When Santa came to Wall Street this year, the media cried and pouted.
With the Dow Jones Industrial Average at an all-time high and commodities markets experiencing one of their best years in decades, Wall Street firms were feeling especially merry this year. The media responded as if they had seen Jacob Marley’s ghost.
NBC’s John Seigenthaler gloomily downplayed Wall Streeters’ good fortunes by stating: “Most U.S. businesses – 66 percent – give no bonuses at all.” ABC’s Nancy Cordes quipped, “You could feed 700,000 children for a year” with what the top earner at Goldman Sachs received.
The Washington Post was concerned that these bonuses were “another reminder of the ever-widening gap between the super-rich and everyone else.” And, the Boston Globe worried that what was being lavished on Wall Street types was “more than three times the average salary of a Massachusetts surgeon.”
Amid all the squabbling was a convenient amnesia about how pleased the press were about these bonuses the final Christmas season of the ’90s, right before the NASDAQ peaked and the three-year bear market in stocks began.
NBC’s Pat Dawson said on the Dec. 22, 1999, “Nightly News,” “Wall Street's billions in profit means a Big Apple boom.” CBS’s Anthony Mason interviewed a Manhattan business owner on the Dec. 11, 1999, “Evening News” who was celebrating the announcements of the leading brokerage firms: “Thank God Wall Street's having a good year.”
It’s Beginning to Look a Lot Like Coveting
Evoking envy is certainly not a new affectation for the media. In fact, the class warfare card is regularly played throughout the year. However, this Christmas journalists have displayed Ebenezer Scrooge-like disgust, finding it unimaginable that people should be paid large bonuses.
The worst offender was certainly NBC. On the December 16 “Nightly News,” anchor John Seigenthaler drearily stated: “Most U.S. businesses – 66 percent – give no bonuses at all. Those employees lucky enough to receive a cash gift will get an average of $837. Compare that to the bonuses Goldman Sachs gives out, a jackpot so big they could give every employee more than $600,000.”
Mike Taibbi’s report followed, and he later expanded on the divide between rich and poor: "But to many, today's version of the haves and have-nots feels different. In the boom of the Clinton years – and I'm talking a chronological, not a political distinction – the rising tide of that bull market truly did lift all boats, or at least a whole lot more of them."
After interviewing a finance assistant who was “[living] paycheck by paycheck just to pay for mortgages, gas, electric, everything,” Taibbi added: “Working Americans now pay more of their pension and health care costs; and food, fuel and service costs have risen faster than most salaries. That means even those who do get small bonuses still struggle."
In second place for this year’s Scrooge award was The Washington Post, which published a business briefing on December 17 with a concluding paragraph that could have been uttered by the Grinch himself:
Still, news of Wall Street's Very, Very Good Year is likely to stir some resentment on Main Street – not because the economy is so bad as much as it is yet another reminder of the ever-widening gap between the super-rich and everyone else. Are those pay packages really a reflection of the Wall Streeters' superior skill, training and ingenuity? Or are they a reflection of the lack of price competition in an industry that is allowed to earn monopoly-like fees and profit? Or could it be that the new barons of finance are merely the beneficiaries of some old-fashioned dumb luck.
The Boston Globe also seemed to be lacking the free-market Christmas spirit when it published an article on December 13 stating the bonuses given out by Goldman Sachs this year were “more than three times the average salary of a Massachusetts surgeon; four times that of a Massachusetts chief executive; and nearly 12 times that of a Massachusetts high school teacher, according to the state's Department of Workforce Development.”
The Globe’s Robert Gavin continued: “Still, these outsized earnings renewed concerns about the growing gap between rich and poor in the United States, and whether the benefits of the economic expansion are getting distributed equitably. The payday also renewed questions about the value society places on different kinds of work.”
But pay doesn’t depend on the value society as a whole places on work – it depends on what individual professions deem valuable. Professional athletes are but one example, clearly making more than police, firemen or doctors. While journalists worry about economic benefits getting “distributed equally,” they haven’t reported on the millions pulled in – or any charitable “distribution” doled out – by some of their own.
“News anchors are paid stratospheric salaries,” reported the New York Daily News on April 5, 2006. Salaries reported in the article included Katie Couric, $15 million; Diane Sawyer, $13 million; Charles Gibson (who has since been promoted), $7 million; and Brian Williams, $4 million.
But Maybe It’s Ok if They Earned It …
CNN took a different approach on its December 16 “In the Money” – acknowledging that bonuses could be tied to actual work. “Headline News” correspondent Jennifer Westhoven introduced the president of a recruitment firm by stating: “It's just the holiday bonus that's disappearing, right? We're not talking about performance bonuses, which actually seem to be on the rise.” Her guest agreed, “The holiday bonus is disappearing and certainly the performance bonus is taking its place.”
CNN correspondent Christine Romans then interjected another point lost on the envious: “I think a lot of those people are getting those big bonuses worked like a 100 hours a week.”
Romans elaborated on this theme: “In a weird way the bonuses are little more justifiable than maybe a holiday bonus that is just because you have worked there for a year. Because those bonuses are tied to how well you did for the firm.”
Ignoring Christmases Past
The press seemed to miss how jubilant they were during the 1999 Christmas season before that bull market came to an unhappy end. In particular, the “NBC Nightly News” – quite dour in 2006 – was marvelously merry on Dec. 22, 1999. Correspondent Pat Dawson even stated that Wall Street was responsible for saving New York’s economy: “In fact, so much money is being made here, it's turned around the fortunes of this entire city. A few years back, New York was in a tailspin; then the bulls started running. Now, Wall Street's billions in profit means a Big Apple boom.”
The Dec. 11, 1999, “CBS Evening News” also saw the upside to brokerage firm bonuses as Anthony Mason interviewed an absolutely joyous business owner who proclaimed: “Thank God Wall Street's having a good year. We – we have more parties this year than we've ever had before.”
Certainly, the tone has changed in seven years. However, despite forgetting the past, there is something far more unfortunate about the Christmas bonus reporting this year: given how the nation suffered during the three-year stock bear market that mercifully ended in March 2003, Main Street should always be merry when Wall Street is doing well.