Rather than cashing those bonus checks, Wall Street’s chiefs could repair their tattered reputations by donating a mere 10 percent of those 2009 bonuses to victims of the Haitian earthquake, a suggestion recently made by Professor Juan Cole in his Informed Comment blog.
Last Wednesday, the day after Haiti’s devastating 7.0 earthquake, leading bankers were hauled before the Financial Crises Inquiry Commission, where they gave nuanced and carefully worded statements that stopped well short of apologizing, let alone suggesting that they give back any of their profits to citizens who lost their livelihoods and homes in an economic meltdown fueled by risky trading.
Goldman Sachs’ CEO Lloyd Blankfein and other bankers trotted up to Washington to offer an explanation of last year’s financial crisis and to take a congressional scolding. Blankfein expressed regret, but no apologies for his firm’s actions: “I do think the behavior is improper. We regret the consequence that people have lost money in it.” This from a company that set aside almost $17 billion – that’s 47 percent of net revenue – for total executive pay, including bonuses, for the first three quarters of the year.
At that hearing, Bank of America’s CEO Brian Moynihan acknowledged public anger over the banks’ role, saying, “We understand the anger felt by many citizens. We are grateful for the taxpayer assistance we have received. Over the course of the crisis we, as an industry, caused a lot of damage.”
Despite the gently stated regret, Wall Street bankers haven’t been reluctant to grant tens of billons in bonuses for a profitable 2009. It’s been a “good year on Wall Street” was how executive compensation consultant Steve Hall explained the situation on NPR. Hall, however, pointed out that part of that “good year” was due to Wall Street investing government bailout money in Treasury bonds rather than on Main Street, the government’s intended destination for the money.
Meanwhile, Haiti has a gross domestic product of about $11.5 billion, less than half of the lowest estimate of Wall Street’s bonuses.
“The Haitian government’s budget for all purposes – social services, justice defense, administration – is, I believe, $1.6 billion,” said Brian Concannon Jr., director of the Institute for Justice and Democracy in Haiti. “If a percent of these bonuses for a few executives were to add up to that, they would certainly be able to double the government budget for a year, and that would make an absolutely spectacular difference.”
Spectacular indeed, even if just 10 percent. The mean of 10 percent of those bonuses – $4.55 billion – would be more than twice Haiti’s annual budget and would be far greater than the United Nations’ and the U.S. governments’ combined annual donations of $250 million.
If Wall Street took this bold step, it could convince the rest of us that the cold black stone “Banker’s Heart” sculpture in front of the Bank of America building in downtown San Francisco is an unfair and cruel misnomer.
John Spriggs is an information technology specialist. Tim Kingston is a freelance writer.
This article appeared on page A – 8 of the San Francisco Chronicle