The irony was inescapable.
After watching the NCAA Tournament selection show–an annual ritual–I was curious to see what Fed Chairman Ben Bernanke had to say about the economy on “60 Minutes.”
I will now be even more curious to see how markets react to Bernanke’s prediction that the recession will end this year and recovery will begin next year. This was punctuated at the end of the interview by a monologue of Bernanke proclaiming the resiliency of the American economy over the long haul.
In between segments of the interview, CBS dropped in with its brief “Money Watch” segment mentioning the latest exorbitant rewards for failure, otherwise known as AIG bonuses. In the second half of the pre-recorded interview Bernanke remarked how Wall Street needs to clean up its image by not doing business as usual.
It would have been impossible to plan a better segue.
In an editorial today, USA Today correctly states that AIG has played the government for fools, confident the feds won’t risk losing in court if they try to yank the rug out from under the bonuses.
Also, we’ve heard a lot of concern about how banking regulations are outdated and need to be updated. That may be true, but the changes that need to happen to prevent this arrogance to perpetuate itself are cultural. Not necessarily a sweeping change that will affect everyone instantaneously, but a change of honest self-evaluation.
I tend to look at this from a parental perspective. If my oldest son only mows only half the lawn and ignores assigned chores to vacuum the living room and clean the litter box, I’m not going to say, “Sure, here’s $20, have a good time at the movies.”
You don’t pay, at least not willingly, for poor work. That attitude reflected in the doling out of the “retention” payments is perhaps the most distressing of all.