Every year many of our most accomplished students, with the highest GPAs and academic honors, take jobs in finance. Jobs on Wall Street have been the college carousel’s gold ring. They carried the most prestige and paid the highest salaries–two ways of saying the same thing. Our students’ entry-level salaries were not high in Wall Street terms; they were merely a taste of what was to come. It was accepted wisdom that people on Wall Street deserved obscene amounts of money because they worked long hours and were just plain smarter than everyone else. They earned what the market said they were worth, and the market was always right.
Can anyone say that today with a straight face? Wall Street’s best and brightest have wreaked economic carnage. The arrogance, greed, short-sightedness, and blind failure of Wall Street’s leaders to understand simple tenets of risk managment created the most cataclysmic loss of wealth in history. Everyone is suffering because of their mistakes. The market has repudiated every justification for their outsized compensation. Whatever financial genius they possessed individually, they were not smart. A smart creature does not gorge itself until it dies. A boss used to say “pigs get fat, hogs get slaughtered.” Wall Street was dominated by hogs, but we’re the ones being slaughtered.
How else can one respond to the $4 billion in bonuses paid by John A. Thain, former head of Merril Lynch, before it was acquired by Bank of America? Merrill, recall, was on death’s door when Bank of America acquired it. Another few days and it would joined Lehman Brothers in the financial afterlife. It had failed. Bank of America has received billions in taxpayer bailout money to absorb Merrill’s losses and its own losses. Merrill paid these bonuses with our money. As Merrill was sinking John Thain spent $1 million in office renovations, including two chairs for $87k and a $1,400 wastebasket. This is one of the Wall Street geniuses who received hundreds of millions in compensation because that’s what you have to pay to get talent like his.
Disgusting. Incomprehensibly arrogant. Unfathomably stupid. I second Mauren Dowd: “How are these ruthless, careless ghouls who murdered the economy still walking around (not to mention that sociopathic sadist Bernie Madoff?) — and not as perps? Bring on the shackles. Let the show trials begin.”
As an icon of expertise, as an example of American genius, as a symbol of the wisdom of markets, Wall Street is dead. It self-devoured. It’s highly-compensated leaders deserve our scorn and contempt.