English Audio Request

The public furor over the financial crisis of 2008-09 is a case in point. For years, stock prices and real estate values had climbed. The reckoning came when the housing bubble burst. Wall Street banks and financial institutions had made billions of dollars on complex investments backed by mortgages whose value now plunged. Once proud Wall Street firms teetered on the edge of collapse. The stock market tanked, devastating not only big investors but also ordinary Americans, whose retirement accounts lost much of their value. The total wealth of American families fell by ＄11 trillion in 2008, an amount equal to the combined annual output of Germany, Japan, and the UK.
In October 2009, President George W. Bush asked Congress for ＄700 billion to bail out the nation's big banks and financial firms. It didn't seem fair that Wall Street had enjoyed huge profits during the good times and was now asking taxpayers to foot the bill when things had gone bad. But there seemed no alternative. The banks and financial firms ad grown so vast and so entwined with every aspect of the economy that their collapse might bring down the entire financial system. They were "too big to fail"
No one claimed that the banks and investment houses deserved the money. Their reckless bets (enabled by inadequate government regulation)had created the crisis. But here was a case where the welfare of the economy as a whole seemed to outweigh considerations of fairness. Congress reluctantly appropriated the bailout funds.
Then came the bonuses. Shortly after the bailout money began to flow, news accounts revealed tat some of the companies now on the public dole were awarding millions of dollars in bonuses to their executives. the most egregious case involved the American International Group, and insurance giant brought to ruin by the risky investments of its financial products unit. Despite having been rescued with massive infusions of government funds (totaling ＄173 billion ), the company paid ＄165 million in bonuses to executives in the very division that had precipitated the crisis. Seventy-three employees received bonuses of ＄1 million or more.
News of the bonuses set off a firestorm of public protest. This time, the outrage was not about ten-dollar bags of ice or overpriced motel rooms. It was about lavish rewards subsidized with taxpayer fund to members of the division that had helped bring the global financial system to near meltdown. Something was wrong with this picture. Although the U.S government now owned 80 percent of the company, the treasury secretary pleaded in vain with A.I.G's government-appointed CEO to rescind the bonuses. "We cannot attract and retain the best ahd the brightest talent" the CEO replied, "if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S treasury" He claimed the employees' talents were needed to unload the toxic assets for the benefit of the taxpayers, who, after all, owned most of the company.