How to Cover Wall Street

So, Lloyd Blankfein has decided that Goldman Sachs’ top management will forgo their yearly bonuses this year, bringing the “will they or won’t they” argument to a close. Now the others are expected to follow suit.

Smooth move, Lloyd: Please Washington by taking a hit at the top; let the “little people” take home their bonuses; and Wall Street and Main Street are finally reconciled.

Goldman’s “goodwill” move has prompted executives at UK-based, Barclays, PLC, Germany’s Deutschbank AG and Switzerland’s UBS AG to abandon bonuses for senior managers. But executives at Morgan Stanley, Citigroup and AIG aren’t lining up to fall on their swords. In fact, John Mack and Brady Dougan are conspicuously silent on the matter while Vikram Pandit has decided to eliminate the bonus question altogether by slashing jobs.

Everybody should take home a bonus this year, even if I’m not. It’s kind of crazy for Americans in general to expect that, just because they’re hurting, everyone else should hurt too. Congress can mask their little witch hunt as an effort to curtail corporate excess but, seriously, no one went after hedge funds at the peak of their profitability. Nobody targeted Exxon when they announced that they made over $14 billion in the third quarter of this year. So, now, making money is a problem?

Absurd.

Yes, exposure to toxic mortgage-backed securities ruined the global economy. And Wall Street should take the blame. But what is the Street supposed to do: repay investors out of the money that would have gone to bonuses? That’s not free-market capitalism. Moreover, nobody on either side of the Atlantic has mentioned that as an option.

Every economy in the world will have to limp through this recession. And — I’ll admit — some people need to go down for this. But making everyone poor won’t do anyone any good. Besides, if Blankfein — who made more than $50 million in 2007 — is an appropriate model for the typical Wall Street manager, taking a haircut in a bad year won’t hurt those at the top anyway.