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Sunday, February 8, 2009

Theft on Wall Street ?


Rewarding Incompetence?


Many banks, both traditional and investment found themselves in a great deal of trouble to the extent that if the US Government had not come forth with a whole lot of money to bail them out, they would have become bankrupt. Then, it was discovered that at the end of the year the executives awarded themselves and their staffs some 18 billion dollars in bonuses.

CNN asked their viewers whether they thought that this was correct, or whether these bonus payments must be returned? That opened a floodgate of responses and among them there was not one "No" to be found.

President Obama upon hearing the news said that he thought the practise was “shameful!”

“Bonus: An unsought or extra benefit. A seasonal gratuity to employees beyond their normal pay. An extra dividend or issue paid to the shareholders of a company. A distribution of profits to holders of an insurance policy. Bonus: a good thing.”

Those are the descriptions of a bonus given by the Oxford Dictionary.

In my working lifetime I have been a recipient of the year-end bonus at Christmas that was well appreciated. It happened only in those years where we exceeded profit projections and was given as a part of the extra profit and an incentive for us to repeat our performance the following year. In those years where we came in on profit target, or below expectations there was no bonus, for there was no basis on which to award one. We all understood!

So, considering that the 18 billion dollars was given out by companies that were about to fall off the edge into bankruptcy begs the question: how can a bonus be justified? Especially in the light of those companies receiving taxpayer’s dollars to fund such preposterous spending, it seems to me that quite possibly a crime of theft may have been committed.

One CEO of a bank is reputed to have said that if he doesn’t pay his best people well they will leave. He seems to be talking about the very people who got his bank into the mess that it’s in, so not only should they leave, they should be fired! They certainly should not be rewarded.

If President Obama has said that in his opinion what has taken place is shameful, we can be sure that he is directing the Justice Department to look into whether it was also illegal. What America needs is for everyone to be at the head of the line pulling one way to get itself out of the mire that it is in. The example of some people doing things that are counterproductive is like having them on the opposite side pulling backwards, and that simply just cannot be tolerated. What a tough job the President has taken on!

Copyright © 2009 Eugene Carmichael