New York City securities industry firms paid out a total of $137 billion in employee bonuses from 2002 to 2007, according to figures compiled by the New York State Office of the Comptroller. Let's break that down: Wall Street honchos earned a bonus of $9.8 billion in 2002, $15.8 billion in 2003, $18.6 billion in 2004, $25.7 billion in 2005, $33.9 billion in 2006, and $33.2 billion in 2007.
Those years were the heyday of the hedge fund pirate, the private equity buccaneer, the 9-and 10-figure-salary quant jock, and other financial creatures who created all kinds of complex securities and highly leveraged transactions, many of which are now coming a cropper, from LBOs to CDOs. What a deal. Financiers preached the free-market gospel and pocketed unheard-of sums of money--yet when times got tough, they called for a government bailout. So my question is: Why shouldn't the taxpayer, now that they are bailing out Wall Street, ask for the $137 billion back?
Now, the bigger right now is about limits on future compensation. The financial services industry opposes any limits. Here's the money quote from today's New York Times:
But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.
"We support the bill, but we are opposed to provisions on executive pay," said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. "It is not appropriate for government to be setting the salaries of executives."
That's fine if that's the industry's position. But then it's "not appropriate" for the taxpayer to fund a $700 billion bail out, either.