Wednesday, February 4, 2009

Those Poor Bankers

[Economy] An anonymous commenter responded to my post about bankers justifying their big bonus checks only weeks after the industry successfully milked Congress for a huge taxpayer-funded bailout:
What if Larry's firm wasn't bailed out by the government and he made budget? He did his job: Why should he not be compensated as before?

Main Street seems to have a misconception about Wall Street bonuses. Bonuses aren't gifts: they are the major part of the overall compensation package and people work very hard for them. Wall Street traders in general are underpaid on their salaries and the firms use the bonuses as both carrot and stick. When you do well, bonuses are up, and vice versa. That is the contract.
If Anonymous hasn't seen the classic psychodrama Whatever Happened to Baby Jane?, I highly recommend it. In one memorable scene, the paraplegic Blanche Hudson (Joan Crawford) tearfully protests, "You wouldn't be able to do these awful things to me if I weren't still in this chair!"

To which Baby Jane (Bette Davis) Hudsons' wonderfully callous response is: "But cha are, Blanche! Ya are in that chair!"

In this allegory,
Blanche represents the crippled banking industry,
Baby Jane symbolizes the taxpayers,
and Elvira is, oh, let's say, the illegal immigrants.
Whatever. But
nobody can carry off an eye-roll
like Bette Davis can carry off an eye-roll!

Anonymous started out his/her whole post with a big subjunctive "what if." What if Larry's firm hadn't been bailed out? (But it was, Blanche!) What if I, as a taxpayer, weren't faced with paying off a series of multibillion-dollar bailouts for the rest of my life? (But I am, Blanche!)

But, if I weren't, would I still complain about hordes of bank executives cashing bonus checks that dwarf my own annual salary? Well, let me think about it. Even before the bailouts became necessary, I often griped about the widening income gap that separates normal people like us from the few, the proud, the elite superrich.

So let's, for a moment, close our eyes and imagine a world in which the taxpayers hadn't been ... uh, "asked" to step in and bail out a bunch of wealthy fatcats for their hubris, shortsightedness and arrogance in looting the treasury for eight years and crashing the almighty economy. I'm visualizing as we speak. (Om mani padme hum...) The vision is a bit fuzzy, but reception is clearing up by the moment ... better now ... almost there ...

... aaaaand, here it is, crystal clear: that imaginary world where the bailout doesn't exist. And here I am in that world thinking about bloated corporate salaries and bonuses. And, why ... it almost seems ... well, yes! Of course I would complain. After all, they're only a bunch of semiliterate, entitled frat-boy MBAs who regard salaries in the low six figures as "slumming."

Frankly, I was a big fan of democracy while it lasted, so the fact that a small coterie of wealthy elitists were able to take the reins and dispose of the middle class in a few short decades kinda chaps my hide. Yep, sure I'd complain about those bonuses.

But--returning now to reality--there's a whole world of bitterness between that hypothetical kind of complaining and the long and loud, resentful, heartfelt bellyaching of which I find myself capable now that I've been elected to actually foot the bill for those MBAs' bonuses.

Even if, as Anonymous says, the bonuses are really to be considered part of the bankers' and traders' "compensation packages," what of it? If that's the case, then, in effect, I have suddenly assumed responsibility for paying some random corporate suit's cable and gas bills.

It's as if I've suddenly adopted an Ethiopian child, but he's got nicer clothes and a higher standard of living than mine, and he doesn't ever write or send pictures, and I don't even get a hug from Sally Struthers. If we ever were to meet (ah, that subjunctive mood again!), it's doubtful that we'd find anything in common to talk about.

But, if I'm going to have a pet stockbroker, I'd appreciate it if he'd drop by once in awhile--at least to do something useful like scaring mice out of the kitchen or barking at the mail carrier.
Traders are under a lot of pressure to not only do well but to increase production by at least 10% yearly. Perhaps a better model would be to increase the salaries and decrease the bonuses so that there is less drama and more stability on incomes.
Sure, sure, they've got stressful jobs. Don't we all. I'd like to see how my pet trader holds up in a copy editor's slot on a production day prior to publication of a special issue. Then we'll see how he handles "stress." Once he earns my paycheck, he might think twice about appropriating 30 percent of it to fund 15 minutes of his next two-week trip to Tuscany.

To sum it up, Anonymous, many of us working stiffs are willing to believe that these bailouts are necessary. It seems reasonable that, through scrupulous and selective use of this huge infusion of cash, the best minds in the various economic industries could find a way to jumpstart the economy. After all, we want the country, and the world, to get back on good financial footing as soon as possible. That's why we didn't riot in the streets when the Emergency Economic Stimulus Act went through.

But, as long as the bankers and traders and MBAs are in that chair--as long as we're not only suffering from the results of their bad decisions but even cheerfully subsidizing them--they'd best accept our largess with a bit of gratitude, dump that attitude of entitlement and reign in their most conspicuous personal habits for awhile.

(Brandon Burt)


  1. You go boy!!!!!

    How many people lost loved ones due to 911? Or the displaced people working in the travel industry, who had those mortgages too?

    Bailout? hell no! Grab you 4 sale sign fast....

    What did they hear? Sorry you took it so hard..... sign here for your sub prime loan.

    I call it the trickle up effect. Spreads like a cancer don't it? Were all in this together now.

  2. If you ever watch Rick and Steve on Logo, they do this with some of the characters (Evan and Chuck, who is in a wheelchair). The moment I read that line, But cha are! I busted up laughing.


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