| Hilarious, and infuriating article: "The Wail of the 1 percent."
It's hard to feel any sympathy for these people. I mean...they got us into this mess chasing their paychecks. An excerpt:
Their anger takes many forms: There is rage at Obama for pushing to raise taxes ('The government wants me to be a slave!' says one hedge-fund analyst); rage at the masses who don't understand that Wall Street's high salaries fund New York's budget ('We're fucked,' says a former Lehman equities analyst, referring to the city); rage at the people who don't 'get' that Wall Street enables much of the rest of the economy to function ('JPMorgan and all these guys should go on strike-see what happens to the country without Wall Street,' says another hedge-funder)."
Hm. What happens if they go on strike -- and no one notices? Or better yet, we use their "strike" as an excuse to reform the financial industry?
But seriously, none of these *sshats would actually go on strike. They know someone would gladly step in and do the same thing they do for a tenth of their pay. And probably do just as well.
Ezra Klein:
The public views bankers much like the law views the robber. The money they made was illegitimate. The business was fraudulent. They took hefty cuts on hyped transactions that moved fake money. They inflated the bubble and saw their fees rise commensurately. They made things worse, in other words, and by making things worse, they made themselves richer. The robber, at least, does not leverage your jewelry before pocketing it. The banker's money was not fairly acquired and thus restitution is owed.
The bankers would protest that collapse was not, in fact, their intention. The proof is in the equity: They were paid -- at least in part -- with share in their own stock. That stock is now worthless. They may have been stupid but they were not malign. They may have been incompetent but they were not thieves. Their behavior might have been different if their contracts had included clawback provisions. But customers wanted the rewards of risk and so paid bankers to take it. Everyone got what they wanted until everyone got what they feared. But the banker holds no special moral culpability for the reversal of fortune.
What Klein leaves out is that the bankers gamed the system, removed the safeguards from the finance, then relentlessly followed a path of risky investments that benefited only a small portion of society, all the while banking on the fact that all of society would take on their losses. Which we did. And still do.
So there is "moral culpability." Bankers are simply mistaking the culture of high financiers for society writ large. It's not okay to be greedy at the risk of someone else's expense in the real world. Sure, the hedge fund managers' customers are also culpable. Let them take losses, too.
And then there's this news:
Top officials at Chrysler Financial turned away a government loan because executives didn't want to abide by new federal limits on pay, according to new findings by a federal watchdog agency.
Instead, the car company "opted to use more expensive financing from private banks, adding to the burden on the already fragile automaker and its financing company." Chrysler execs are no doubt banking on the hope that, if the private financing fails, they can still turn to the government as a last resort. In the meantime, they can enjoy their overinflated executive pay.
In any case, all this reminds me of an interview with former IMF economic advisor Simon Johnson, who advocates getting rid of the country's "financial oligarchy."
Fine by me. |
