ONLY FOOLS THOUGHT THEY WOULD CHANGE - AT 8:04 A.M. ET:  During the big financial bailouts, late last year, and early this year, some starry-eyed Washington types predicted that the culture of Wall Street would change.  We wrote at the time that this was a childlike view of the world, that the culture of Wall Street never changes.  Even the great Depression didn't change it.  Wall Street is about money, and only money, and lots of it.  Most people don't dream of big jobs on Wall Street to exercise financial restraint or responsibility:

NEW YORK, July 22 -- Wall Street's biggest banks are setting aside billions of dollars more to pay their executives and other employees just months after these firms were rescued with a taxpayer bailout, renewing questions about compensation practices in the aftermath of the financial crisis.

The recent outcry over bonuses at bailed-out firms prompted public alarm and promises of reform from financial leaders, who acknowledged that pay and bonuses should not reward risky short-term business decisions -- such as those that contributed to the meltdown -- but instead longer-term financial performance.

Felix Rohatyn, one of the true statesmen of Wall Street, once described the stock market as a casino. 

Goldman Sachs caused a stir last week when it disclosed it had set aside a record $6.6 billion for compensation expenses in the most recent quarter, bringing the total for the first six months of the year to $11.4 billion. If that pace continues for the rest of the year, Goldman's employees will earn an average of about $773,000, more than double the figure last year and even exceeding the $700,000 paid in 2007.

COMMENT:  There are some who defend those practices as part of the "free enterprise system."  I don't.  Many of the "executive compensation packages," as we've seen in the last few years, seem to be based more on who you know, or how fast you talk, than on real performance.  And many of Wall Street's "investment products" seem to produce results only for the investment bank, and not for the real economy.

Wall Street is actually doing reasonably well right now.  But remember that there was a stock market rally between 1933 and 1936, at the height of the Depression.  It had no effect on the real, Main Street economy.

The Wall Street firms that failed in the last few years clearly weren't run by financial geniuses, or business visionaries.  They were run by hustlers, and, sadly, they will be again.

July 23, 2009