Sometimes, I wonder whether we all live in a grand farce. But, actually, it's a real-life story about a robbery of the people that continues every day -- and today is no different. The robbers grow richer.
From the Wall Street Journal, a story headlined: "On Street, Pay Vaults to Record Altitude":
When it comes to paychecks, Wall Street's law of gravity is back in full force: What goes down must come back up.
In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion, according to an analysis by The Wall Street Journal. The total is up 5.7% from $128 billion in combined compensation and benefits by the same companies in 2009.
The increase was fueled by a revenue rebound as the financial crisis recedes in the rearview mirror...
"Things are shifting back to where they were before," said J. Robert Brown, a law professor at the University of Denver who studies compensation and corporate-governance issues.[emphasis added]
Bank of America Chief Executive Brian Moynihan got a 67% bump in his total compensation for 2010, the company said Monday. Goldman Sachs Group Inc. tripled the salary of Chairman and CEO Lloyd C. Blankfein and increased his stock-based bonus 40% to $12.6 million.
In some respects, this is reaffirming news -- reaffirming in that, for those of us who have argued that nothing much has changed, this is concrete evidence.
Let me make three points here.
First, the notion that the "financial crisis" has receded is a perspective that millions of Americans do not share, and do not live. Those people are still coping with joblessness and homelessness and bankruptcy precisely because of the crisis caused by many of the people who are now being rewarded. Rather than jailing a lot of these folks, or at least firing them, the financial "community" rewards them.
Second, the escalating pay serves notice that we are back to business as usual. The next bubble is just over the horizon.
Third, and maybe most important, any "reforms," particularly those in the Dodd-Frank bill, are honestly toothless for this reason: we have not truly made an effort to SHRINK the size of Wall Street and its influence on our economy. Remember, in the "good days" of Wall Street, when the Street said "cut your labor costs", CEOs, always attentive to the level of their share price (which effected the stock options CEOs held), would go ahead and slash thousands of jobs -- not because it necessarily helped the company's overall performance but because the stock price might improve because well, Wall Street would be happy.
Much of the financial sector's money was tied up in leveraged buy-outs and corporate takeovers -- this is precisely the kind of behavior, along with foolish so-called "free trade" deals and union busting, that has undercut the middle-class and set us on a course of a declining standard of living. None of that mindset has changed as we embark on that mission to "win the future."
That is the more dangerous message from the pay hikes:
NOTHING HAS CHANGED.
Seems to me that the next Tahrir Square should be around the Wall Street bull on lower Broadway in Manhattan.