Obama Hurt Bankers' Feelings, And They're Angry
If the president wants bankers to accept the billions of taxpayer dollars they need, he's going to have to accept their outrageous demands, like bonuses forever. Wait, what?
American bankers are sitting on trillions of dollars in troubled mortgage securities they can't sell without admitting their banks are nearly worthless. So they need billions of fresh dollars from the government.
But the government has been trying to take away their precious bonuses, as if they're not excellent at running banks. So the bankers are being dicks, to the president. According to the Wall Street Journal:
When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation...
The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.
To summarize, the banks are offering this tremendous bargain: Before they will accept billions from the government, for free, they demand their bonuses remain untouched. If the government doesn't give into these demands, the bankers claim they will go to — seriously, this is what they claim — hedge funds and private equity groups for the money they need.
Private equity and hedge funds are in the same pit as banks because — hello? — they borrowed their leverage from banks. They are desperately salivating over Obama's bailout plan, because they'll finally have a sugar daddy again.
But the bankers apparently figure their bluff will never be called. The government clearly isn't going to let them fail, and it's not like we're about to nationalize the banks and fire all these executives, because who better to get our economy out of this mess than the geniuses who got us into it? (Our Treasury Secretary certainly doesn't know!)