How to Cover Wall Street

Source: Bloomberg

Barney Frank speaks to reporters

The outrage over Wall Street pay has erupted too late to prevent the ravages of the corrupt financial system.  Few workers earning average salaries, and ever fewer politicians, raised objections to spiraling Wall Street salaries when the financial services industry fueled the boom in New York’s and the nation’s economy.

Now that tens of thousands of workers who benefited from the largesse are on the dole or losing their homes, politicians are demanding changes in Wall Street pay.  Where were these concerns when times were good?  Aside from being disingenuous now, these calls are also moot, because most bonuses this year will be dramatically lower than they have been in the last several years.  They are likely to stay that way for some time as capital flows elsewhere.

Henry Waxman could have called hearings years ago when the crisis was festering; to do so now reeks of political opportunism.  Even worse, Waxman’s witch hunt is a cowardly sideshow that ignores the fact that he bears responsibility for the crisis as well.

Putting all that aside, investment bankers make tons of money.  Perhaps they earn more than they deserve.  But how much is too much, and who gets to decide that?

It would be easy if we could ascribe value to the amount of good each profession produced for society.  If so, good public school teachers might make a half million dollars a year.  But what of the bad ones—how much should they make?  Should we dock their pay for poor results in the classroom?   This country faces a lot of irresponsibility and not just on the trading floor or the boardroom.

America should get serious about accountability, but let’s not stop at Wall Street.  Focusing solely on the financial services industry will only hurt New York, (and maybe Charlotte) which relies disproportionately on this sector to drive its economy and pay its bills.