While bonuses are still a contentious issue in the United States, they have been overtaken recently by the debate over health care reform.Of course, it's not entirely our fault for having the attention spans of a goldfish. It doesn't help that the ultimate Wall Street insider Timothy Geithner has been
cool to proposals to restrict bonuses,"The French finance minister, Christine Lagarde, continued to insist that
Bonuses are quite outrageous, and we can’t let that continue.”Finance Leaders Back Continued Stimulus, but Limits on Pay Are Elusive - NYTimes.com. I am, like most Americans, guilty of this inability to focus on all the pressing issues that assault us daily in the news. But the populist anger that bubbled to the surface last year against banker bonuses was correct then and it's even more correct now. These bonuses are not deserved. The bankers got us into this mess with their insanely risky loans to people who couldn't afford them at interest rates that make loan sharks look like the good guys. They also got us into this with the financialization of banking, making unethical amounts off of "fees"- something the banks have really taken advantage of this year with more and more people lacking sufficient funds and overdrawing their accounts or missing payments, banks have moved in like the sharks they are to make record profits off of struggling Americans. Furthermore, the absolutely insane propaganda coming from the likes of Geithner that these salaries are "good" for America because they attract the "best and the brightest" is not true. Insanely high salaries attract the greediest. Period. Work that doesn't involve screwing other people and is fairly compensated attracts the best and the brightest since the best, by definition, are motivated by more than money. Worse than attracting the greediest, these insane salaries and the sort of income inequality they represent are really bad for the rest of us. In the US, the too-well-paid put pressure on everyone to spend more to "keep up." According to economist Robert Frank in Falling Behind: How Rising Inequality is Hurting America's Middle Class, when people get super rich they drive the cost of living up for the middle class. For instance, people who make $4 million a year are happy to pay a million for a house in a good school district. The result? Middle class families who want to live in a good school district have to compete for housing in a real estate bubble. The idea that there is some way we can pay some people huge salaries and that will "trickle down" to the rest of us has been disproved by the past 30 years of increasing income inequality in the US. CBO figures show that most Americans were worse off- in more debt, with fewer assets- than in 1980 even before the current Great Recession. I say this, again, as someone who cannot pay attention to any one issue for more than 5 minutes myself: It's time to FOCUS. It's time to PAY ATTENTION. Bank bonuses must be regulated. Greed is not good. And real economic well-being depends on us keeping the pressure on the Obama administration to INSIST that the US accept France and Germany's proposal to regulate bank bonuses. Nice castle.