The New York Times editorial board heaves a gentle sigh over those naughty Wall Street bankers and says, Gee, we wish they'd do a little better.
Some are forcing their highest-performing executives to accept only stock shares. Others are conditioning payouts to future performance criteria. This is all good for the stability of the banking system — where pay has typically been rigged to encourage high-risk, fast-reward schemes that paid bankers handsomely, regardless of the long-term performance of their investments.
It is unlikely to quell the furies on Capitol Hill, where House Democrats on Thursday proposed imposing a 50 percent windfall tax on bankers’ bonuses. And it is unlikely to satisfy taxpayers. It shouldn’t.
For the sake of fairness, Congress should pass a one-off windfall tax on bonuses. After all, what profits the banks had in 2009 were largely underwritten by taxpayers...
Next door, on the op-ed page, Paul Krugman zeroes in on bankers' apparent inability to grasp the seriousness of their sins, demonstrated at the Financial Crisis Inquiry Commission hearing yesterday.
if you were hoping for a Perry Mason moment — a scene in which the witness blurts out: “Yes! I admit it! I did it! And I’m glad!” — the hearing was disappointing. What you got, instead, was witnesses blurting out: “Yes! I admit it! I’m clueless!”
JP Morgan Chase's CEO shrugged off the banks' assault on the financial system with "shit happens" every five to seven years.
Goldman's CEO was worse, urging us to let the whole d-recession go because it was merely a "rare accident, a freak of nature, and we shouldn’t overreact."
For his part, Krugman seems to throw his hands up and hope for the best.
...The important thing looking forward is to stop listening to financiers about financial reform.
Wall Street executives will tell you that the financial-reform bill the House passed last month would cripple the economy with overregulation (it’s actually quite mild). They’ll insist that the tax on bank debt just proposed by the Obama administration is a crude concession to foolish populism. They’ll warn that action to tax or otherwise rein in financial-industry compensation is destructive and unjustified.But what do they know? The answer, as far as I can tell, is: not much.
We fall back on re-regulation. The last thing we should expect is that the villains will be taken off the Street. American bankers' callousness and financial rapacity are here to stay. If the people at the helm of our financial system have no plans to get smarter and if Congress isn't going to get tougher, we'd better get smarter and tougher -- starting yesterday. Oh, and we might want to listen to a number of economists who are urging individuals and families to move their accounts into more transparent, stable regional banks.
