Bonus Backlash

Interview

Date: 03/18/2009

The firestorm continued to rage over what Senator Bernie Sanders, in an interview Wednesday on WTSA Radio, called "vulgar" and "reprehensible" bonuses for executives at American International Group. The beleaguered insurance giant that dragged the economy into a deep recession isn't the only bailed out business doling out bonuses. Fannie Mae reportedly plans to pay as much as $611,000 this year to some executives despite enormous losses at the government-backed mortgage company. In a Senate floor speech, Sanders renewed his call for capping the pay of executives of bailed out banks and financial institutions at no more than the president of the United States is paid.

"The President is paid $400,000 a year," Sanders said. "It seems to me that when taxpayers are spending hundreds of billions of dollars bailing out large Wall Street firms, we should make it very clear that none of their executives should be entitled to earn more than the president of the United States. They can, in fact, get by. I know it will be hard, but I expect they can survive on $400,000 a year when the taxpayers of this country are bailing them out."

Sanders also has called for an investigation into what went wrong on Wall Street and major reform and re-regulation of the financial services industry.

"We need to move to a new concept of what Wall Street should be doing. Bankers historically in our country and in the world play a very important role in providing credit to businesses that then create jobs, providing credit to individuals who can purchase homes and other necessities. That is what bankers historically have done. But over the last number of years, what Wall Street has become is not a place where responsible loans are made but a gambling hall where these guys have made huge sums of money in very risky investments that have failed. The taxpayers are now bailing them out.

"We need to rethink the function of Wall Street. I would hope business schools will be educating financiers and business people to take the position that their job is to help this country, help create decent-paying jobs, help people get the homes they need, help people get the loans responsibly that they should have. That is a radical idea, I know. But I would hope we can move toward a Wall Street which has those values.

Source