Why is America mad as hell at Wall Street and not going to take it anymore? Well, for starters, there was that role in the housing crash. Then there was the absorption of hundreds of billions of dollars of taxpayer cash just to keep itself alive. And now there is the decision to continue to pay itself huge bonuses after accepting said taxpayer cash.
But wait, haven’t some Wall Street CEOs forgone bonuses? Yes. But the rest of Wall Street hasn’t.
According to the New York Comptroller, Wall Street bonuses will be down 50% this year. Wow–50%! Sounds huge. Yes, in terms of total dollars, it is huge. The New York real-estate market and the New York City and State budgets will get crushed.
But a 50% reduction in bonuses still leaves a huge bonus pool. How huge? $16 billion for New York City alone. Or about $90,000 per person.
Also, to put the 50% cut in perspective, the profits of the country’s financial-services firms will drop more than 100% this year. How can profits drop more than 100%? When the industry as a whole loses money. In 2007, says Goldman Sachs, the financial-services firms in the S&P 500 earned $15 a share. This year, Goldman estimates, the figure will be a loss of $12 a share.
Profits down more than 100%, bonuses down 50%. Not too hard to understand why everyone in the country is still desperate to work on Wall Street.