Wall Street's Favorite Meltdown Myth Bites the Dust

[marmar]

from Too Much: A Commentary on Excess and Inequality:



Wall Street's Favorite Meltdown Myth Bites the Dust
But Wall Street's mainstream critics still can't bring themselves to challenge the top executive 'right' to reap enormous riches.

November 30, 2009
By Sam Pizzigati


Great minds have been searching, ever since last fall’s financial sector meltdown, for an antidote to the wildly excessive Wall Street paydays that made that meltdown inevitable. That search, after over a year, still hasn’t generated anything close to meaningful Wall Street pay reform.

And that has to be puzzling many, if not most, average Americans. The problem on Wall Street, after all, doesn’t seem to be all that complicated. Neither does the solution. Wall Streeters did terrible things — they gutted the pensions and savings of millions — because they were rushing to hit massive pay jackpots. To prevent that greedy rushing in the future, we ought to limit those jackpots.

And Congress could do that — by not letting any banker getting bailout dollars make more than the President of the United States. Or by denying government subsidies or tax deductions to firms that pay their top execs over 25 or 50 or 100 times what their workers make. Or by taxing big bonuses at 90 percent.

Various bills that take these approaches have actually been sitting in Congress, all this year. Why aren't these bills going anywhere? America’s big banks, predictably enough, oppose them. But so do many of Wall Street’s mainstream critics. Both these camps have been bending over backwards to steer Congress away from the notion that rewards on Wall Street need serious downsizing.

The banks, by and large, simply deny that these rewards have had any significant impact on how the movers and shakers of high finance behave. In the end, they argue, “the market” will always punish power suits who take reckless risks — and the power-suits know it. .........(more)

The complete piece is at: http://www.toomuchonline.org/articlenew_2009/nov30a.html

[dkf]

1. The important ones already paid the funds back.

Or they went bust. Its a systemic problem, not limited to the firms that got tarp money and the most egregious individuals made their money and can retire anytime they want to.

The problem is letting individuals make scads of money gambling with other people's money. Unscrupulous people will always jump to a firm that allows them to do this as long as it is legal.