Banks Fire Back at the US Government

March 11, 2009

The NYT and the WSJ both have big articles today on how highly-paid bankers are chafing in this brave new world of government restrictions on things like how much they’re paid. The NYT says that a lot of banks are itching to give their TARP funds back to the goverment, in order to give themselves more freedom of movement, while the WSJ looks at a lot of senior bankers simply leaving their jobs voluntarily, since "at the moment, no one can tell bankers whether they will or won’t get paid for the work they do in 2009".

I suspect that these two articles are part of a broader PR war between banks and the government — and I fear that the war is intensifying, which would in no way be a good thing. This crisis is big and serious enough that we really need the two biggest sources of money in the economy to be working together, rather than sniping at each other unhelpfully. Tim Geithner, with his history at the NY Fed, should be the perfect person to make that happen, but he doesn’t seem to be doing very well so far. Any bright ideas for how we can try to call a truce here, before things get worse?

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