Who is to blame for the bailout bonus scandal?
There is plenty of blame to go around. Executives of AIG and other Wall Street firms have acted like modernday Marie Antoinettes, so disconnected in their own little bubbles that they can’t respond to the crisis with human decency. But we can’t let Congress off the hook. They had ample opportunity to prevent this from happening by putting strict, measurable limits on compensation in the original bailout plans. Instead they backed down to pressure from Treasury officials, first in the Bush administration and then in the Obama administration. Congress’s inaction on excessive compensation over the past two decades has led to an increase in the gap between CEO and average worker pay from 41-to-1 in 1980 to 344-to-1 in 2007.
