Wall Street Arrogance

I'm beginning to think the leaders of the nations largest banks and financial houses have studied the Roman Catholic Church at the Vatican for leadership style: make all kinds of horrifically bad decisions, allow all kinds of excesses to occur, and then refuse to be held accountable or to change behavior. These folks after all made/allowed decisions that led to billions of dollars of losses and head up companies receiving billions of taxpayer bailout funds. Yet they tacitly deny any responsibility and continue to draw obscene salaries while the average American suffers in the financial nightmare these people helped trigger largely due to greed and failure to perform their jobs responsibly. Why they haven't all been fired or resigned is troubling. Why some of these individuals did not practice what a few are now preaching is the height of hypocrisy. The Washington Post looks at the phenomenon. Here are some highlights:

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The chieftains of eight of the nation's largest banks could receive a tongue-lashing when they testify before a House committee today, but some on Wall Street have moved to preempt the withering criticism by proposing their own solutions to the economic meltdown.

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The banks helmed by Blankfein [Goldman Sachs head] and the other seven chief executives called to appear before the House Financial Services Committee this morning received $165 billion from the $700 billion government bailout. Lawmakers are furious at the executives over accounts of their lavish spending since receiving the taxpayer funds, and have attacked them for hoarding the money instead of using it to boost lending.

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Blankfein, whose firm received $10 billion in the bailout, also called for limits on executive compensation that could be more stringent in some circumstances than President Obama has proposed. Blankfein said senior executives should be paid a large portion of their bonuses in equity that they must retain until they retire. He also said it was critical that companies put a priority on reducing the risk of losses, arguing that it is necessary to prevent another crisis.

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But in previous statements, the executives have tried to strike a careful balance between acknowledging the need for more regulation and being reluctant to have rules stifling innovation. In a speech last year, Citigroup chief executive Vikram Pandit said there was a need for better regulatory oversight of systemic risk.

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These folks have proven themselves incapable of self-over sight and Congress needs to clamp down with new regulations to force a new behavior pattern. As for the banks hording bailout funds rather than make loans, they should be forced to return the bailout funds.