I am going to tell you a dirty little secret: I know why many of you are so angry about the financial crisis. Yes, losing a job or seeing one's investment portfolio depleted are certainly ugly outcomes. Having to endure endless hours of depressing TV coverage of the malaise is probably not your cup of tea either. But I think I know what truly gets to you like nothing else, what maddens you beyond relief: the shocking discovery of the insane amounts of money that Wall Streeters make. It's not just that the crisis may have made you poorer, but rather that after finding out how much those financial people earn you fear that you will unremediably feel poor for the rest of your life, no matter how well you do going forward.
After all, who can continue happily strolling around through life once it is so publicly known that there are tons of 30-year old traders raking in millions of dollars out there? Suddenly, your house may start to look too modest, your car too unglamorous, and your bank account too meager. Damn the crisis! We were living so placidly before that, why did we have to learn about those guys making fifty times more than us, hitherto content, mere mortals?
Possibly never before have the headlines been so often dominated by the size of Wall Street bonuses. It's in the air we breath now. By inevitably bringing to the fore the inner workings of investment bankers and hedge funds, the meltdown has condemned us to having to hear, time and time again, how many billions banks had paid (and continue to pay) its employees. Some of us already knew about the treasures being distributed throughout financeland, but for many others this has been a painful encounter with an unsuspected truth.
The psychological consequences for the latter may have been profound. How many erstwhile detached and proudly non-materialistic BAs in English Lit may have gone through horrific sleepless nights, ceaselessly regretting not having majored in business upon learning that 27-year-olds at Goldman Sachs outearn them 100-to-1? American shrinks may be swamped these days with patients trying to find something to blame for their not having become bankers (perhaps along the lines of "my parents made me read Thoreau in high-school, they deprived me of a life of eight-figure bonuses!").
Think the endless display of massive bonuses is depressing? Try being me. I was a trading floor fella some years ago, and left in search of adventure. I got adventure all right (I worked for an Alabama-based internet start-up; loads of fun, traveled all around the world, plus I got to drive through the South while listening to country music) but not a single day went (goes) by that I don't torture myself with what ifs. I am definitely less wealthy than I could have been. I have my compensations (I live by the ocean and do pretty much what I fancy; today I spent all day on the beach, under a glorious sun, and in such environment money somehow matters less), but I am human after all: every time the papers talk about employee X at bank Y making Z millions I wonder if I could have been Mr X.
But however insufferable it may be to have the salaries of Wall Streeters daily shoved down our throats, I think it important to keep in mind that bonuses (and pay-per-performance in general) are not a bad thing per se. Some bankers may have earned far too much for doing stuff that eventually harmed everyone, but many others most likely are just being compensated for valuable non-destructive work. Those who perform well in business should be rewarded, otherwise we may end up depriving the system of eager, motivated, can-do, productive individuals; the kind of people who typically help an economy grow, enabling many others to have well-paid jobs.
That is, we should not allow this bonus-driven crisis to spell the death of bonuses. I myself have worked mostly in jobs that paid me only if I managed to perform. I like it that way. If History teaches us something is that societies that don't reward excellence and effort fail dramatically (even if sparing the majority of the populace from seeing how a few thousands outearn them drastically), while those that regale performers shine (even if forcing many folks to realize that they are hopelessly less affluent). So let's continue, carefully and responsibly, handing out bonuses. With a small caveat perhaps: never again bombard us with the info. The $10 million compensation of a Goldmanite creates despair only if the world knows about it.