Top of the News: Happy days are here again. For some.
Big banks and investment houses are planning to award $140 billion in compensation this year, according to the Wall Street Journal. That would be a record. Employees would average $143,400 each, up $2,000 from 2007’s previous record.
If ever there was a sign of the increasing divergence between Wall Street and Main Street, here you have it. Outside of these major securities firms and banks, the nation faces its worst joblessness since the early 1980s, and by many measures since the Depression. Foreclosures keep rising. Small businesses can’t get credit. Many workers have seen sharp pay cuts. And despite economists’ talk of a recovery, few see it as more than tepid, full of risk and taking years to even recover the jobs lost since 2007.
But on Wall Street, the stock market has improved. Thus, the reward — as should happen in capitalism. After all, it’s mere churlish envy to keep waving the bloody shirt of executive pay… There’s just one problem.
The epicenter of the Great Recession were the practices of these same banks and securities outfits. The disaster forced American taxpayers to bail them out with a great expenditure of treasure — even many of these same taxpayers were losing 401(k)s, homes and jobs. Now the finance gang is back to packaging derivatives, brewing systemic risk, the too-big-to-fail bigger than ever. The shadow banking system is in the shadows. And the whole complicated contraption seems ever more removed from creating American jobs and prosperity.
Even modest regulatory reform has stagnated. And today we learn from Bloomberg that top aides to Treasury Secretary Timothy Geithner earned millions of dollars a year working for Wall Street firms. And yet the peasants down on Main Street seem docile enough.
Today’s Econ Haiku:
It’s scary out there
Don’t get tangled in the Web
Download your patches