"American Pychos Continue to Look for Big Bonuses"

January 30, 2009

Yesterday President Obama (side note: I know it’s early for a side note but I have a gripe with our culture and media right now with the fact that people continue to call this man “Obama” or “Barack” like they are on first name basis with the President of the United States. Can we please give the respect that is well deserved to our new civic leader? I mean we really made a conscious effort to refer to him as “President-Elect” Obama so why can’t we drop the “Elect” part now? Just my views…) discussed the data concerning Wall Street bonuses of 2008; the aggregate total amounted to $20 billion which is equal to what was paid out in 2004. President Obama described the act as “shameful. We're going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if we are to together get this economy rolling again.”
Some individuals in my industry may argue that it is true that bonuses were equal to 2004 levels but would also claim the bonuses are much lower than 2006 and 2007 levels (which were both in the low $30 billions). But I will admit that Wall Street compensation has gotten out of control. One reason the economy is in the mess it is in is because a lot of very wealthy (and some not so wealthy) individuals took huge financial risk and entrusted their money to young adults in their early 20s to increase their wealth—even though most (if not all) Wall Street bankers/traders/analyst don’t have the slightest idea of what they are doing! I will never forget a conversation I had with a co-worker who has been in the business 12+ years. He told me straight in my face that “Earnest, I don’t think we will ever make as much money again as we made in the past.” This was after he told me of anecdote when in 1995 as a youngster in the business he demanded in his year end review to have a 3 handle in front of his total earnings (meaning he wanted to make $300K)—and his supervisor actually gave it to him! Oh the height of Wall Street! I honestly missed the best time.
I must admit that I do agree with President Obama that we [Wall Street] should act more responsibly since we have had a large part to do with the world economic downturn. However it is very bitter sweet for me. I came to this industry for one goal, and I can assure it is not what I told those who interviewed me, to MAKE MONEY! I don’t find it interesting if a company acquires another or if a stock is at an all-time P/E ratio high, but I do find it interesting that they will pay me a six figures to learn on the spot when I don’t add any value to the society as a whole. That was the bitter portion of my feelings—the sweet portion is that I hope this leads individuals to follow their passions. I honestly feel that the world is in the current state it is because too many individuals follow the safe and (once thought) secure money making opportunities of Wall Street. Think about this, if President Obama would have taken the same opportunities that were before me after he finished Columbia or Harvard Law—how would the world look on January 30, 2009 then? Luckily I don’t even have to know the answer to that question.