President Obama charged Wall Street with the truth yesterday.
From Wire reports:
President Barack Obama fired a warning shot at Wall Street on Thursday, branding bankers “shameful” for giving themselves $18.4 billion in bonuses last year as the economy was spinning out of control and the government was spending billions to bail out many of the nation’s most prominent financial firms.
Speaking from the Oval Office with Treasury Secretary Timothy Geithner by his side, Obama lashed out at the industry over a report by New York State Comptroller Thomas DiNapoli. The bonus pool for New York City financial companies was the sixth-largest ever amid record losses in the securities industry, the report said, although the 2008 figure was down 44 percent from the year before.
It was unclear if banks had used taxpayer money for bonuses, DiNapoli said.
Obama’s remarks were a pointed and unusual flash of anger – if a premeditated one – and suggested that he intended to use his platform to take a hard line against excesses in executive compensation.
“That is the height of irresponsibility,” Obama said angrily. “It is shameful, and part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.
“The American people understand that we’ve got a big hole that we’ve got to dig ourselves out of, but they don’t like the idea that people are digging a bigger hole even as they’re being asked to fill it up,” Obama said, adding that “there will be time for them to make profits and there will be time for them to make bonuses. Now is not that time.”
News of the report, and Obama’s remarks, came a day after the president met privately at the White House with business leaders, including Richard Parsons, the new chairman of the board of Citigroup.
This week, Citigroup, which received an infusion of taxpayer money last year, canceled its plans, at the administration’s urging, to buy a $50 million business jet.
Obama did not spare the company in his remarks on Thursday, although he did not mention Citi by name.
“Secretary Geithner already had to pull back on one institution that had gone forward with a multimillion-dollar plane it purchased at the same time as they are receiving TARP money,” he said, using the acronym for the government’s $700 billion Troubled Assets Relief Program, intended to rescue shaky financial firms. “We shouldn’t have to do that, because they should know better.”
DiNapoli’s report was compiled based on the annual December-January bonus season, mostly through personal income tax collections
“The issue of transparency is a significant one,” he said, “and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else.”
It’s about time someone hold people who take advantage of the system’s feet to the fire.