Bonuses show shame in short supply on Wall St.

As if the huge bonuses paid out by banks responsible for this nation’s economic collapse were not insulting enough to the American taxpayers who have had to bail out the financial institutions, here’s the justification given for the largess: The employees would have defected to their competitors.

Lest anyone forget, these so-called valuable employees were the very ones who were involved in the Wall Street scandal that has caused millions of Americans to lose their financial nest eggs. Things are still so bad that the 401K program, for example, has become the subject of cutting jokes by late-night television talk show hosts.

The initial nine banks that received loans under the government’s Troubled Asset Relief Program awarded nearly 4,800 million-dollar-plus bonuses, with much of the money going to Wall Street investment bankers.

A total of $32.6 billion was doled out — this while many working-class families are trying to figure out how to avoid bankruptcy.

“There is no clear rhyme or reason to the way the banks compensate and reward their employees,” said New York Attorney General Andrew Cuomo in revealing the extent of the banks’ avarice.

Cuomo, who has earned the public’s appreciation for blowing the lid off this inexplicable act of sheer insolence, noted that when the banks’ performance deteriorated significantly, “they were bailed out by taxpayers, and their employees were still paid well.”

Bailed out to the tune of $175 billion.

The bonuses were for 2008, when the collapse of the financial institutions occurred, requiring the federal government to step in with TARP.

Subpoenas

The only reason the public has any information about how those who performed poorly were rewarded richly is that Attorney General Cuomo subpoenaed the banks’ 2008 records. We don’t know what went on in prior years because the banks are not required to disclose the information publicly.

As for the argument that not paying out those atrocious bonuses would have caused the employees to bolt, here’s a reality check: With just about all the major financial institutions in the U.S. on the ropes, there was nowhere for these individuals to go. In fact, given their poor performances, why would any other employer want them?

The two leading recipients of taxpayer money, Citigroup Inc. and Bank of America, with $45 billion each, handed out bonuses of $5.3 billion and $3.3 billion. Topping the bonus list was JP Morgan Chase & Co., which distributed $8.7 billion. JP Morgan received $25 billion in TARP funds.

So how could the banks throw money away while they had their hands out for taxpayer dollars? Because TARP did not go into effect until last fall, and before that the institutions embraced an anything-goes philosophy.

Fortunately, those days are now over for the banks that have taken government funds. They will face intense government scrutiny and must comply with restrictions on compensation, including bonuses.

In addition, the compensation of the 100 highest–paid employees at banks and other firms that received the largest government bailouts will be overseen by Kenneth Feinberg, who was appointed to the post last month by President Obama.

The administration is now under the gun to make sure that American taxpayers aren’t forced to witness their money being used to line the pockets of individuals who already are living in a world of make-believe.