No Context as Obama Heaps "Shame" on Banker Bonuses
Friday's lead story by Sheryl Gay Stolberg and Stephen Labaton on President Obama's attack on "shameful" bankers who got big bonuses during a tanking economy last year, "Banker Bonuses Are 'Shameful,' Obama Declares,"lacked context that make the supposed windfalls seem less "shameful."The Times failed to note that the figure of $18 billion in bonuses for Wall Street bankers, while impressive,was actually down from a record high of $34 billion two years ago, or that those "bonuses" are actually a big part of banker's total compensation package.
From Friday's lead story:
President Obama branded Wall Street bankers "shameful" on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation's most prominent financial institutions.
"There will be time for them to make profits, and there will be time for them to get bonuses," Mr. Obama said during an appearance in the Oval Office with Treasury Secretary Timothy F. Geithner. "Now's not that time. And that's a message that I intend to send directly to them, I expect Secretary Geithner to send to them."
It was a pointed - if calculated - flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail. He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the $700 billion already authorized, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as $900 billion.
A front-page Business Day story by Eric Dash and Vikas Bajaj appeared under the regretful-sounding headline, "Few Ways To Recover Bonuses To Bankers." The "sober reality' was there was nothing "populists" (not liberals?)could do to take the money away.
"Shameful." "Outrageous." "The height of irresponsibility."
President Obama had some harsh words on Thursday for bankers who paid themselves billions of dollars in bonuses despite the sweeping government rescue of the nation's financial industry. Senator Christopher J. Dodd of Connecticut said "every possible legal means" should be used to claw back the money.
But the sober reality, compensation experts said, is that most if not all of the money that the banks have paid out is probably gone for good. The "legal means" Senator Dodd referred to are few. Unless actual wrongdoing is uncovered at the banks - and so far prosecutors have not disclosed any - the case for clawing back past pay is weak.
"It's not as easy as pounding the gavel on the table," said Michael S. Melbinger, an executive compensation lawyer at Winston & Strawn in Chicago.
How bonuses are paid in the future is another matter, of course. The furor is putting pressure on banks to change how they pay their employees, particularly when that pay turns out to be based on phantom profits, as was often the case in recent years.
Calls for reform are growing, and Thursday's salvos from Washington may have been partly intended to shame Wall Street into action.
Only the CBS Evening News, in a follow-up piece from Anthony Mason, noted how many on Wall Street have "taken huge pay cuts" and explained how bonuses are part of basic compensation: "While it's true that more than $18 billion in bonuses was paid to Wall Street workers in 2008, that plunged nearly 50 percent from the record $34 billion two years ago. The average worker saw a 37 percent drop in bonus pay last year to $112,000. That's the lowest level in five years. What's more, Wall Street uses the term 'bonus' differently." Viewers then heard from Scot Melland of Dice Holdings:
"It's more than likely that the bonuses paid to these financial services people accounts for 50 percent or 75 percent of their total compensation and it's geared to revenue brought in or success they brought into the firm. So it's more akin to a sales commission than what you or I would think about as a bonus."
Sports columnist Harvey Araton chipped in with his own financial expertise (and Bruce Springsteen fandom) in his Super Bowl column from Tampa, "At the Half, It's B-r-u-u-u-u-u-u-u-c-e." Araton, whose liberal huffing backfired in 2006 when he assumed the guilt of the Duke lacrosse players before the case against them collapsed, revealed himself to be a liberal fanboy for Springsteen rivaling leftist media critic Eric Altermanand urged the lefty rocker to make "those corporate fat cats squirm on their sofas."
After accusing the Super Bowl event of "crass commercialism occasionally mixed with patriotic pandering," the slobber commenced to run:
During a news conference that was billed as the band's first since 1987 and was nothing short of hilarious, the Boss reminded the guitarist Nils Lofgren (I can admit to owning one of his distant solo albums, the vinyl kind) that he was not supposed to say that as a resident of Scottsdale, Ariz., he will be rooting for the Cardinals to beat the Steelers.
Not in the contract, Springsteen said with deft comic timing. But who knows, maybe we'll get lucky and there will be at least one bold moment Sunday night when Springsteen goes rogue and rails against - oh, I don't know - offensive Wall Street bonuses, $18.4 billion worth.
Go ahead, Bruce, make those corporate fat cats squirm on their sofas. It's a one-time forum - make a lasting impression....When the Boss got a reluctant Van Zandt to take the microphone, Silvio of "The Sopranos" said, "I think one of the things that we're kind of proud of is that there's a certain inspirational quality to what we do, and that's because of when we grew up, we had the high standards of the '60s."
Say what you will about the flaws of that decade, at least it generated longstanding ideals more resonant than ever as of two weeks ago. [I presume he's referring toObama'sinauguration - TW] And after a news conference in which normally skeptical reporters sat at the edge of their seats and took cellphone photos of Springsteen and the other seven members of the band, it occurred to me that this was a pretty good match after all.