Ex Post Facto Pay Limit

Wall Street awarded $18.4 billion in bonuses last year, the sixth largest pay in history, to its finance employees, which made those senior bankers who received government assistance the biggest beneficiaries. U.S. President Barack Obama condemned the bonuses as “shameful” and announced pay limit regulations for executives to not surpass $500,000 per year.

 

This is just a political gimmick with little actual help. It might ease the people’s anger, showing that Obama is with the people and that the president can really understand the feelings of common Americans, but it is a gimmick because this pay limit regulation is not ex post facto (retroactive). Hence, Goldman Sachs, JP Morgan Chase, and hundreds of other financial institutions who had received the earlier bailout funds will not be affected. In other words, Obama was barking up the wrong tree as those shameful bankers have not been punished. The bankers were collecting money from both sides and threatened the government with insolvency in order to get large amounts of assistance, all while making money from the banks. They had indeed destroyed their companies, and the American and the world’s economies, but still claimed the biggest share of bonuses. 

There is nothing more unjust than this. Speaking of corporate culture, isn’t it supposed to be performance based? Pay cuts and no bonuses are deemed too generous for these bankers; a more reasonable punishment should be dismissal and repayment. But how could these bankers even get rewards? They have a share in everything, but are exempt from corporate and social responsibility. Wall Street’s image cannot recover from this in 10 years.

The problem is that those ignoble bankers don’t even care about their image. The only way to frighten them is through severe fine or imprisonment. Obama did not take such punitive measures. He did not punish current offenders, but merely regulated those to come and has hence drawn withering criticism. Wall Street and bloggers rebutted, pointing out that the president’s benefits, with a private jet, driver, chef, high class chalet, and tax exemption, are not much better than Wall Street’s.

This further shows how shameless and hopeless Wall Street is. The American president serves the country, supervises Congress, and is being paid even less than Taiwan’s president. How could his benefits be comparable to those top executives of big corporations? Wall Street bankers work for their companies and make money for themselves. In the end, they failed their companies and refused to be monitored, but accepted the bailout funds immediately. After they were given so much money, they don’t feel a bit ashamed about the unhappy public and even rebutted criticism with sarcasm.

As such, Obama’s decision not to punish the banking industry to avoid further problems is not right, at least not morally, as this will tarnish his credibility as the country and world’s leader. He should understand that one’s greed never ends and without further control will only lead to tragedy. How could a maximum pay of $500,000 restrict Wall Street? They have the world’s smartest brains to find loopholes and, moreover, they are already “established” in doing so. They can easily use little tricks like positions and bonuses. General Electric ex-CEO Welch and current Apple chief executive Steve Jobs both receive only a dollar pay and has their income ever decreased?

The only way to reform the ignominious Wall Street and stop the bankers is the same way that ex-New York Attorney General Eliot Spitzer investigated and charged in the past: by Congress formulating strict business and company laws and enforcing a stern auditing policy. Business studies in school should start all over again, emphasizing on business, moral, and social responsibility.

All of America is busy rescuing the economy and Congress is debating on bailout funds, but so far nobody cares how this large amount of money was spent. Was there any checking and auditing? When Americans find out that they have been deceived again, the only way to ease the angry outcry will be to put a few bankers behind bars. But Mr. Obama’s destiny will not be any better by then.