Bankers' bonuses are indefensible. The colossal fees of hedge fund managers look increasingly hard to justify. But at least private equity remains a beacon of capitalist remuneration virtue, doesn't it? Don't swashbuckling buy-out chiefs snaffle their lucrative rewards after several years, and depending on the performance of the businesses they take private?
I think this bubble of self-serving spin is punctured very nicely by Nassim Nicholas Taleb in the Financial Times today. The "Black Swan" author points out that: "Leveraged buy-out companies used the free option by borrowing heavily from the banks and taking monstrous risks: they get the upside, banks (hence we taxpayers) get the downside. These partnerships made fortunes in the past on deals that society will have to bail out. They too should have their past profits clawed back."