As Wall Street begins to hand out billions in bonuses and the White House considers placing huge fees on the nation's biggest banks, one executive says he's weary of the blame game.
"I am a little tired of the constant vilification of these people," JPMorgan Chase CEO Jamie Dimon said Monday at a health care conference. "This is not a casino."
Dimon may not be the only one with this reaction. Andrew Ross Sorkin, New York Times columnist and the author of "Too Big to Fail," said that Wall Street executives were "completely blindsided" by the news of $120 billion in potential fees in the Obama administration's February budget and will likely fight it.
"There was a lack of appreciation that the White House could even contemplate doing something like this," Sorkin told "Good Morning America" anchor George Stephanopoulos today. "And now I think there are real questions about what does this fee mean? How does it get assessed?"
The fee would likely come in the form of a special levy on the biggest financial institutions and would be designed to help recoup the losses resulting from the Troubled Asset Relief Program.
Administration sources told Stephanopoulos that the fees would not be a tax on bonuses and could instead be based on an assessment of the amount of liability taken on by the banks, but Sorkin said even if the fees don't target compensation, "I think the banks will still fight it."
"There's $120 billion that the Treasury is probably going to lose on TARP, effectively," he said. But from the Wall Street perspective, "most of that loss is coming from the automakers and AIG. Why are we going to pay it?"
The public and Wall Street are on different pages, Sorkin said, adding that Dimon and other executives he spoke with "are saying we paid back the money, we paid it back with interest. They don't know what to do."
Scott Talbott, chief lobbyist for the Financial Services Roundtable, a business lobbying group, said, "We are opposed to the possible levy. It will decrease a bank's ability to lend, thereby stifling the economic recovery. The TARP law doesn't trigger a possible repayment for another four years. Any levy now would be premature. TARP paid out $205 billion and $125 billion has been repaid with 8 percent return. When you combine the proposed levy of $120 billion and the $150 billion assessment for the House-passed proposed resolution fund, the government is collecting more taxes than was paid out under TARP."
Bonus season is swinging into high gear, and at a time when unemployment is still pushing 10 percent and millions of Americans are still struggling to pay mortgages, anger is running as high as the profits.
When the numbers start to roll out officially, analysts expect Goldman Sachs to announce a record profit and to pass out more than $10 billion in bonuses.
The profits at that firm are so vast, the bonuses are likely to hit tens of millions of dollars for the top performers. In 2007, CEO Lloyd Blankfein received $68 million and some secretaries got $200,000.
This year, the average is an estimated $700,000 per employee. Other banks are also expected to offer eye-popping bonuses.
"We need the people there to do the job, and if you don't pay them for their performance, you'll lose them," said Bill George, a Goldman Sachs board member. "It's much like professional athletes and movie stars."
Some might argue, however, that athletes and movie stars didn't share responsibility for a worldwide economic recession, or get a big taxpayer bailout.
"I don't think you can ever overestimate the lack of shame that banks, investment banks or any other kind of bank has at this point," said Ira Rheingold, from the National Association for Consumer Advocates.
"They're folks that just continue not to get it," White House press secretary Robert Gibbs said Monday.
Only last month, the president brought bankers in for a White House lecture on shared responsibility.
"Now that they are back on their feet, we expect an extraordinary commitment from them to help us rebuild the economy," the president said.
The Federal Deposit Insurance Corporation is also considering penalties for banks that encourage excessive risk-taking in their compensation plans.
Sorkin said that in recent weeks, he believes bank executives have begun to recognize the extent of the public outrage.
"I think they are trying to figure out what to do," he said. "They are grappling with it. When you speak to them you can feel it. It's palpable."
Many big banks are prepared to pay their top earners largely in long term stocks this year, which experts say will keep them more focused on long-term performance.
When top bank executives face Congress Wednesday on what caused the financial crisis, "I expect you're going to see some contrition given the anger," Sorkin said. "I think at this point they do get it enough to say I'm sorry."
But the options for the White House on bonuses are limited, because banks who've repaid the TARP bailout can do anything they want.
"We missed a golden opportunity," Rheingold said. "The government bailed them out, and then failed to ask them to do anything for the American people."
And Sorkin said, the public shouldn't necessarily cheer about fees imposed on banks.
"Usually these costs get passed on," he said.