DISGRACE

Posted at 7:51 p.m. ET

No one could accuse Investor's Business Daily of being anti-business.  It is a symbol of pro-business journalism.  So, when IBD goes after businessmen, it's a story.

In a superb editorial, IBD does just that - going after the phonies in business who pay, or are paid, ridiculous "bonuses" for results not achieved or goals not met.  We have said here at UA for months that this is a major scandal within capitalism, and the people who created this scandal seem to have learned nothing, which is usually the case.  There is a corrupt culture in part of American industry, and it must be rooted out.  We who believe in free enterprise should be in the lead.  IBD:

In any real crisis, everyone sacrifices to weather the storm. But the panicky $700 billion bailout that Congress approved for 116 banks in the fall shows an entirely different sense of urgency.

On Sunday, the Associated Press found that $1.6 billion of bailout cash was converted to gravy for 600 bankers. They got bonuses, club dues, financial planners, corporate jet travel, daily limousines and home security systems, courtesy of the taxpayers.

This is a bad sign of what's ahead if failure continues to be rewarded and government keeps propping up uncompetitive companies and industries in crisis.

Well said, and not a moment too soon.

It's obvious these banker bonuses had no correlation to productivity or performance. In the real world, enterprises provide such benefits only when executives produce results — that is, profits.

And there are examples of sound practices.  For example:

On Monday, for example, executives of Caterpillar gave up compensation to ensure that their firm would survive. The banks — especially investment banks — seem to play by different rules.

They certainly do.  I've lived in towns where the investment bankers congregate.  It's a different, often amoral culture, one most Americans wouldn't recognize. Some of them don't make money the old fashioned way, to put it mildly.

AP asked 21 bank spokesmen how their companies were spending their taxpayer money and got only evasive answers. Goldman Sachs told AP it needed to retain and motivate its talent to ensure its "continued success," not mentioning where this talent is threatening to migrate in a global and industry downturn.

The nerve of them.  Unbelievable, isn't it?

To take bailout money, even a mere $1.6 billion, and blow it on bonuses is a violation of the public trust.

It is good to see a business publication writing about the public trust.  For too many years we've put up with the argument that we must never question "the market," even when that market is distorted by corrupt or inferior practices.  No, we can question.  It's our responsibility.

Maybe Goldman's $600,000 earners can make do on the $400,000 salary of a U.S. president or the $200,000 salary of a senator to show some sort of leadership. At a time like this, they should be marshaling all their resources to invest in viable growth.

Sadly, they probably won't.  It's their culture, the culture of grab fast, grab big, grab often, and make sure you have the right golfing partners.  Their lives revolve only around money, and around no other value. 

There are some wonderful people on Wall Street, like Felix Rohatyn, who earned his considerable keep and served society.  But, sadly, their number seems small these days.  We have some rethinking to do, and IBD has helped us do it.

December 23, 2008.