I saw the Johnny Depp movie "Public Enemy" about John Dillinger just days after learning that the average wage this year at Goldman Sachs will be $700,000. What made Dillinger a popular folk hero during the height of the Great Depression was that he robbed what people thought of as the culprit causing the nation's malaise.
Nobody today would think that robbing banks would be a good idea, but it sure makes sense to do a better job of controlling them until every speck of government money is repaid with interest.
With respect to Goldman Sachs, they may have repaid the $6 billion we lent them to keep them afloat, but they have not paid a cent of the $18 billion they effectively received from AIG to insure their ridiculous bets. No one can explain to me why that money has just dropped into a black hole. We're pretending that a bankrupt AIG is the only party we can turn to for getting our government money back.
To me, it's no different from the "claw-back" provisions that will plague Bernie Madoff investors who took their profits out at the expense of others. Until Goldman pays the government the entire $18 billion of AIG money that reputedly disappeared into the Goldman maw, it would appear to me that those $700,000 average annual salaries should be more like $100,000 - or less. This is a huge rip-off of public money.
If we taxpayers had not made that money available to all the banks that were benefiting from AIG's insurance, they would all be history today. Why are we pretending that the bank's obligation ends with the amount we loaned them directly?
As financial writer and former bond trader Michael Lewis writes in Vanity Fair magazine, it has been a full year and nobody from the government has bothered to go to Connecticut yet to ferret out the workings of AIG trading department that threatened the world financial system.
All we know is that we loaned them a huge amount of money primarily to protect the institutions that had benefited from the AIG charade. AIG is history. Liquidating what's left will never make up for $187 billion we are owed. We need a Melvin Purvis (the FBI agent that tracked down and killed Dillinger) to go to Connecticut and claw back that money from firms that were saved by our tax dollars.
Meanwhile, lurking right in the administration is a nest of investment bank sympathizers. We can start with administration official Larry Summers, who gamely tried to make the case that paying secret bonuses to AIG executives was acceptable because "we were contractually obligated."
Apparently no legal mind was handy to tell him that there are all sorts of legal options for breaking contracts under extenuating circumstances - such as a collapse of the world financial system. A recent New York Times editorial, "Sharks Circle in Congress" pointed out the dismal failure of regulators to apply the laws they had at their disposal. These are the people testifying to the effect that current regulatory bodies are just fine.
Those of us saving for retirement deserve better treatment and more protection. We need an army of Melvin Purvis types who are true public servants. No misplaced hero worship should be lost on today's John Dillingers, because that's our money in the financial system they are looting.