I would like to offer a modest proposal for how to deal with one part of the current financial mess we find ourselves in. It is simple, follows the dictates of common sense, and no one other than a few thousand fat cats will disagree with it.

The proposal is this: the top leadership of every bank, insurance company, automaker and other corporation seeking a taxpayer bailout should not be given a bonus, period. In fact, they should be fired. Now, call me heartless, but how many of us could take a multi-billion dollar enterprise from years of profitability, turn it on its head, cause the loss of millions of jobs and the destabilization of our entire global economy, and not only keep our jobs, but get a six- or seven-figure bonus?

The arguments for paying bonuses come from the likes the AIG board and fall into two pathetic categories.

First, is the argument that they were promised a year ago and so are legally binding. The solution to the first barrier is pretty clear. The same lawyers who figured out how entire industries can cancel their retirement programs can certainly find a legal way to take back these bonus promises. Were they promised without any strings? No clauses stating: “If we don’t remain profitable, or if our stock price goes below $1, all bonuses are off?”

Second, without these bonuses the corporation will not be able to retain its top talent. As to the talent retention question, I fear I will risk insulting the reader’s intelligence when I ask: “Is this group of incompetents who drove the corporation into the ground really irreplaceable?”

President Obama likes to talk about a new era of responsibility. I say let it begin with those who benefited most from the run-up of the last few years, those who engineered credit default swaps, and those who insured them. Let the responsibility begin with those who got us into this mess. The homeowners who bought what they could not afford are now feeling the weight of responsibility, without anyone offering them a bonus. Yet the bankers and financiers who played upon the weaknesses of homeowners still get bonuses. I would modestly suggest otherwise.

This entry was posted on Monday, March 16th, 2009 at 5:36 pm and is filed under Assorted Musings, Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.