Will Wall Street Ever Learn?

By Mark Riley
As the pushing back and forth on President Barack Obama's economic stimulus plan continues, questions abound about whether big executives on Wall St. are really tightening their belts. Juan Gonzalez writes a column in today's NY Daily News that indicates the answer is "absolutely not!"

Sometimes you have to pull together various strands of fabric to make a quilt. Consider the following financial strands, and ask yourself what kind of quilt it makes. Keep in mind that Monday alone, somewhere on the order of 70,000 Americans lost their jobs.

John Thain, former boss at Merrill Lynch, spent $1.2 million dollars on redecorating his office in lower Manhattan.



The redo included $35,000 for a "commode on legs", $25,000 for a "mahogany pedestal table" $87,000 for an area rug, and $1400 bucks for a trash can. That's right, a trash can.

It gets worse. Bank of America, the company that took over Merrill Lynch, announced it would cut 35,000 jobs over three years. That was on Dec. 11th. That same week, John Thain doled out $4 billion (with a B) dollars in bonuses to top execs at Merrill. According to Gonzalez' column, Thain knew Merrill Lynch would show a fourth quarter loss of $15 billion dollars.

So too did the bosses at Bank of America, which was busy asking for $20 billion dollars in government assistance on top of the $25 billion they've already received. The upshot is that Thain was forced out just last week, but the damage had already been done.

The quilt from just these strands of fabric? Taxpayers paid for Merrill Lynch bonuses! If this was the only example of a clueless Wall St. it would be bad enough. Combine it with Citigroup's $50 million dollar jet (it had to cancel the order after it was made public), and the sale of former Lehman Brothers boss Richard Fuld's sale of his $13 million dollar mansion to his wife for $100 bucks, and you get the picture.

These sorts of outrages demand quick action from our new president. Never mind lobbying on Capitol Hill.

He needs to get the titans of American finance in a room, and read them the riot act.

His first question ought to be how it is that 100,000 bank employees have lost their jobs in the past two years, but nearly 90% of the top executives at 200 banks that have gotten federal money are still on the job.

In his inaugural address, the president talked about responsibility. Were America's bankers listening? Apparently not. It's time for Obama to make them pay attention.

What do you think?