Go ahead, cut Wall Street's pay.
Here’s the thing about the mandatory Wall Street pay cuts: Changing salaries won’t stop what’s really wrong there.
What’s wrong is that they are handling our money in an unsafe way.
They’ve taken a huge slice of the economy, set our financial system at risk and basically, we can’t make them pay us for what they’ve done.
All this talk about how the brains will exit the business if pay is capped, well, would that be a bad thing?
Like maybe we could take some of those smart people and set them to tasks that might actually help rather than hurt us in the long run, hurt us like toppling our banks and crashing our retirement portfolios? (They're estimating Americans' net worth dropped in this crisis by about $15 trillion.)
I mean, would it be all that bad if Wall Street shrank?
Earlier this week, former Fed chairman and Obama economic advisor Paul Volcker spoke of "structural imbalances" that threaten the economy, still. And need to be cured before a recovery can become a true recovery.
''We have to regain our ability to produce goods," he said at Harvard's Kennedy School of Government. "Moving money around does not necessarily provide dinner on the table. You can't run an economy where the financial sector is making 40 percent of the profits."
That's a thought.
Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.
Comments
if we are going to clean up...lets also have cut and freeze some govt payroll as well.....after all they are spending twice as much as they are taking in..do they deserve raises or bonuses....nobody is screaming about freddie and fannie getting bonuses or the postmaster general who lost 8 billion this year in the post office.
Posted by: LOU | October 24, 2009 10:34 AM
lets freeze govt salaries as well .why are freddie and fannie mae ceo s getting bonuses when they had to be bailed out.why are they not cutting the postmasters salary ..why should he get millions and bonuses for losing 8 billion this year....and every senator that signed the stimulus bill should be fired for not having fiscal responsibility with taxpayers money and they didnt even read it ....we are spending twice as much as we are taking in....that cant work
Posted by: LOU | October 24, 2009 12:52 PM
You don't have to cut the pay just change their business model.
If casinos can operate safely in vegas without requiring a bailout definitely the "smart" guys/gals on wall street cam do the same.
Hold the executives accountable. If you are at the helm of a company that goes bankrupt you must forfeit all your ill gotten wealth.
Posted by: jay | November 21, 2009 1:57 PM