Given How Badly They've Done, I'd Think He'd Want Them to Leave

The consequences of it are going to be a massive brain drain of senior talent from those companies that have taken TARP money to those companies that have not. ~ Donald Straszheim

The wailing, the gnashing of teeth, the rending of clothing (a $5,000 pinstriped Domenico Vacca) has begun. No one, we are being told, can live on a measly $400,000 a year. I see visions of Wall Street bankers burning their Louis XV side chairs ($2,300) for heat while dining on day-old caviar and drinking Nevada Brut champagne.

These titans of investing, we are told, will go elsewhere if they are not paid obscene amounts of money. As if Burger King would hire as a day manager some snot-nosed 20-something who so completely fucked up his previous job that Wells Fargo, for example, a bank that survived the Great Depression, is only staying afloat now because of massive government support.

Most investment bankers are just overrated salesmen, little different than the guy down at the used car lot wearing a white belt. As this rather frightening blog points out, there is little experience or education required to be an investment banker ("personality fit rates higher than technical skills"). The overriding requirement is unbridled, ruthless greed unchecked by anything resembling moral fiber.

It will be an interesting experiment. I suspect that TARP banks will outperform banks burdened by extremely expensive executive bonuses that suck up half of all income. The waste of the bonuses will exceed any potential gain through expertise.