Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

October 14, 2009 at 9:30 AM

Wall Street parties like it’s 2007, while Main Street faces a long wait for recovery

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

Comments | More in Bailout

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►