Should Wall Street be embarrassed about its record pay?

President Obama thinks Wall Street should be embarrassed to pay itself multi-million dollar bonuses. But embarrassment is not in Wall Street's emotional lexicon -- except for the embarrassment of getting paid a smaller bonus than the person sitting at the next desk. And it's that kind of embarrassment that is driving Morgan Stanley (MS) to pay out 72 percent of its revenue in cash compensation.

While we're at it, the SEC should be embarrassed to allow Wall Street banks to sell their stock to the public. That's because those banks are so clearly run for the benefit of their employees rather than for public shareholders. Morgan Stanley lost $1.3 billion in the second quarter -- since it did not make a profit, it makes no sense to me to pay bonuses. Meanwhile, Goldman Sachs Group (GS) is on track to pay itself almost $773,000 in bonuses per employee -- it made $3.4 billion in profits in the second quarter -- but those came mostly from taking big trading risks.