Bankers should be ashamed of bonus binge

Kenneth Lewis agreed to forego any of his salary as head of Bank of America. But his employment contract calls for him to get nearly $70 million in retirement pay. When his first check arrives has not been publicized. Lewis was forced to retire because the bank was one of the too-big-to-fails that brought the world’s credit market to the brink.
Only huge amounts of federal bailout money kept it from going over the edge and, analysts feared, throwing the world into another Great Depression.
Bank of America itself received $45 billion in federal help to avoid collapse.
With this as background, be informed that the Wall Street financial firms that survived and are now thriving, plan to pay out billions in bonuses any day now. To add insult to injury, banks, large and small, have descended on Washington to lobby against proposed laws to regulate the finance industry, protect consumers and make a repeat of the past two years less likely.
With six unemployed workers for every job available in the economy and with foreclosures forcing more and more of those who have lost their jobs into homeless shelters, one would think that the supposedly smart folks who run banks and brokerages would have better sense than to act like the recession never happened.
Of course banks and other financial businesses should be regulated. What they do and how they do it — the risks they take with other people’s money — determine the course of the world’s economies. It would be criminally irresponsible for Congress and the governments of the other money centers in the world to allow them to go back to playing their games with no one in mind but themselves.
It is good that some of the big banks are making money again. It is not good that they plan to use those profits to make already rich men and women richer rather than to increase the amount of credit available to the nation’s potential borrowers so that the broader economy can pick up speed and create additional jobs.
What another bonus binge would prove to the country is that Wall Street just can’t get beyond its we’re-the-only-ones-who-matter complex and act with the nation’s long-term welfare as a compass.
Can government regulations give America’s finance industry a conscience — or, to seek a more modest goal, wean it away from its shortterm, greed-fueled system of values? Maybe not. But well-crafted rules and regulations can reward those institutions that meet reasonable criteria and punish those that do not. To settle for that, would be better than throwing up our hands and declaring the nation incompetent to find a way to achieve the greatest good for the greatest number.

— Emerson Lynn, jr.