We are not the first to register our disgust at Wall Street's decision to hand out $18.4 billion in employee bonuses in 2008, a year in which the financial industry's irresponsible decisions and crippling corporate losses helped precipitate a devastating economic downturn. On Thursday, President Obama called the bonuses "shameful" and "the height of irresponsibility."
Nor are we alone in noting that this boneheaded, tone-deaf move came just after the nation's top investment banks and financial services companies asked for -- and received -- hundreds of millions of taxpayer dollars to protect them from the consequences of their own actions. The money was granted (with the support of this page) because we all were assured that these firms were too big and important to fail.
That's what's so galling about this. The bailout money was meant to keep the companies afloat -- not to line the pockets of employees who are already very well compensated.
Industry defenders insist that we're missing the point. If they don't pay bonuses, they say, they'll lose their best employees. (To what, we wonder?) Besides, they add, bonuses were down substantially -- 37% on average -- from 2007.
To which we respond: Oh, please. These bonuses averaged $112,000 -- and some were in the millions -- in a country where median family income hovers around $50,000. Yes, they've been cut back, but this was still the fifth most generous year ever. And they appeared against a troubling backdrop. Just this week, outgoing Merrill Lynch CEO John Thain agreed to reimburse the company for a $1.2-million office renovation, including an $87,000 area rug. And Citigroup, a bailout beneficiary, was shamed into abandoning plans to buy a $50-million corporate jet.
All this reflects a fundamental misunderstanding on the part of America's financial class about how it's going to have to behave in the difficult times ahead. The president spoke Thursday of "restraint," "discipline" and "responsibility." We urge Wall Street to heed his words.