It's hard to know where to begin on a day that features Dick Armey attacking global warming on the grounds that God wouldn't allow it, a Raw Story piece on the Big Pharma corpo's who bought the Blue Dog opposition to any public health care option ever, and Rudy Giuliani complaining about how rich people are, you know, suffering and we oughta all quit pickin on em (all links from recent Norwegianity posts), but I gotta go with this NYT piece by Joe Nocera who takes note of the response bankers are having to the anger that's been directed at them, most recently when a number of TARP banks announced they will be handing out $5B in bonuses this year after gaming the govt banking bail-out.
Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008, according to a report released Thursday by Andrew M. Cuomo, the New York attorney general.
At Goldman Sachs, for example, bonuses of more than $1 million went to 953 traders and bankers, and Morgan Stanley awarded seven-figure bonuses to 428 employees. Even at weaker banks like Citigroup and Bank of America, million-dollar awards were distributed to hundreds of workers.
Apparently the poor dears are getting quite testy about the PR drubbing they've been taking. They just don't understand what we're all on about.
Why aren’t we seeing kinder, gentler banks trying to repay their debt to society? When I spoke to bankers this week, they sounded aggrieved at all the anger directed their way, and they claimed they were doing the best they could. And from their perspective, they are.
But their perspective is that of anyone running a business: their priority is to maximize profit for shareholders. That’s what capitalists do. And because they are banks operating in this difficult environment, maximizing profits means, for instance, jacking up credit card interest rates to cover increasing write-offs, and foreclosing when that makes more economic sense than modifying a loan. To ask them to put aside the profit motive, even temporarily, for the good of the country — it’s not even in their frame of reference.
This "Fuck you, this is what we do" attitude is precisely what ticks people off but as far as modern banks are concerned, asking them to stop being conscienceless predators is like asking a pile of swamp mosquitoes not to sting you any more. Modern bankers are such avaricious, unethical fuckwads that it is now in their nature to rip, tear, steal, and sting and they couldn't stop even if they wanted to. Which they don't.
I say "modern" banks because as Nocera points out, it wasn't always thus.
This is hardly the first time this question has stirred enormous anger. During the Depression, there was just as much antipathy toward the big money center banks, especially after the famous Pecora committee hearings exposed some of their seamier practices.
There was also, however, a surprising outlet for some of that anger. Under the laws at the time, bankers faced both criminal and civil liability when their banks went bust. “Bankers went to jail over this,” said Gary Richardson, an economics professor at the University of California, Irvine. This was true even though, in many cases, the failed bank had been a victim of the Depression-era bank panic, rather than a bad actor that had taken foolish risks, as is the case today.
“The government has always recognized that banks are special institutions with an important role in society,” said Mr. Richardson. “The whole ethos at the time was, ‘We’ll give you a lot of freedom, but if something goes wrong with these special institutions, we’ll punish you severely.’ ”
Golly. A banker going to jail for illegal practices is "surprising", huh, Joe? I guess these days it would be. I mean, we now longer believe in accountability for anything, not incompetence, not even criminal behaviour, if perpetrated by the rich or the Right. But Joe does get it an puts it about as baldly as it could be put in a corporate organ like the NYT Business pages.
[I]f bank behavior does change, it won’t be because bankers see some new light. It will be because the government forces change on them. It has happened before, and not just during the Depression. Banks used to hide basic facts about credit card loans — until Congress passed the Truth in Lending Act in 1968. Banks never used to lend in low-income neighborhoods — until the Community Reinvestment Act of 1977 forced them to start.
If we want banks to modify more loans, or extend more credit to small businesses, or roll back executive compensation, the government is going to have to enact rules to make those things happen. For the banking industry, that is the flip side of having a government safety net: the government also gets to set the rules. It needs to start doing so.
(emphasis added)
The govt has been setting the rules. The problem so far is that the Obama Admin has been setting only the rules the banksters would allow them to set. With captive corporate mouthpieces like Larry Summers and "Wall Street Timmy" Geithner making policy, it's unlikely we'll ever see anything come from this Admin that will force the banksters to do anything against their "natures". After all, it's Larry's and Timmy's nature, too.
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