A bonus that pays off
I’ve never been one to overstate things, and I certainly don’t like to brag. But I believe I’ve devised a plan that will quell the entire controversy over Wall Street bonuses, help some of the hardest working people of Massachusetts, and earn me a Nobel Prize. Please read on.
By some estimates, Wall Street bonuses will top $40 billion this year. That’s $40 billion paid out to bankers who, just a couple of years ago, were leading the nation to the brink of disaster by taking absolutely ridiculous risks in the name of enormous profits. When their stupidity caught up with them, you and I, in the form of the US government, had to bail out their sorry backsides.
They are a group that knows no shame. For all of the billions we loaned the banks, the banks won’t loan to deserving people and businesses that need it. Our economy, once drunk on easy money, is now starved for credit.
The bankers don’t care. They believe that since they’ve paid the government back, with interest, they are free to return to their gluttonous ways. Hilariously, they argue these bonuses are needed to retain talent - the same talent that led them to disaster. Just as hilariously, many argue that bonuses lead to the kind of consumer spending that will drive the economy.
The only lesson they’ve apparently learned is that they have some catching up to do in terms of their bank accounts.
This is lunacy, of course, and my proposal lets it continue - but for a price.
The plan goes as follows: The bankers give themselves anything they want in terms of bonuses - whether $50 million for the CEO or a million for the flunky down the ladder. I’ll even eliminate the pay czar and any talk of targeted taxes on Wall Street bonuses.
But these bonuses are allowed only every other year. During the odd years, banks are required to take the bonus pool from the prior year, put it in a fund, and have it dispersed to a deserving occupation outside of the financial industry.
For instance, if Wall Street gets $40 billion in bonuses this year, America’s teachers get $40 billion in bonuses next year, courtesy of Wall Street. The federal Bureau of Labor Statistics estimates there are 3.5 million teachers in the country, which would mean a bonus of $11,428 apiece. If bankers don’t want to give to anyone else, then don’t stuff their own snouts.
Massachusetts Secretary of Education Paul Reville is one of the nation’s sharpest educators, so when he heard my plan yesterday, he did me one better. Rather than across-the-board teacher bonuses, he floated the idea of creating incentives for the best teachers to work in the worst performing schools, often in inner cities.
“We often have the least experienced teachers serving the neediest students,’’ Reville said. “That should be turned on its head.’’
The solution: One-time, $100,000 bonuses to experienced, quality teachers who make a five-year commitment to go from, say, Newton to Boston.
You say Republicans in Congress won’t approve? They will when we designate the 1.2 million active members of the military as the bonus recipients in the second round - giving them $33,333 apiece. Do congressmen really want to defend their vote to reward pasty-faced bankers at the expense of young men and women fighting our wars?
When it’s not soldiers and sailors, it could be nurses and social workers, farmers and fishermen - the money spread across the country.
I ran my idea past James Post, a very respected professor of business at Boston University. “Why is it that it’s not only justifiable but widely acceptable in the industry to pay these kinds of bonuses,’’ he said, “but we don’t have anything even remotely comparable for people who work in even more vital fields, like health care?’’
But then Post added: “It’s a practical proposal, which everyone will reject for a lot of reasons.’’
Brian McGrory is a Globe columnist. His e-mail is email@example.com.