http://finance.yahoo.com/tech-ticker/kill-wall-street-bonuses-or-tax-'em-to-death-mit's-simon-johnson-says-402210.html?tickers=XLF,JPM,GS,BAC,C,MS,WFC
A must see interview for sanity's sake in the defense of common sense.
Bashing big banks is all the rage this week, with White House officials and New York Attorney General Andrew Cuomo scolding Wall Street fat cats ahead of the Financial Crisis Inquiry Commission, which gets underway Wednesday.
At issue is what level of bonuses are appropriate for publicly traded firms that posted record profits in 2009 thanks to the government's largess and after being rescued in 2008.
Simon Johnson, professor at MIT's Sloan School of Management and former chief economist of the IMF, says there's a simple solution to this seemingly complex problem: "People working at our largest banks - say over $100 billion in total assets - should get zero bonus for 2009."
Looking back, all the big firms were saved by the various government programs, including Goldman Sachs and Morgan Stanley were allowed to convert to bank holding company status in 2008, Johnson says. "There were unconditional bailouts for all our big banks - it was a decision made on the fly in the crisis. Let's not second-guess," he says. "But no way that strategy implies, requires, or is consistent with the banks then paying all that money out to their employees."
