I spent long enough in the corporate world to know how it works.
A company exists for one reason: to make a profit. That profit is used to repay shareholders and to reinvest in the business so that it may grow and create more wealth.
It was a good system. Until, as Bob Dylan says in his song Union Sundown, "Greed got in the way."
Business used to accept that there were good times and bad. You saved the money from the good times to help you through the worst of times.
Then it all changed. That profit I spoke of went to pay the heads of companies ever-increasing, obscene amounts of money. The profit expectations on companies were raised because the money was already committed. New norms were established.
And I now believe that new norms are evil. The single greatest problem facing our country and our economy.
Bank of America does not have to close branches and lay off 30,000 people. It has money. It can even stand to lose money for a while. Well, it could if the old ways were still in force. But because the new norms - the new expectations - have to be met even in tough times, they are left with only the easiest way companies have ever had to "make the numbers" - fire people. And make the situation even worse.
A company that was helped enormously by the tax-payer funded bank bailout should have more heart. And should have a little faith in the future that fairly soon they will regret closing those branches, and regret firing experienced people. But Wall Street has no patience. The new norms must be met.
Let's say a company was cruising along nicely making 5% profit. Yes, there was a time when 5% was considered success. Then, by fair means and foul, they manage to make 10%, then 15%, then 25%. Or more in the case of the banks when averaged over a longer period than one fiscal year or one fiscal quarter.
25% is now the new norm. The evil new norm. Because a drop to 24% is now seen as failure. In the same way that America views a silver medal at the Olympic Games as having "failed to win Gold."
Constant growth, constant increases in executive pay, constant quarters that are better than the last are IMPOSSIBLE. Even in good times it is a false measure. In tough times it is economic suicide.
And that, right now is what Bank of America is committing. While at the same time making a clear and obvious political statement: those jobs won't come back until a friendly, paid-for Republican is in the White House.
They do not deserve to call themselves the Bank of America. That trademark should be taken from them.