Remember when Nancy Pelosi became Speaker of the House? One of her first remarks was that she intended to trot up to the White House, and use her mommy voice on the President of the United States.
Democrats do have a way of thinking they have parental responsibility for the rest of us. Yesterday, Obama got himself quoted in all the news outlets to the effect that he was outraged over a report from the New York State Comptroller’s office.
That report has it that “Wall Street” (I don’t know exactly which companies that means in this case, because I haven’t read the Comptroller’s report) paid out about $18 billion in bonuses at the end of 2008. Bonuses are usually determined in early to mid November, and hit their recipients’ bank accounts in January. So we’re talking about the incentive compensation that bankers and finance professionals received for their performance in 2008.
Except, as Obama rightly points out, 2008 was the worst year in the industry’s history. By rights, very few finance professionals and managers should be getting bonuses for last year. And Obama is on to something very important, which is that the optics of this situation play out in a very evil way to Americans at large, many of whom are concerned about keeping their jobs, much less getting bonused.
What makes it explosive, of course, is that in many cases, the money for the huge bonuses (which can average $600,000 per employee or more at top firms) is coming out of stabilization funds provided by the taxpayers to banks and Wall St. firms.
Now having said all that, let me say this, and this I know: Wall St. will not tolerate rescissions or clawbacks of their bonuses. That’s just not how the financial industry works. Let’s have a debate about whether this should be changed legislatively, but you’re not going to see any of this change retroactively.
Now one assumes that Obama, who is among the Smartest People In America™, fully understands this, and is simply playing to the cameras.
On the other hand, his experience is as a community organizer, university professor and a state legislator, worlds in which observable reality doesn’t matter all that much. The man may honestly believe he’s Elliott Ness, with a mandate to clean up the cesspool of Wall Street.
If he does believe this, then Wall Street will eat him for lunch.