Friday, January 30, 2009
I’ve been documenting the excesses of Proxyland for - OMG! - three years now. Yet when my son, watching CNN with genuine bewilderment, asked me how bailed-out companies could think it’s OK to buy new jets, redecorate their offices, and so forth, I didn’t know what to say.
Actually, I had an answer, but I was afraid he’d think it was lame. Maybe you will, too, but here it is.
It’s long been clear to me that Proxyland is a special place, governed by its own set of mores. To those living within its boundaries, its extravagant customs have come to seem normal and its huge payouts well-deserved. While this mindset is by no means limited to Wall Street (remember Home Depot?), it's most pronounced there.
I’m not a shrink, but I believe this is a psychological phenomenon. A very real one. You might call it mass self-serving self-delusion. (This insular mentality also fueled the subprime phenomenon, in which Wall Street hawked garbage-in-gold-out securitized products and rating agencies gave them a hearty thumbs-up.)
Now, so much taxpayer money has poured into Proxyland that its walls have been breached. Average folks, many of whom didn’t know the place existed, are poking their heads in and looking around with astonishment and disgust. As David Pitofsky and Matthew Tulchin said in an excellent law.com article this week, “the debate over executive pay has fundamentally changed from a shareholders' issue to a taxpayers' issue.”
That's a big change. Between the growing horde of torch-wielding citizens and the broad powers Tim Geithner has to restructure compensation under the TARP - should he choose to use them - it's possible real change could come to compensation practices in Proxyland. (Reports from Davos say the “bonus culture” may be on its way out elsewhere, too. )
On top of all that, Joe Biden wants to throw Wall Street bonus-payers "in the brig."
In honor of this possibility, let's revisit Beyonce's recent rendition of "At Last".
Image source: people.com