Back when the execrible Wall Street Bailout bill was before Congress, The New York Times and also Barry Ritholtz of The Big Picture blog called for a "claw back" provision to the TARP program, pointing out that at the same time as Wall Street firms needed nearly $1Trillion from taxpayers to stay solvent, their CEO's and other senior executives were keeping monstrous bonuses for what turned out to be fictitious profits. Writedowns in the $ hundreds of billions had completely wiped awary the alleged profits of years' past.

Needless to say, that paeon fell on deaf ears.

Today CNBC has an article on exactly how egregious those bonuses were.

A few excerpts (but go read the whole article):

For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.
....
Mr. Kim’s colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.

But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount....Unlike the earnings, however, the bonuses have not been reversed.

While several Wall Street firms, including Morgan Stanley are attaching "claw back" provisions to compensation packages now, those are prospective only:

Under the plan, Morgan Stanley will withhold a portion of its employees’ bonuses for three years. If a worker’s bets on the markets go wrong during that time, some of the bonus will not be paid. The so-called claw-back provision is intended to discourage employees from making short-sighted decisions by tying their compensation to the bank’s long-term performance.

This is not good enough by a long shot. It may be too late to go back and amend or rescind the terms by which Wall Street got its first installment of TARP funds. But any subsequent injection of capital MUST include a retrospective claw back provision, and also the right of the Federal government to subrogate, in other words to step into the employers' shoes, and enforce any employment provisions that might allow for the clawing back of past bonuses for fictitious profits.