President Obama yesterday scolded Wall Street bankers who received millions of dollars in bonuses last year, calling the payouts “shameful” and chiding the executives for a lack of personal responsibility at a precarious time for the nation’s economy.
“There will be time for them to make profits, and there will be time for them to get bonuses,” the clearly irritated president said. “Now’s not that time. And that’s a message that I intend to send directly to them.”
Excuse me for a moment while I digest that last sentence… … … OK. That took longer than I expected. I had to go look through my pocket constitution and see where it says that the president has the power to decide when corporations make profit and how much to pay their workers.
And of course, as with anything that politicians don’t like, there is the threat to ‘do something about it’:
“Whether it was used directly or indirectly, this infuriates the American people and rightly so,” said Sen. Christopher J. Dodd (D-Conn.). “So I say to anyone else who does it: If you do it, I’m going to bring you before the committee.”
Forgetting about the issue of whether it’s any of the government’s business, maybe it is now that we own a piece; are bonuses really shameful? My understanding is that when people negotiate salaries in the financial sector, the understanding is that much of that will be in the form of a bonus; so bonuses on Wall street are much more akin to direct compensation than they are in other industries. If that is true, then any move to restrict bonuses would just result in an increase in salary. Is that true?