Clive Crook
Whenever you wonder if rage at Wall Street is getting a little out of hand, some titan of the industry speaks up and makes you think, “Let’s go down there and smash some windows.”
Top banking executives appeared last week before the Financial Crisis Inquiry Commission, set up by Congress to look into the debacle. Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase were far from contrite. Both said how well their companies were doing despite the crisis, which had been a nuisance, to be sure, but more an act of nature than something their industry brought about. “There are a number of things we could have done better,” Mr Dimon conceded graciously.
When you measure that complacency against the harm the slump has inflicted on millions of innocent bystanders, rage seems the only apt response. Revenge is called for. How about a fine, to punish the bandits and show them who’s boss?
Last week the White House said the country’s biggest banks should pay a “financial crisis responsibility fee”. Levied at 0.15 per cent of liabilities (excluding deposits and regulatory capital), it would raise about $90bn (€62bn, £55bn) over 10 years if enacted. The administration wants the fee to remain until fiscal losses under the troubled asset relief programme, estimated at about $120bn (but likely to be less) are recovered. “We want our money back, and we’re going to get it,” said Barack Obama. Tough talk, and good politics. The Democrats need both.
Top banking executives appeared last week before the Financial Crisis Inquiry Commission, set up by Congress to look into the debacle. Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase were far from contrite. Both said how well their companies were doing despite the crisis, which had been a nuisance, to be sure, but more an act of nature than something their industry brought about. “There are a number of things we could have done better,” Mr Dimon conceded graciously.
When you measure that complacency against the harm the slump has inflicted on millions of innocent bystanders, rage seems the only apt response. Revenge is called for. How about a fine, to punish the bandits and show them who’s boss?
Last week the White House said the country’s biggest banks should pay a “financial crisis responsibility fee”. Levied at 0.15 per cent of liabilities (excluding deposits and regulatory capital), it would raise about $90bn (€62bn, £55bn) over 10 years if enacted. The administration wants the fee to remain until fiscal losses under the troubled asset relief programme, estimated at about $120bn (but likely to be less) are recovered. “We want our money back, and we’re going to get it,” said Barack Obama. Tough talk, and good politics. The Democrats need both.
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Why does Wall Street make the big bucks? A nation with 10 percent unemployment is understandably puzzled and outraged when the very people at the center of the financial crisis seem to be the first to recover and are pulling down fabulous pay packages. At Goldman Sachs, the average pay for 2009 has been estimated at nearly $600,000; at J.P. Morgan Chase's investment bank, it's been reckoned at slightly below $400,000. These averages conceal multimillion-dollar bonuses for top traders and investment bankers; underlings get smaller sums. Are Wall Street's leaders that much smarter and more industrious than everyone else?
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