The panel on Meet the Press of Erin Burnett, Mark Zandi and Steve Forbes responding to the statements made about Wall Street bonuses by President Obama and Sen. Clair McCaskill. Apparently Erin Burnett thinks the silly populists out there just need the shell game Wall Street played with the bonus money explained to them.
MR. GREGORY: In, in just a couple of minutes left, I want to talk about something about everybody understands, and that is bonuses on Wall Street. And we find out this week from the New York comptroller's office that Wall Street allocated $20 billion in bonus money, the same amount as 2004. It created some pretty strong reaction from the White House to Capitol Hill. Watch.
PRES. OBAMA: It is shameful, and part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. You know, the American people understand that we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up.
SEN. CLAIRE McCASKILL (D-MO): We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer. They don't get it. These people are idiots. You can't use taxpayer money to pay out $18 billion in bonuses. What planet are these people on?
MR. GREGORY: Fair question, Erin?
MS. BURNETT: I understand the outrage, and you understand the populism. There are, though--well, how should we say this? The taxpayer money is not being used to pay the bonuses. I think people could understand if you work for a company--right? If the three us worked for a company, your guests, and I lost $10 billion but Steve over there, he made a billion dollars. So overall the company actually loses money, but Steve went and did his very darndest for that company and he made money. So should he be paid for his work? That's essentially what we're talking about here. And reasonable people could argue about this, but many reasonable people would conclude, yes, he should be paid for that. And I think, David, you've raised a fair point, which is maybe it's the whole use of the word "bonus."
MR. GREGORY: Mm-hmm.
MS. BURNETT: If you explained to people this is how they are compensated, that might make a difference. But there is also a fundamental misunderstanding. The taxpayer money isn't being taken and paid out in the form of bonuses. It goes in a, a separate pool, shall we say, a separate account for banks. So maybe people don't care about that distinction, but it is there.
MR. ZANDI: Well, this, this highlights a very significant risk...
MS. BURNETT: Mm-hmm.
MR. ZANDI: ...of the government coming in and giving this money to the banking system, that we're effectively nationally the system in one form or another. And by doing that, then taxpayers, rightfully so, are saying, "Well, I want some control of what you do with this money." So now we're talking about compensation, which I think is a reasonable thing to do, but it is a slippery slope. And one thing I do worry about is that maybe the next thing is that we start making strictures on what kind of loans they can make or what kinds of deals they can fund or can I, can I fund a bank that's going to produce a factory in, in Mexico? I mean, these are decisions that are very difficult for government to make and can't make wisely.
MR. FORBES: And this gets to the danger of what you might call financial protectionism; that is, a return for these new monies, new capital, banks won't be able to lend overseas, which is a form of protectionism and gets in the way of the system.
MR. GREGORY: But as--does Wall Street need to absorb the fact that if they need lots of taxpayer help, they have to find a way to speak directly to the American people about what they do...
MR. FORBES: Yes.
MR. GREGORY: ...and the importance of what they do, if they want $1 trillion, $2 trillion worth of taxpayer money?
MR. FORBES: Yes. Well, Wall--yes. Wall Street has to learn the golden rule: He who has the money makes the rules. And in Washington, they have the money so they're going to make the rules. Get used to it. You want the help, you pay the price for it. And I think they've been slow in doing that.
MS. BURNETT: The rise in populism, though, has been amazing. I mean, just the rhetoric out of Barack Obama and Joe Biden this week, that they talk--used the word shameful and outrageous to refer to Wall Street practices. You know, and I'm hearing that that's much more they know that they're going to have to bail them out and they don't want to look like they're doing it because they want to, as opposed to a real shift of populism.
MR. GREGORY: All right, we are going to leave it there.