The Obama administration got the desired headlines by announcing pay cuts for 25 bigwigs at each of seven companies that took our tax money to remain afloat.
The firms came back with the required protestations that bonuses in the millions of dollars (and cars and jets and country clubs) are necessary costs of business and the only way to retain top talent.
The problems with this little bit of theater, the ironies and the absurdities, are too many to list. Is this a tragedy, a comedy or a fairy tale?
The seven sinners include financial companies, automakers and an insurance giant, a representative sample of those who made risky bets or wrong bets and lost hundreds of billions of dollars. Executives of those companies took taxpayer money to survive, and now they won’t be able to pay themselves all the millions they had hoped.
If you add them up, Wall Street bonuses are still going to run into the billions. Some of these executives still want to give most of their (reduced) revenues to themselves instead of to the shareholders they are supposed to represent, not to mention the taxpayers who rescued them.
Nor should we forget the thousands of more typical employees of those same firms in Detroit and New York and around the world who have been laid off or who have taken real pay cuts during the past year.
There will still be plenty of annual bonuses of $1 million, the Wall Street equivalent of a holiday turkey from the boss, but equal to $500 per hour. That’s why you don’t see the top people racing out the door because of pay cuts. Where, exactly, can they do better?
The executive pay cuts are a political response to an image problem. The real question is, when are taxpayers going to get back the billions put up to keep these executives in their jobs?