I’ve posted Entry #343 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called An Emotion-Driven Walk Down Wall Street — A Thought Experiment.
Juicy Excerpt: Each new pay cut would cause the employees who had not yet joined the pay cut bandwagon to become more anxious re what their fate would be if they jumped on the latest trend too late. Just as excessive pay increases had at one time begot ever more excessive pay increases, now excessive pay cuts would beget ever more excessive pay cuts. If things got sufficiently out of hand, a situation might even develop in which employees voluntarily elected to pay themselves less than their bosses would have elected to pay them under the old system for setting the amount of pay increases; most employees would prefer to be paid less than to lose a job.