From the Damned-If-You-Do file comes Wednesday's front-page story by Graham Bowley on the big bonuses being earmarked for employees of Goldman Sachs after the financial firm had its best quarterly profit ever: "$3.4 Billion Profit at Goldman Revives [1]Gilded Pay Packages [1]."
Goldman Sachs received federal assistance under the Troubled Asset Relief Program, which helps explains the story's moralistic tone - the derogatory adjective "Gilded" is designed to call up images of the Gilded Age's extravagant public displays of wealth.
Even on Wall Street, the land of six- and seven-figure incomes, jaws dropped at the news on Tuesday: After all that federal aid, a resurgent Goldman Sachsis on course to dole out bonuses that could rival the record paydays of the heady bull-market years.
Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced that it had earmarked $11.4 billion so far this year to compensate its workers.
At that rate, Goldman employees could, on average, earn roughly $770,000 each this year - or nearly what they did at the height of the boom.
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But Goldman's sudden good fortune, coming only a month after the bank repaid billions of bailout dollars, raises questions for Washington policy makers. Goldman, analysts warned, is embracing financial risks that many of its competitors are unable or unwilling to take. While Goldman managed those risks this time, its strategy could backfire if the markets turn against it.
Another concern is that the blowout profits might encourage rivals to try to match Goldman in the markets so they, too, can return to paying hefty bonuses. Wall Street's bonus culture is widely seen as having encouraged the excessive risk-taking that set off thefinancial crisis.
"I find this disconcerting," said Lucian A. Bebchuk, a Harvardlaw professor. "My main concern is that it seems to be a return to some of the flawed short-term compensation structures that played an important role in the run-up to the financial crisis."
Even inside Goldman, executives acknowledged that the bank's stunning profits, coming when so many Americans are grappling with a deep, painful recession, presents something of a P.R. challenge.
Wasn't the point of the bailout to get these firms back in the black? The Goldman Sachs profit can be seen as a success story,as opposed tothe cautionarytale the Timestries to shape.And the compensation is a means to retain the workers that gave the firm a successful quarter in the first place.
Still, in Washington, some lawmakers warned on Tuesday that a quick return to such high pay would stoke public anger as the Obama administration tried to overhaul financial regulation. They warned that Wall Street lobbyists were already trying to block financial reforms.
"People all over this country feel an incredible frustration that they are seeing their neighbors lose their jobs and the government is helping companies likeA.I.G.and Goldman Sachs and then the next thing they are reporting huge profits and huge compensation," said Senator Sherrod Brown, Democrat of Ohio and a member of the banking committee. "I think people are incredulous that this system is working this way."
Other analysts welcomed Goldman's results as a sign the financial industry was on the mend.