Should Wall Street Execs Get Their Bonuses?

Oct 30, 09 Should Wall Street Execs Get Their Bonuses?
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Recently, the Obama administration has changed its tune and decided to limit executive pay for the Wall Street firms and banks that have taken TARP money.  Although many of the banks have already paid back most of the tax payer bailout money, the sheer amount of money they are planning to hand out this year is considered a gross injustice by most observers.  For instance, Goldman Sachs has set aside over $20 billion dollars in bonus money.  Morgan Stanley handed out $5 billion last quarter.  Apparently, Mr. Obama initially tried to play it soft with Wall Street.  However, since they refuse to do the right thing, everybody is demanding action.

The Wall Street culture is not only built on greed, but it is also built on not having any skin in the game.  In essence, they took enormous risks with money that was not theirs.  After they caused the financial meltdown in 2008 and took enormous sums of taxpayer money, the banks had an opportunity to do right by the American taxpayer.  Instead, they chose to hand out more bonuses than in the years before the current recession.

President Obama claims that he has had enough.  Between the Federal Reserve, Congress, and administration officials, Wall Street is feeling the pressure.  Given an opportunity to clean up their own mess, Wall Street chose to thumb their noses at the American people.  Now they will be dragged into reform kicking and screaming.

The Wall Street culture will not change overnight.  More than likely, they will never change.  No matter how much regulation we impose or how much we beg and plead, Wall Street will continue with business as usual until we make them comply.  It seems like the Obama administration is finally growing a spine.  In terms of real value, stopping Wall Street from handing out bonuses does nothing.  However, it sends out a significant message that the American people are not going to take it anymore.

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