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As frustration continues over extravagant pay to executives of companies receiving billions of dollars in taxpayer aid, Paul Solman travels to AIG headquarters and Washington to explore options for getting some of the money back.
And a second take on the economy, a look at the growing calls to take back some of the money paid to corporate executives in high salaries and bonuses. Economics correspondent Paul Solman has our report.
PAUL SOLMAN, NewsHour Economics Correspondent:
Wall Street, for years proud bastion of American economic might and expertise; now a symbol of pay for non-performance, with us taxpayers picking up the tab.
Can we get any of the money back, so-called "clawbacks"? Can we reform the system?
First stop on our quest for answers: the AIG office in Connecticut that tanked the firm the day after news broke of millions in bonuses here. Those working in the same building didn't know whether to laugh or cry.
Good fodder for jokes for us, because being downstairs from them.
What's the best AIG…
We'll see the money floating down outside the windows.
I kind of blocked it out mentally — just from a morale standpoint, I think the human spirit can only take so much.
What's so demoralizing: personal gain, public loss to the tune of billions at AIG alone.
But AIG is just one of many, says lawyer Dan Pedrotty, head of the AFL-CIO's Office of Investment.
DAN PEDROTTY, AFL-CIO:
The top five investment banks in the five years leading up to the current crisis awarded $145 billion in bonuses.
Billion dollars in bonuses. And this is larger than the GDP of countries like, you know, Pakistan and Egypt.
Even normally two-handed economists have lost the use of their other hand.
PETER MORICI, University of Maryland: It was because of the compensation and the bonuses on Wall Street that executives did reckless things, which destroyed the value of their companies. That's why most of have 201(k)s when we used to have 401(k)s.
Peter Morici is at the University of Maryland; Richard Freeman, Harvard.
… the only thing that matters in these peoples lives is pure, unadulterated greed.
But this is one of the fundamentals of economics, incentives matter.
RICHARD FREEMAN, Harvard University:
Yes. Exactly. But there's also — we didn't realize there was huge incentives to cheat and to misreport things, and that's what seems to have occurred.
Even American Bankers Association CEO Edward Yingling doesn't dispute this argument.
EDWARD YINGLING, American Bankers Association:
There is broad agreement within the financial sector that the compensation policies are — have been misaligned, would be the word.
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