Let them eat cake: Wall Street execs paid themselves $18.4 billion in bonuses in 2008

Over the past four months, Americans have seen Wall Street speed to the edge of collapse, beg the government for a bailout, spend the money in ways that are completely unclear, and lay the groundwork for another round of federal spending.

Both inside and outside of the Capitol, the general feeling about the bailout has been that it was repulsive, but necessary; after all, as much as it might be fun to nail overpaid CEOs to the wall, nobody really wanted a reprise of the Great Depression.

On Wednesday, however, it came to light that Wall Street paid out roughly $18.4 billion in bonuses last year. While a 44% drop from the previous year, 2008 still goes on record as the 6th highest bonus year in history. Worse yet, many of the companies that lavishly rewarded their workers were the same ones that reported massive losses and pestered the government for the infamous $700 billion bailout.

The idea behind Wall Street's end-of-year bonuses is pretty sound: essentially, financial-sector employees who generate huge amounts of money for their companies are rewarded with a nice chunk of cash. In a perfect world, this system would result in highly-motivated workers who would develop innovative, brilliant ways to make money. In reality, it has resulted in highly-motivated workers finding underhanded ways to create short-term profits at the expense of long-term stability. In other words, a large part of the current economic crisis can be laid at the doorstep of Wall Street wizards who over-leveraged their companies to buy risky securities in the hopes of picking up huge bonuses. Ultimately, they didn't create lasting value; rather, they laid the groundwork for an inevitable collapse.