Obama calls Wall Street bonuses ‘height of irresponsibility’
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Top Democrats, including President Obama, are turning up the heat on Wall Street over bonus payments made to bank and brokerage employees even as the government bails out the financial system.
Obama, reacting today to a New York state report showing that Wall Street firms paid $18.4 billion in bonuses to their New York City employees last year, called the payouts ‘the height of irresponsibility.’
But jawboning hasn’t counted for much on this issue. If the Dems are as outraged as they’re saying, the public may wonder why they aren’t trying to claw back the money, at least from senior Wall Street executives.
Sen. Chris Dodd (D-Conn.) threatened just that today. Dodd said he would be ‘urging -- in fact not urging, demanding -- that the Treasury department figures out some way to get the money back,’ according to Bloomberg News.
To which John Gutfreund, the former chairman of Salomon Bros., scoffed in a Bloomberg TV interview: ‘They are not going to repay all their bonuses.’
In any case, Dodd said he plans to force executives whose companies received government capital infusions to testify before the Senate and explain their bonuses.
Overall bonus payments to Wall Street employees last year were down 44% from 2007, the New York report said. That was the biggest year-to-year drop in more than three decades -- but it still was the sixth-largest payment ever.
The average bonus for 2008: $112,000.
Bonus payments have long been an integral part of the compensation plans of banks and brokerages, and for workers well down the chain of command. But that isn’t going to wash at a time when taxpayer money is keeping many financial companies afloat.
Obama, speaking to reporters at the White House today with Vice President Joe Biden and Treasury Secretary Timothy Geithner at his side, gave a stern rebuke to Wall Street.
Excerpts from his comments:
Part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. The American people understand that we’ve got a big hole that we’ve got to dig ourselves out of -- but they don’t like the idea that people are digging a bigger hole even as they’re being asked to fill it up. And so we’re going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if we are to together get this economy rolling again. There will be time for them to make profits, and there will be time for them to get bonuses -- now is not that time.
-- Tom Petruno