Why Goldman Sachs’s Bonuses May Be Bad for the Economy

The United States has one of the biggest gaps between rich and poor among the developed nations. Economists and many policymakers in the US have tended to think that isn’t really a problem, as money is a great motivator. If there’s a big prize at the end of the game, then the players will have a greater incentive to win.

Wall Street bankers and CEOs have been justifying their outsized compensation by this logic. They argue that the rest of society benefits because they’re being paid so much more for their immense talent, which improves the productivity of their firm and that will help to grow our economy overall.

This article was originally published in bNet.