How Wall Street execs turned air into gold -- Brian Dickerson, Detroit Free Press columnist

http://www.freep.com/article/20081219/COL04/812190328/0/BUSINESS01

BRIAN DICKERSON
How Wall Street execs turned air into gold
BY BRIAN DICKERSON • FREE PRESS COLUMNIST • DECEMBER 19, 2008
Read Comments(58) Recommend(5)Print this pageE-mail this articleShare this article:

As the weather outside begins to mimic our wintry mix of economic catastrophe, it's astonishing how many Americans reserve their harshest resentment for domestic autoworkers.

Talk-show hosts rage at overpaid CEOs or snicker at billionaires defrauded by members of their own country clubs.

But nothing sets the booboisie's teeth on edge like the specter of mythic assembly line workers earning $70,000 a year (plus medical benefits, the greedy pigs!) to build cars less fortunate blue-collar workers can no longer afford to buy.

Imagine how this smoldering resentment of Detroiters would explode into flame if every vehicle the Detroit Three produced literally disintegrated within a few months of purchase.

Yet that is exactly what has happened in the financial sector, where tens of thousand of mid-level employees have pocketed billions of dollars in bonuses for profits that have since vanished into thin air.

Stupid money

In a front-page story published Thursday, the New York Times detailed how executives at Merrill Lynch, the troubled financial giant plucked from the precipice of bankruptcy this fall by Bank of America, earned billions of dollars in bonuses on corporate earnings that have long since evaporated.

Traders in their 20s and 30s earned bonuses worth 10, 20 or 100 times more than their six-figure salaries on quarterly results that were somewhere between fleeting and fictitious.

Tens of thousands who invested in Merrill Lynch saw their shares become worthless overnight. But employees who snared seven- and eight-figure bonuses were allowed to keep the money.

The scenario has been repeated over and over in the financial industry, where lavish bonuses are considered such a birthright that banks like Merrill Lynch have been reluctant to suspend them even after garnering billions of dollars in taxpayer-funded bailouts

Is it any wonder that Sen. Carl Levin and Gov. Jennifer Granholm turned purple when some of the same GOP senators who approved the financial industry bailout assailed autoworkers for their greed?

more...