An analysis by the Wall Street Journal today reveals that the pay received by bankers for the horrible year of 2009 -- the year of bailouts and foreclosures and bankruptcies -- will be up 18% to $145 billion. This factoid will be a double thumb in the eye for the gang in Washington now trying to figure out how to re-regulate the greedy little mothers and fathers of our economy.
President Obama didn't parse his words on this one: "I'd urge you to cover the costs of the rescue," he said yesterday, "not by sticking it to your shareholders or your customers or fellow citizens with the bill, but by rolling back bonuses for the top earners."
To which Wall Street will reply with a resounding "Pffffffffffffft."
Now, it's easy to be critical of the Men in Gray, the hairless ones, the guys in the $1200 shoes. But if somebody offered YOU a check for $25,000,000, wouldn't you figure out a way to accept it without regret? People are like that. You give them a little bit of money and they say, "I should be getting more." You give them a whole bale of green, and they say to themselves, quite seriously, "Why should I be the only one not to be receiving fair value for my significant contributions around here? I produced value for... somebody. If I don't take this, Krumholtz will." Because there's always a Krumholtz.
Some kind of regulatory reform is certainly necessary, not only having to do with compensation but with the whole way that the culture operates -- including the way we invest, borrow and save. There are just a few of them, really, dividing that $145 billion. There are a lot of us. We create the need for them. They're happy to oblige, of course, but they couldn't exist without our fatuous and outlandish dreams of wealth and acquisition.
So like I said. It's easy to be all red in the face about the situation. It's easy to give them what for. It's easy to rail at Congress and the Fed and the President and all the bozos past, present and future who don't foresee the bubbles or simply drink too much of them. But what would you do?
I'm asking seriously. What regulations and controls would you now institute that we don't already have? I'm sure there are some. I, for instance, would re-institute the concepts in the Glass-Steagall Act. I'm not sure what they were, even, but their elimination by Bill Clinton seems to have been a bad idea. I would do something about the SEC, too. They're generally after companies who don't punctuate their 10Ks correctly, while Bernie Madoff drops by for a little chat about standards and practices. That's ridiculous.
Beyond that? Would controlling compensation really do anything to protect the public? Or would it just punish the obnoxious super-rich we despise? Yes, it would feel very good to say, "You! Fatso! Gimme back that bonus!" So maybe that's something we should do. Feeling good is important, too.
Then what should we do? Huh?