Image via WikipediaI must admit that I am completely lost about what is happening here.
Either these financial sector executives and institutions are completely out of touch with reality and the rest of the world - and the freight train that is about to hit them out of this stratosphere - or they have some genius plan that we are not aware of. Follow me:
- First it was the free for all with the CDOs, CDS' etc. which unraveled the entire global financial sector.
- Second, they had to have a zillion dollar bailout, or the earth would crater in on itself. Never mind they got the bailout and people's savings not only did not return, they continue to disappear before their very eyes. I do accept that the sector needed government support. I do not support how that support has been provided. Full nationalization was called for long ago. Moving on.....
- Third, they refused to take the bailout if there were restrictions on salaries and bonuses. Completely illogical. If they were really falling apart and needed the funds, then they should just take whatever they could get, right? I mean if you were having cardiac arrest, are you really turning away all the best heart specialists unless they allow you to have your own way?
- Fourth, they agreed to restrictions, except to the ones they hid which are now causing the outrage.
Earth to the financial sector: the more you push for your way that makes a mess and is completely insensitive, the more the rest of the world will push back.
Don't believe me? The House actually passed legislation to tax bonuses at 90% - with Republican support. 90% tax of anything! Legislation drafted in a week - rare. This is no joke. Now this particular bill may be unconstitutional - and therefore unenforceable - but if the intent is there - you know the saying "where there is a will there is a way". Meaning, if they cannot do anything about these bonuses, you can bet they are going to go as far as they can in future. It was very interesting to note this piece in tomorrow's New York Times (online tonight) "Regulators Worldwide Scrutinize Bankers' Pay". Did you note this gem from the article:
"Not only will regulators insert themselves into the secretive realm of bank compensation practices, Mr. Turner said, they will also demand that banks set aside more capital if their pay packages are too high."
“This has never been done before,” said Mr. Turner, who heads the Financial Services Authority in Britain. “But the days of light-touch regulation are over.”
Nothing unconstitutional about future contracts, and future practices - as far as I am aware. Is this really the direction the financial sector wants? This is more than not making bonuses; this is restricting the ability of the financial institutions themselves to even make more money. I've said a thousand times that the financial sector should really get some enlightened self-interest and stop being so confrontational with the general public, legislators, regulators etc. The financial sector and its participants are going to end up with consequences they will not like - restrictions and oversight that will make banking very difficult. Missing the forest for the trees, people!
And if you think the people's outrage is anything to take lightly, watch Keith Olbermann's Special Comment below. Watch when that outrage of the people is helped by the media. Keith Olbermann is right: Enough! And if the financial sector doesn't do it for themselves, then we the people, the governments (as in all of them around the world), the media and all other mere mortals living here on earth will ensure that it is some kind of "Enough!" - our version of enough.....and the financial sector is quite unlikely to like it.