NEW YORK - At University campuses in the US there is a widely circulated anecdote of a super smart law student who after graduation sued the Law School — and recovered his tuition fees. If you are sharp-witted, so the story goes, you can always find a loophole in the law through which you can ride a chariot with five horses - Ben Hur style.
Over the years, slick Wall Street executives, also called "Masters of the Universe" because they were considered brainy, ruled the world of finance, commerce and banking.
The power they exerted entitled them to a self-imposed extravagant life style: corporate jets, overblown salaries and obese bonuses. They claimed they were entitled to these perks because they were smarter and a cut above lesser mortals.
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| US President Barack Obama speaks during a meeting with American CEOs, including Google's Chairman and CEO Eric Schmidt (R), in the Roosevelt Room of the White House in Washington on Wednesday. AFP |
But all that came to an inglorious end — or so we thought — when Wall Street came crashing down with the collapse of the stock market, the spreading US economic recession and the global financial crisis.
A report last week by the New York State comptroller revealed not only the continued greediness of Wall Street executives but also how dumb they were: raking in millions of dollars in bonuses even while they were begging for government financial bailouts to keep their companies afloat while drowning in red ink.
If they thought they could take the government — and the country for a ride — they were plain stupid.
President Barack Obama, who rarely or ever displayed his flashes of anger in public during his election campaign, was outraged at the financial shenanigans in Wall Street. Describing Wall Street excesses as "shameful", Obama said: "There will be time for them to make profits, and there will be time for them to get bonuses. Now's not that time."
Last week, Obama pitched also in to them even more aggressively — and rightly so. "That is the height of irresponsibility. 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."
According to the New York State comptroller, some of the top executives walked off with an estimated $18.4 billion in bonuses last year — even while their companies were laying off staff and losing billions of dollars.
The estimated losses of some of the banks and brokerage companies were over $35 billion last year alone: three times the losses in 2007. The New York State Attorney General is specifically focusing on one Wall Street firm, Merrill Lynch, which paid $4 billion to $5 billion in bonuses to its executives and staff even as the company was facing a major financial crisis.
What is even more troubling is the luxurious life style of some of these head honchos: the chief executive officer of Merrill Lynch apparently renovated his office at a cost of over $1 million with new trappings, including a $87,000 rug, a $35,000 commode, $28,000 curtains, a $16,000 coffee table, a $13,000 chandelier and $87,000 for chairs. After a huge outcry, he has volunteered to pay for it — and not charge the company (as he had originally intended to do).
And last week the Obama administration asked Citibank, one of the biggest multinational bank conglomerates, to cancel its order for an executive corporate jet which was being purchased at a cost of $50 million from a French aircraft manufacturer.
All these excesses have continued despite the fact that the government has been bailing out these companies with the taxpayers' money. As a result of government funding, the US administration has a legitimate and legal right to curb spending and lay down future guidelines.
The Obama administration is working on a set of new rules and regulations making it mandatory for companies receiving taxpayer money to limit their compensations, salaries and bonuses. As more and more banks and investment firms become partially "nationalised", the government will lay down the law even more rigorously.
The toughest new law would be "clawback provisions" that would give the government the legal right to demand executives to return their bonuses working for companies in financial trouble.
Meanwhile, the country's economic situation remains grim. The prognosis is that it will take at least a year or two to recover from the current recession. Last week alone, the number of job cuts and layoffs amounted to over 65,000 — and rising.
The House of Representatives last week voted strictly on party lines — with Democrats voting for, and Republicans voting against — on a $819 billion two-year aid package to help stimulate the economy.
If the recovery is not as speedy as expected, it is very likely that Obama may seek additional funding for a package that could exceed over a whopping trillion dollars. | 
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