In previous blog posts, I discussed my disappointment at how banks and Wall Street were continuing to pay themselves excessively. Bonuses keep getting paid at super high levels - there are articles in Time, The NY Times, Newsweek and BusinessWeek. All of this because of the need to retain talent. I'm sorry, I went to school with a lot of these folks. They are good, but not worth millions more than execs in companies large and small who have cut salaries across the board to prevent layoffs.
It is clear that the taxpayers saved the hide of these folks. Currently cheap money is keeping these companies profitable. Yes, there is taxpayer self interest because we want to be paid back, but large bonuses take away from paying us back.
George Will had it right when he said that no financial institution with taxpayer support should make more than the equivalent government position - about $150k. And yes, that includes firms like Goldman Sachs that have a Federal Reserve backstop. So if they can't police themselves, it is time for the people to step in. I hate to say this, but it is time for a massive tax increase on the wealthy. This kind of stupidity creates massive inequality - the kind of stuff that starts revolutions.
Anyone making above $1 million in salary should have to pay a total of 50% in income taxes with no deductions. It comes right off the top with no income tax refund or return. Capital gains are excluded with the exception of anyone who profits off of carried interest (like hedge funds). On top of this, we should have a transaction tax on all financial transaction. This should go into a G20 global financial stability fund to prevent further excesses from bringing down the system.
I understand that many may call this liberal, but that's a silly label. Entrepreneurs and legitimate businesspeople are taking real risks, while these financial folks are not showing the kind of restraint and forbearance that they should after almost destroying our financial system. Many of these folks are fighting tooth and nail against regulatory reform which harmonizes rules in a way that benefits consumers and create a level playing field It's time to rebalance the system of risk and reward. A privileged few not be allowed to control our system to their sole benefit.
So fix yourselves or the people will fix you.