washington and The Congress and the White House. President calling for “tough” financial reform. You know who really sold us out- Obama and come to think of it- I used to be a fan, the guy had me fooled!

      Comment by Vocalbanker — April 15, 2010 @ 2:13 AM | Reply

  7. I’ve read your story recently at Hufpo. I’m not at all convinced that you are in fact currently a banker, managing at a financial institution which received TARP funds. I’m not saying this to be mean spirited and acknowledge I might be wrong. I’m not convinced because if any of the top leadership wished to learn your identity they would already have it. Also, people in the highest echelons of banking don’t get there by questioning the morality of their actions. There is no reflection. Everything is black and white. Even when everything explodes around them it’s someone else’s fault, they were the good guys all along and we should all be grateful for all they’ve done. You’re as angry as anyone else. You’re writing the words you’d wished they would say and thinking the thoughts you’d wished they would think. The final tip off is the frequent Libertarian, free-market quotes.

    Comment by Jason — April 14, 2010 @ 1:59 AM | Reply

  8. Nothing of real value can be accomplished under the guise of anonymity. If you’re serious about wanting to talk up, really talk up, then you’ve got to come forward in front of the media and stop hiding. Otherwise, you’re just playing both sides and nothing will change.

    Comment by Anne Tedder — April 14, 2010 @ 2:11 AM | Reply

  9. ‘Carrots’ and sticks are the same, only the “carrot” is painted orange and the stick is naked, if I were to imply that nakedness is truth-then smack me with the stick- the ‘carrot’ is a distraction tool before you get smacked again anyway.

    I guess my question is why a cabal of mega Banksters need to go on with this vendetta against the populous. Im sorry but If I were to look at this from a salty perspective- We the People were subjected to a ‘Drive By Robbery’ the likes of which this world has never seen

    How can we escape from this despotic cancer if it has institutional backing. Your friends in high places cannot wait to get into government to help craft rules in favor of the Wall Street Elite-in the same way the Politician’s are moaning in anticipation to become your lobbying yes men. Both Camps want money and favors while I and my child shall pay for their backdoor and mile-high greed,grist,and graft.

    And I guess I do not see an end, but a course to an end. the way a doctor would illustrate the way a virus works. You cannot kill it-once the RNA hacks in to your DNA its done-there is no going back. You the patient have to wait until your immune system rises to the challenge and neutralizes it. Or if it is too strong let it take you to the great beyond or sit in your house till it falls over.

    The banking problem is power problem. It is inherent in how we view governments and mechanisms thus. Democracy, from Demos ‘the people’, and Kratia ‘Power’. See people get hung up on words like drink they don’t stop to analyze till its gone.

    Kratia or power gives the word its motive and make up.If power were in the hands of the citizen we would have taken care of these clowns a long time ago.Power is no longer in the Senate- Look how long it takes to sign a simple bill.In both chambers- the Kratia is not there.The Military has not the Kratia, even they knew when they were licked-Military Industrial-Congressional Complex-need I say more. The power or Kratia would and then still lie in the Fianciers hands. In the very families who tried to Override the first Roosevelt and the Second.

    If we are not a Junta,Democracy,or Republic, or Theocracy-yet. then the only thing left is Corpratocracy-Plutocracy. Because the Plutocrats and the WS Bankers are one and the same.

    So if you propose a way to turn down Despotism in the way De Tocqueville surmised how can you when there is no way left but down.Those who hold the votes hold paper;those who hold the tap on the currency own the world.

    Comment by Sarah Renee — April 14, 2010 @ 2:14 AM | Reply

  10. You do know “reform” is gonna happen no matter what, already, right? When 192 countries back it, you know it’s done, right? UN Agenda 21 anyone? You are a high-level banker, right?

    Comment by Doh? — April 14, 2010 @ 10:27 AM | Reply

  11. Can you comment on the “Counterparty Risk Management Policy Group” work? How about Gerry Corrigan (he actually was a Senior Fed Official who went to work for Goldman Sachs)? I wasn’t aware of the report until tonight when I was trolling for information on financial oversight.

    What would you say to someone who looks at the financial instruments and compares them to Smith & Wesson… useful instruments… don’t give them to kids. Is the current crises because so many people thought they know how to shoot a gun? You have to believe that Paulson and Bernanke did really know what was going on, behind the whole “economy is strong” talk.

    Regular people looked at the financial instruments and thought they were money on trees… and they were… until the problems came and the whole risk management got thrown out the window. You can’t force people to take on financial risk… yet that’s sadly where we are now. It’s a game of musical chairs with greater fools… music stopped… bye-bye Bear Stearns… music stopped… bye-bye Lehman… music stopped… bye-bye Fannie/Freddie(You just took out a bunch of banks too, but thats okay because we’ll dump it onto the Federal Reserve balance sheet)… music stopped… bye-bye Iceland… music stopped… bye-bye Greece… seems like we got a lot more chairs and still a lot more players to go…

    Like outrunning the bear; you just have to be better than the guy beside you…

    Comment by OhReginaldIDisagree — April 14, 2010 @ 1:00 PM | Reply

  12. Obviously, our capacity for autonomous corrective action to prevent the weakening and debasing of the entire nation rests on the notion that somehow we are ruled (financially) by the best (Wall Street), not only intellectually, but also on the basis of virtue. Unfortunately, and as this financial crisis clearly proved, that illusion has failed miserably. If we look at the market and the concept that the independent actions of some of the most powerful firms in Wall Street — in relation to the functioning of the market as a whole — “can not” influence market outcomes ; we will find that in reality the notion of a “competitively functioning market” doesn’t really exist. What we have in reality is only the perpetuation of existing monopolies or oligopolies and nothing more.. I don’t think I’d be exaggerating if I said we are slowly degenerating into oligarchy.

    Comment by Ron — April 14, 2010 @ 1:31 PM | Reply

  13. Just to give you some encouragement from the wings, what you are doing is very courageous and I applaud you. True convictions are expensive, otherwise they are mere conveniences. Your convictions make you who you are and will determine who you are when history is written. Pursuing a good name instead of a fat wallet is a noble cause. One day I hope to know who to thank.

    Comment by Tim Holmes — April 14, 2010 @ 6:44 PM | Reply

  14. I found your blog by way of a link on Calculated Risk to your HP Q&A, and I look forward to following it. While I never worked for a TBTF, I am a former bank examiner-turned-small banker. I left two executive level credit/risk management positions (both at large community banks TA <$3B) in the last decade primarily because of what I described as 'not being on board with the strategic plan'. The level of risks were not worth the returns…not even close. But because the market can't figure out risk adjusted returns, it rewarded the highest growth, most 'innovative' financial companies in the way of high stock prices and cheap access to capital. Those (public) companies that did not want to participate in competing with the ridiculousness of products available from WAMU, Countrywide, and the non-bank investment banks were assured of being sold or taken over. Why was anyone surprised that we paid bankers only for production, not the level of risk associated with such production, and got what we paid for ? And how convenient for politicians to forget the complete lack of support for any regulatory agencies taking action that would slow availability of credit anytime after 2002. So thanks for blogging.

    Comment by Formerbanker — April 15, 2010 @ 12:41 AM | Reply

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