Wall Street's Entitlement Culture

But now, the Wall Street wunderkind is gaining similar notoriety. After he became head of Merrill Lynch in late 2007, he sped up bonuses to several executives before Bank of America Corp. bought the investment bank on Jan 1. He also spent $1.2 million decorating his Manhattan office, according to media reports, as Merrill hemorrhaged money — a decision that's invoking particular rage among Americans, including President Barack Obama. Thain left his post at Bank of America on Thursday after unexpectedly big losses at Merrill Lynch; the bonuses were a likely contributing factor in his departure.

Thain's actions exemplify how hard it is for the industry to wean itself off the hefty paychecks and spending the last decade brought — even as financial companies now rely on taxpayer dollars to stay in business.... But analysts say there's still a deeply ingrained culture of entitlement at financial companies. It's a mindset banks will have to work harder at changing as they come to grips with their failures, and as they face more scrutiny after accepting government help.

"You've always had this Wall Street ethic of, I'm going to push the rules as far as I can. That's been part of the culture," said R. Edward Freeman, academic director of the Business Roundtable Institute for Corporate Ethics and Olsson Professor of Business Administration at University of Virginia's Darden School. And, Freeman added, the government for years gave Wall Street carte blanche....

Wall Street employees came to expect big compensation packages as their paychecks kept ballooning year after year. The difference between wages in finance and wages in other private sector industries was "excessively high" from the mid-1990s until 2006, according to a paper by New York University's Thomas Philippon and the University of Virginia's Ariell Reshef published this month by the National Bureau of Economic Research. The last time the difference was similarly excessive was around 1930, they wrote — right after the stock market crash of 1929.

--Wall Street's entitlement culture - Economy in Turmoil (msnbc.com 1.24.09)

This article appeared on msnbc.com today. It shares a glimpse into the sense of presumption and entitlement, hubris and unaccountability, that has defined the professional lives and attitudes of investment bankers and others working on Wall Street for years.

http://www.msnbc.msn.com/id/28817800/