Truth to tell, I do not feel entirely at ease when taking the banks and the financial community as a whole to task for their dismal mismanagement and ravenous greed. I am sure they are guilty on both counts but do not have the basic grounding in economics to explain why. On the other hand, there appears to be general agreement that their behaviour has been beyond the pale.
In a way, one doesn’t have to be well versed in such matters to reach such a conclusion. It’s not so much that no-one has exactly leapt to their defence, for that is hardly a conclusive argument. It’s simply their utter disregard for, and ignorance of, the likely public reaction to the question of bonuses for their executives. Even assuming for the sake of argument, that the executives in question were innocent of any incompetence – and that beggars belief – how could they possibly believe that claiming their fat bonuses with the economy crashing around them would not unleash a wave of public outrage? The charitable explanation would be that have lost all touch with reality. But there is ample evidence to suggest that in many cases they in fact went to great lengths to make sure they “cashed in” before it was too late:
- NEW YORK (Reuters) - Merrill Lynch secretly accelerated bonus payments last year and gave at least $1 million to each of nearly 700 employees, even as the brokerage was amassing billions of dollars of losses, New York Attorney General Andrew Cuomo said in a letter to U.S. Rep. Barney Frank. Merrill executives have drawn fire because they paid 2008 performance bonuses in December, earlier than usual and despite the fact that Merrill would by January 16 reveal $15.3 billion of fourth-quarter losses. (Reuters)
In short the banks stand convicted not only of crass, not to say criminal, incompetence but also of naked greed.
No further questions, your honour.
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