Bill Clinton's well-meaning 1993 campaign to tie executive pay to performance may have attracted risk-loving CEOs. Photo: World Economic Forum (flickr)

To poor countries, 2008's economic crisis must have seemed like a disease seeping from the wealthy global north. Two American thinkers have traced it to an unlikely source.

One early germ of the financial meltdown, which World Bank data show led to an unprecedented drop in foreign direct investment in the developing world and some of its slowest economic growth in a generation, may have come from a 1993 crusade against overpaid American executives, argues Daily columnist Reihan Salam.

Building on an argument by Nassim Taleb in the New York Times, Salam recalls a law championed by Bill Clinton as a way to slow rocketing executive compensation. The policy, Section 162(m), essentially capped executive salaries at publicly traded companies at $1 million annually by refusing to recognize larger salaries as a deductible business expense.

But there was an exception. Executive pay could be higher than $1 million if it were tied to performance.

Clinton's goal, reported in the New York Times in 1993, was to stop Wall Street executives from taking home "hefty amounts even when times are bad." But the effect, as shown on p. 65 of this report, was that executive compensation kept shooting up—it simply shifted from salaries to bonuses based on short-term corporate goals. This new compensation trend, in turn, helped drive out 1980s-style bankers who were "bland and predictable," as Taleb puts it, in favor of bankers who tended to be risk-loving gamblers.

Salam doesn't claim that Clinton's initiative was anything close to the only origin of the 2008 crisis. But he calls it a "cautionary example" of what can happen when you "layer new bad regulations on top of old bad regulations and call it progress."

Risk-loving gamblers, it turns out, may not be the best people to run massive corporations that can tank the global economy if they go down.

Chart by Carola Frydman and Raven E. Saks, from Historical Trends in Executive Compensation 1936-2005.

Sugar is a popular commodity in India, where imports are expected to rise as droughts cause sugar prices to rise by 50 percent. Here vendors make sugar cane juice. Photo: Jim-C (flickr)

Sugar rushes tend to be followed by sugar crashes.

The western Indian state of Maharashtra has been called the "sugar bowl" of India, but that may be changing. A New York Times video sheds some light on the problems farmers in Maharashtra face as sugar production decreases, causing prices to rise.

India is the world's second-largest sugar producing country. But factors like insufficient rainfall, small plots of land and government regulation of the market are impacting sugar production in India and therefore driving up the price, making imported sugar a more affordable option in India.