« Gates Case: It's Racism, No Doubt, But Cops, In General, Treat People Like Crap | Home | Racists Come Out Of The Woodwork »
Outrageous Wall Street Bonuses: Because They Can
The Washington Post has a front page story telling readers that the good old days are back on Wall Street, with bonuses projected to be larger than ever. Why would the Wall Street boys pay themselves huge bonuses so soon after getting bailed out by the taxpayers, at a time when tens of millions of people are unemployed or underemployed?
The answer is the same as the reason that dogs are known to lick a certain part of their anatomy: because they can. With one hand in the taxpayers' pockets and one foot firmly braking any congressional action to rein them in, we can expect to see many more big paydays on Wall Street.
Advertisement
Even worse, Goldman Sachs bonds are apparently priced to show that investors believe that if Goldman gets into trouble it'll get bailed out again.
One way to take the wind out of Wall Street's sales would be to pass a "never bail them out again" law. Really make it clear that these guys are on their own. Investors, especially bond investors, would scramble away.
July 23, 2009 9:10 AM | Reply | Permalink
Rec, but I'd edit out the reference to dog behavior, as there is no scientific connection to human behavior.
July 23, 2009 9:39 AM | Reply | Permalink
Two words for dealing with this: Windfall Tax.
Almost to a person, bankers would be out of work if not for an act of Beltway last year. People who get lucky like this need to hand some of their winnings back.
Would mention that one of the reasons for these giant individual bonuses is that whilst the Wall St profit pie is quite a lot smaller than before, there are many fewer people able to claim a slice. It's the fact the government shows no inclination to claim anything more than a token slice for the taxpayer that is pretty unconscionable.
July 23, 2009 11:18 AM | Reply | Permalink
The solution is to return progessivity to individual taxes and eliminate those aspects of the corporate tax code which shield the major chuncks of the financial sector's profits.
If Wall Street were flowing 60% of those profits back to the IRS we could applaud its enterprise in helping reduce the deficit. And ,ditto, if the Lords and Ladies of the Universe were paying 90% on their income over $500K.
AOBTW both the Street and its denizens would then have significantly less incentive to package subprime mortages for sale to widows and orphans.
It's one thing to resist the temptation to screw up the econony in order to earn a bonus that gives you ,say, $750K after tax. It's quite a different challenge to resist when that after tax carrot is $6 million.
July 23, 2009 4:14 PM | Reply | Permalink
I spend a lot of time reading about the Borgias during the Renaissance.
These Wall Street fellows could have taught them a few tricks.
July 23, 2009 5:56 PM | Reply | Permalink