This month’s Vanity Fair magazine was devoted to money – specifically those who benefited from the financial fallout and where they are now. How’s all that financial reform coming?
WAMU’s Diane Rehm spoke with journalist Michael Lewis, author of The Big Short and a Vanity Fair contributor, who wrote about bankers who earned huge windfalls from lofty investments during the recession.
Lewis told an audience last week:
“I was walking into a story that was very heavy, and in explaining the financial crisis, I was going to have readers wading through stuff that they wouldn’t really understand,” Lewis said. “There were a handful of people who had foreseen the crisis coming. It was a very small universe. They didn’t know each other. I tried to meet every one of them … Then I picked people from this universe who could tell the story.
At the major banks, cutting salaries was the public-facing way of showing that living off the financial woes of the rest of the country was going to have to change. Marketplace reports that while executive salaries at the major banks were cut by about 15 percent this year, that hasn’t been steep enough to force the people who were benefiting the most from shady deals out of those jobs.
Namely that about 85 percent of the individuals who had their pay set are still at their desk working for these very five same companies. This is strong evidence that the pay determinations are not resulting in some sort of brain drain from these companies.
To Wall Street’s chagrin, the Obama administration is looking at Elizabeth Warren, a Harvard bankruptcy expert and critic of the financial industry to head a new consumer protection agency.
The Senate Finance Committee is also responding to fears about soaring executive pay and irresponsible lending (by analyzing how banks and the risk they assume are regulated. NewsHour reports on the GOP side of that debate.
Sen. Richard Shelby, R-Ala: “…we’re all consumers. We don’t want anybody exploited in this country. Some — the states regulate a lot of things today. Will the federal government regulate them in the future? We’re not sure yet. But the main thing is to create a level playing field for all consumers.”
Despite regulation efforts, there’s still a lot of resentment out there. EconomyBeat.org shares a messy sentiment – literally a pile of dirt left in the lobby of major bank JP Morgan Chase – from the blog I Ought to be Working.