Isn't that rich? The bonus controversy of 2009
By Frank Ahrens
Probably no issue in the business world raised more anger in 2009 than Wall Street bonuses. Things such as bailouts to banks and automakers, the budget-busting stimulus package, and programs including "Cash for Clunkers" made many unhappy, but each had its defenders. It's harder to find anyone who favored continuing the long-held Wall Street practice of giving big end-of-year bonuses -- especially at banks that received government handouts.
The issue was emotionally loaded because it struck at the heart of broader debates over wealth, fairness, the role of government and the nature of capitalism. And what probably infuriated people most was their deep-down belief that, in the end, Wall Street wins. That seemed confirmed by an October report in the Wall Street Journal that said compensation at banks and securities firms was on pace to hit a record high in 2009, despite government rhetoric to the contrary.
There was also a bit of kabuki -- politicians beating up on bankers, but only to a point, knowing they would have to turn to them in the future for campaign donations.
So now, during bonus season, we look back at some of the key statements from the Great Bonus Controversy of 2009. The gap between what was said and what was meant was often pretty big -- as big as a Wall Street bonus.
President Obama's top economic adviser, speaking to ABC News on March 15 about bonuses to AIG's Financial Products division:
Rep. Barney Frank (D-Mass.)
March 16, about AIG management:
March 18, as public ire over AIG bonuses grew:
Pay czar, on denying bonuses to AIG's Financial Products division, on Oct. 23 :
Goldman Sachs chief executive, responding to the Times of London about criticism of the firm's big bonuses, on Nov. 8
Blankfein, days later, when announcing a multimillion-dollar PR program to help small businesses:
British Chancellor of the Exchequer, announcing a 50 percent tax on bonuses over $40,000, on Dec. 9:
Wall Street insurance broker, in the New York Times, on Jan. 30:
Frank Ahrens is a Washington Post business reporter. He blogs at washingtonpost.com/economywatch.
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