What Part of "Are You Out of Your Mind?" Do You Not Understand?

Sunday's New York Times carried a page-one story by Louise Story about the "bounce back" in Wall Street pay.

My "favorite" quote came from Sandy Gross, a managing partner of Pinetum Partners, a financial recruiting firm: "Wall Street is being realistic. You have to retain your human capital."

Realistic?!? If that's realistic, I'm the tooth fairy. (Full disclosure: I'm not.)

Morgan Stanley, for example, set aside more than $2 billion (yes, that's with a "b") last quarter for compensation, even though the firm lost more than $500 million (with an "m") in the same quarter. In other words, it could have avoided posting such a drastic loss by setting aside less for compensation. I don't know about you, but to me, this is a classic example of carts before horses.

Beyond that, the financial firms have been shedding thousands of employees for months now. So I find it hard to believe that banks would have trouble finding highly qualified employees.

It was one thing when investment banks were all privately-held partnerships, and the partners could divvy up the cash left at the end of the year as they liked. But today, when they are largely publicly-traded -- and taxpayer-bailed-out -- such sums seem not just unethical, but obscene.

If there is money piling up, shouldn't it go as dividends to bank shareholders, who have seen their wealth evaporate as share prices fell precipitously over the last year?