Keep these two thoughts in mind as you read this article:
First, Dr. Robert Hare estimates that 1 percent of people would be diagnosed as psychopaths using his Psychopathy Checklist-Revised. However, Dr. Hare also estimates that 3 percent of corporate executives are psychopaths. That means there are three times as many psychopaths in corner offices than there are in the general population.
Second, you can’t get a psychopath to do anything by appealing to his or her conscience, morals or sense of shame. The only way to possibly influence psychopathic behavior is consequences (and sometimes that doesn’t work either).
Knowing this, I was angry and frustrated to read this story in the paper a few days ago: Pay czar will not fight banks on $1.6B in exec pay.
Remember the financial meltdown? Less than two years ago, the financial system of the United States was on the verge of collapse. To bail out big banks, insurance companies, and a few other gigantic companies, Congress approved $700 billion for the Troubled Asset Relief Program, or TARP, late in 2008. Early in 2009, Congress passed restrictions on executive compensation at companies that received TARP money.
Why? Because while tax dollars were being used to prop up these financial companies, the financial companies turned around and paid more than $2 billion in bonuses to their highest earners.
Nearly 80 percent of that money was unmerited, according to Kenneth R. Feinberg, appointed to investigate the matter as the government’s special master for executive compensation. And what is he going to do about it?
Stuck holding the bag
Here’s how this story was reported on the Huffington Post:
Though acknowledging the massive payouts were “ill-advised” and exhibited “bad judgment” — some bankers were paid more than $10 million, he said — Feinberg refused to rule that any of the massive payouts went against the public interest.
“As a matter of fairness, to label these payments years later as contrary to the public interest, with all the consequences that might roll from that?” Feinberg asked. “No, I don’t think that would be right.”
Asked what consequences could arise from recouping public funds, Feinberg replied:
“The consequences might be lawsuits, private lawsuits — a huge threat if I made that finding. Congress might very well be more willing to intervene if there was such a finding. This might go on. There might be a new chapter. There still might be a new chapter — I don’t know.
“But I’m trying to minimize the likelihood that today’s decision will trigger another round now of investigations and litigation. I’ve tried to strike that balance.”
That balance Feinberg struck means bailed-out bankers get to keep their loot while taxpayers are left holding the bag.
So why didn’t Feinberg go after the guys who took home millions? Apparently, he was afraid of endangering the financial recovery. “Certain aspects of the financial system still confront fragility,” he said, according to the Associated Press. “I’m not looking to compound that fragility beyond what I thought was necessary.”
Shaming the banks
Feinberg thought that publicly shaming the banks was punishment enough. Plus, of the 17 banks that he identified as paying unmerited bonuses, 11 of them had already paid back the TARP money.
Well, if shaming is all that can be done, let’s shame them. Here they are, as identified by the New York Times:
Companies that paid excessive compensation, but have fully repaid their bailout money:
- American Express
- Bank of America
- Bank of New York Mellon
- Boston Private
- Capital One Financial
- Goldman Sachs
- Morgan Stanley
- PNC Financial
- US Bancorp
- Wells Fargo
Companies that paid excessive compensation, but have not yet fully repaid their bailout money:
- CIT Group
- M&T Bank
- Regions Financial
- SunTrust Banks
I don’t know if any of the overpaid executives are psychopaths. But they certainly seem to feel overly entitled to take such huge payouts when their companies were failing and the entire economy was disintegrating. After all, they could have turned down the bonuses.
This scenario is so typical of psychopathic maneuvering. These people managed to back the entire economy into a corner. They got their money, and then, even when society viewed their greed as wrong, even when restitution was justified, the man who could do something decided that going after them was just too risky. Either that, or it’s the good ol’ boys network again.
So the overpaid executives exploit their companies, exploit the taxpayers and exploit the economy, and suffer no consequences.
Sigh. It’s all so dishearteningly familiar.