Right or wrong, there's no denying the fact that many Americans think that people who work on Wall Street are paid too much. While this view was certainly present before the bailouts, it has bubbled up to the forefront of popular opinion since then. Those of the view that bonuses should be capped or restricted argue that even banks who have paid back the government benefited from the government's actions. This is certainly true, but a lot of companies outside of the financial sector also took government assistance or regularly benefit from government programs. In these cases, there is little outrage towards pay. Professional athletes make salaries on par or greater than the top bankers, and they play in stadiums that are largely financed by higher sales taxes or through the issuance of tax-free municipal bonds. And just last week, NBC paid Conan O'Brien over $30 million to walk away and take the Summer off, even though NBC's parent company took advantage of the government's TLGP (Temporary Liquidity Guarantee Program) and issued over $60 billion in government guaranteed commercial paper.
As we all learned during the Financial crisis, however, it is important to remember the law of unintended consequences. Actions or words that look good at face value could end up with results that run counter to your original intent. While Wall Street bonuses have been labeled "obscene," all the rhetoric against the banks actually has the potential to benefit some bankers, making their potential paydays even more "obscene." For example, a Bloomberg story this morning reported that the stock-based portion of bonuses for employees at Goldman Sachs (GS) was priced on Friday when the stock closed at a six-month low and had its worst two-day decline since the March lows. As a result of the decline in Goldman's stock, though, an employee getting a bonus of $1 million in stock received 6,488 shares, which was 436 more shares than they would have received one week earlier.
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