Windy this morning. And it seemed like I was running into the wind the entire time — even though I follow essentially a five-mile loop. Is it possible to always be running into the wind? Don’t know. And apparently there are a lot of things I don’t know, or don’t understand, these days.
For instance. We’ve tossed $300 billion (anyone actually counting?) at Wall Street banks and insurance companies in recent weeks. Doesn’t that make the $15 billion we’re getting ready to hand over to the Detroit automakers seem like chump change? And yeah. The money is going to go down a rat hole. But if you are going to nationalize the auto industry you have to start with a down payment. Call it earnest money.
And I agree we have to help the auto industry. Too many jobs on the line — and most of the jobs involve people who actually make something.
Unlike others — John Thain, the CEO of Merrill Lynch, soon to become the ward of Bank of America, comes to mind. Merrill Lynch, according to the Wall Street Journal, is racking up a net loss this year of $11.6 billion. Still, Thain argued that he deserved a bonus of as much as $10 million. Why? He peddled Merrill to Bank of America before the firm went belly up like Lehman Brothers — so you can make the case that he saved jobs and shareholder value.
The difference of opinion between Mr. Thain and directors who hired him just a year ago is part of the bigger debate about compensation practices at Wall Street firms. Many blame Wall Street for fueling the credit crisis that dragged the U.S. economy into recession, and the giant paychecks that are routine at many Wall Street firms have received deepening criticism as the government extends aid to banks and securities firms.
Merrill has suffered net losses of $11.67 billion this year and is about to complete its acquisition by Corp. later this month. On Friday, shareholders of both companies separately approved the deal. Mr. Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, say people familiar with his thinking.
But I wrote yesterday about a new ethic of responsibility. Obama said that on Meet the Press Sunday. It’s an idea that does resonate on Main Street, if not on Wall Street as yet. And I think it will form a template for a lot of the actions and decisions we see in the Obama White House and in executive suites throughout the nation.
Maybe Thain is the first example of this new ethic of responsibility in practice. Merrill’s compensation committee demurred; Thain gets nada. Good.
Here’s from a Wall Street Journal article (online by subscription only):
The compensation committee met for several hours to discuss the issue and some people familiar with the matter say Mr. Thain was initially resistant to the suggestion of taking no bonus. However, a Merrill spokeswoman said Mr. Thain kicked off the meeting by requesting no bonus.
Liar, liar pants on fire. Oh well.
I’ll be looking for more examples of the ethic of responsibility in action. I expect we’ll see plenty in the coming months.
In the meantime, here’s a tune to cheer the Detroit automakers — Bob Seger — Against the Wind. Go ahead. Sing along. It’s your money.