Apparently there is great confusion on Wall Street about just exactly what is “socialism” and “capitalism”. For example, several papers are reporting (ex: NYTimes), that many Wall St executives and employees are complaining that their bonuses are being criticized. For example, this from the NYTimes Friday:
“I think President Obama painted everyone with a broad stroke,” said Brian McCaffrey, 55, a Wall Street lawyer who was on his way to see a client. “The way we pay our taxes is bonuses. The only way that we’ll get any of our bailout money back is from taxes on bonuses. I think bonuses should be looked at on a case by case basis, or you turn into a socialist.”
That, indeed, was a recurring equation: Broad strokes + bonuses = socialist.
“It’s a very slippery slope to go down,” said another insurance broker as he waited to be seated for lunch at Cipriani Downtown. “A blanket statement like that borders on” — you guessed it — “socialism.”
Umm, guys, “capitalism” does not mean “I am entitled to a large bonus because I work hard”. If it did, we would have lots of rich garbage collectors. Nor is it “socialism” to be criticized for a bonus – especially when taxpayers had to rescue your employer.
The confusion is even deeper here. These Wall St folks are actually correct in that there’s a bit of “socialism” involved on Wall Street these days, but it’s not the bonuses. Instead, the “socialism” is in the form of lemon socialism or what’s called socialism for the rich. If we truly had pure “capitalism”, then most of these employees of Wall Street firms would actually now be properly called ex-employees since their employer would have failed and gone bankrupt by now. Instead, their employers exist solely because the taxpayers (through the US Dept of Treasury and The Federal Reserve) have bailed them out. A social decision was made by the govt that it was in the collective interest to not have these Wall St firms receive the consequence of their failed business models and bad business decisions. Any employee of a Wall St firm that truly wishes to avoid being part of “socialism” should do the truly capitalist thing: accept the consequences of their failed employer, quit, join the unemployment line, and find a new job with what might be a better employer.
There is one other bit of confusion evident in these stories. Many of the execs and employees of Wall St firms offer the explanation of why their bonus is deserving claim that they made money in the division/group/subsidiary/office where they work, and that the losses were due to others in the firm elsewhere. Sorry guys, this logic fails too. You aren’t capitalists. You are employees. You are labor. Granted you are over-paid labor, but labor nonetheless. The firm is the entity. You are only part of the team. I suppose by their logic we should award Superbowl rings to any wide receiver that catches a pass for the losing team. Nope. If these folks don’t like the idea of not getting paid bonus when the firm doesn’t make money, they have a capitalist alternative: quit and start their own firm. Ahh, but the truth is they don’t have the resources or willingness to take risks that that would entail. Truth is they aren’t capitalists at all and don’t want to be. They just want to manipulate the system.