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Friday, October 23, 2009

The Theatre of Wall Street Salaries

Gosh, the horror of the government actually putting in restrictions so that the Wall Street bankers have compensation restrictions.

Lest we forget, if they were physicians they'd be up to their necks in malpractice lawsuits. They did, after all, bring on a the worst economic downturn since the Great Depression.

But this is likely to be largely theatre. Marginal Revolution points me to this Washington Post article noting that many of the people whose compensation is being restricted don't even work at these companies any more.

"At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. Under his plan, compensation for the most highly paid employees at the bank would be a maximum of $9.9 million. The bank had sought permission to pay as much as $21 million, according to Treasury Department documents.
"At American International Group, only 13 people of the top 25 were still on hand for Feinberg's decision."
The problem remains that Wall Street has achieved far too much influence in Washington, under both Democrats and Republicans. (Note the many of the architects of the bumbled GWBush response are still in charge, notably Geitner and Bernacke.)

The salary restrictions are going to turn out to be mostly theatre, just done to convince the masses that the administration is "getting tough". Those who remain at these companies have probably already found enough loopholes to drive a Brinks truck through.