Scanning the morning papers, it's clear that Wall Street firms are long arrogance and short humility. (New York Times: "$3.4 Billion Profit at Goldman Revives Gilded Pay Options," Wall Street Journal:"Loan Paid, J.P. Morgan Swagger Returns," Financial Times: "Goldman staff set for record pay-outs"
My friends at these institutions know that the public isn't pleased with huge compensation packages, but continue to ask me two questions: (1) "Don't they want us to succeed?" and (2) "Doesn't the public know that we didn't really need the TARP money-they forced us to take it!" (Note that these guys don't really know anyone in "the public" so they have to ask me!)
Yes, we want you to succeed and we know that not all of the TARP recipients were on the precipice of disaster or imminent collapse. That said, it's distasteful that you attribute your success only to your superior trading and management prowess, when any objective observer would plainly see that had the government not swooped in and saved the entire system, you would not be talking about profits of any size.
While the survivors on Wall Street should be pleased with their results, there is no need to parade around like proud (but clueless) peacocks. This is distasteful any time, but even more so when the recession has inflicted so much pain on Americans.
It's hard for us here in the public to admire the recovery in earnings when these organizations could not have done it without us (see my colleague's take "Goldman Sachs Profit: $3.4 Billion, With Taxpayer Help")
So here's a suggestion for firms that were direct beneficiaries of Uncle Sam's largesse--start your earnings announcements with the following two sentences:
Before getting into the numbers, we must acknowledge that without US taxpayer money, both directly and throughout the entire financial system, our results could not have possibly been this good. We still have a lot of work to do, but just want to say thank you for all of the folks who never heard of a credit default swap or a sub-prime mortgage.Humility won't eradicate years of arrogance, but along with some much-needed regulatory reform, it would go a long way to help all of us move beyond this painful period.
Image by Flickr User Jaroslaw Pocztarski, cc 2.0