Last Friday the season finale aired to Bonus Watch. Here’s the deal. Jamie Dimon gets $17 million for presiding over JP Morgan’s bungee-jump rebound during 2009. Lloyd Blankfein gets $9 million for doing “God’s work” at Goldman Sachs. Personally, I think their show should be named Lost, but the title is taken.
I keep reading the word “restraint” in reference to their bonuses. Blankfein received $68.7 million in 2007, which makes $9 million a rounding error according to the Excel spreadsheets they run at 85 Broad Street in Manhattan. I take issue with the word “restraint” and say the following: “Hey, Lloyd, I ran the numbers on God’s work. Nine million dollars pay one year of wages for 257 priests.”
Ordinarily, I don’t care how much members of the brass make. Success is a beautiful thing, right? And make no mistake. Dimon, Blankfein, and the others have tough jobs. Running a Wall Street institution strikes me as an experience akin to sitting on a colony of mutant hornets with double-barreled stingers. But let’s not confuse Wall Street’s 2009 earnings with brilliant strategic vision. The companies would not be standing without taxpayer-funded rescues.
We’re still getting to the bottom of leverage run amok. But there is no question about one gross miscalculation. Wall Street’s captains, as they considered 2009 compensation, underestimated Main Street’s fury—the white-hot anger over taxpayer-funded bonuses while unemployment hovers around 10 percent. Now, financiers will pay for their insensitivity many times over.
We’re already seeing the potential costs in proposed legislation: $120 billion in levies; an end to private equity investments; an end to prop desks; 50 percent taxes on bonuses; and the beatings go on. The punishments, whatever form they take, will change the business models of our financial institutions forever. I hope for the better. The jury is out.
Isn’t the real issue trust? The government can penalize Wall Street all day long. Hey, it’s what nations do to North Korea. But economic sanctions, however severe, won’t change the way Americans feel. Wall Street’s CEOs seem indifferent to the financial duress many Americans are suffering. Can we ever trust them with our money again?
Before and after Bonus Watch last weekend, I spent time with Bill Binnie who is running in New Hampshire’s Republican primary for the US Senate. Bill understands both financial circles and the need for jobs. I asked him if there is any way for Wall Street to recoup our nation’s trust. He came back with the best idea I’ve heard yet.
Bill suggested that bankers donate their bonuses to rehabilitation centers for wounded members of the armed forces—in New Hampshire and elsewhere. Too many of our soldiers, many of them kids, are coming home minus their limbs, minus their eyes. Many of them suffer traumas that will govern their lives forever. The need for care, regrettably, is outstripping the supply.
I like Bill’s idea. It’s good for our soldiers. And frankly, it’s great for our economic health if bankers rejoin us on planet earth. I hope his idea gains traction in New Hampshire and beyond.
So, Wall Street, instead of unleashing all your spokes-thugs and lobbyists on DC. Instead of pretending your 2009 bonuses show restraint. Instead of ignoring your huge payments to non-CEOs. Why don’t you shut up and cut checks to our wounded vets? And don’t namby-pamby us with lame excuses about taking payment in shares. That’s a croc.