Once upon a time not so long ago Wachovia Bank, a hundred-year-old bank, was as solid as the rock of Gibraltar. What went wrong? It’s a tale of miscalculations and mistakes – by its own managers.
As a result investors have seen their shares plummet and the bank put on the auction block not once, but twice and, last Monday, the newspaper reported the most amazing news of all. When the merger with Wells Fargo is complete ten of Wachovia’s top executives are going to walk away with $98 million in bonuses.
That even beats the presidents of GM and Chrysler telling the government it should bail them out with $25 billion and let them keep their $15 and $20 million salaries – both.
Looked at one way the affliction rocking American capitalism looks like incompetence. But I’ve begun to suspect it may go deeper. Wachovia’s executives waltzing away with a pot of gold while shareholders are left holding the bag looks like an example of greed run amuck.
No doubt Obama and the Democrats are ready to apply the antidote with a stack of new federal regulations. And there’s surely a risk in the long run the cure may prove as harmful as the disease. But, on the other hand, who can argue that the Wall Street Masters of the Universe don’t deserve whatever the Democrats do to them?
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