Quit whining, Wall Street. Nothing has changed.

by Duff McDonald, contributor

FORTUNE -- There goes Dan Loeb again, sounding off to great effect. He used to confine himself to criticizing overreaching and overcompensated CEOs, targets we could pretty much all agree on. But the prickly hedge fund manager decided to join the chorus of aggrieved financiers in his latest missive, setting his sights on today's bogeyman of choice: oppressive government.

Kudos, Mr. Loeb, for garnering our attention once again. You're damn good at it, even if your latest diatribe is lacking in originality.

The mere act of contemplating an overreaching Obama administration, wrote Loeb, "chills all participants in these free markets." Can you feel the frisson in the room? I can't, and that's not just because it's 95 degrees out there. But some can: Andrew Ross Sorkin at The New York Times took him at his word, giving Loeb the platform to which he clearly aspired when he wrote his "jeremiad" on behalf of the suffering pinstriped. Others weren't so kind.

Why, for God's sake, have so many otherwise "intelligent" Wall Streeters decided to find common cause with the know-nothings who insist that Obama is a Muslim communist, intent on destroying free-market capitalism as we know it? Sure, more rules are more annoying than fewer rules, but the financial "reform" that's been enacted in this country has been akin to switching from baseball's American League to its National. No more designated hitters allowed? Oh no, David Ortiz might have to retire! The game will survive.

(The alarmist tone is reminiscent of the folks over at the NRA - you know, the ones who are always claiming that some Democrat is on the verge of taking all their guns away? I'm talking to you, father-in-law, although you're probably not reading this, given that it's almost hunting season again, and you're likely in your basement cleaning one of your many rifles. I like the taste of venison, so please, keep those deer in your sights. But stop pretending like your arsenal is in Obama's.)

Has Wall Street really changed that much in the wake of the bust? Is it really under such threat that Loeb should be calling all able-bodied men to the ramparts? No, it has not, and no, it is not. And let's just get right to the real point of it all: the ridiculous money these people make for basically sitting behind their desks all day.

The more things change, the more they stay the same

Five years ago, I wrote a piece in New York magazine about the obscene compensation at Goldman Sachs (GS, Fortune 500). It included the following jewel from Andy Kessler, a Wall Street veteran himself: "Wall Street is just a compensation scheme. They literally exist to pay out half their revenue as compensation. And that's what gets them into trouble every so often -- it's just a game of generating revenue, because the players know they will get half of it back."

They're still doing exactly that. Through August of this year, Goldman had set aside 48% of its $13.8 billion in net revenues for compensation. And guess what? They're going to get paid earlier this year than last so as to avoid helping fund their own bailout. Is the most overpaid industry in the history of man about to lose its place at the front of the money queue? It is not.

Paying your people a cut of revenues generated is not such a bad thing, of course, unless they happen to be gambling irresponsibly with other people's (i.e., shareholders) money. That's what got us in the trouble we're in today. And despite all the best intentions of those trying to restrain the gamblers from doing so again, Wall Street continues to roll the dice with an eye on short-term winnings at the expense of long-term prudence.

Fortune contributor William Cohan has written convincingly on the subject of revenue generation taking precedence over that of profits and how it is difficult to restrain the denizens of Wall Street from betting big when it's not their own capital at stake, especially when the greatest of failures requires no admission of wrongdoing, nor any forfeiture of ill-gotten gains. (While one would like to think that Lehman's Dick Fuld learned even a single thing from his comeuppance, it's quite clear that he did not. To be given all that money with no sense of responsibility in return. It's like he thinks he's the Queen of England or something.)

Some of the rules may have changed, but the structure of the industry -- one that pays itself half of the revenues it brings in -- has not. I had lunch with a partner at a private equity fund yesterday and asked him if he thought that Wall Street compensation was going to change in any fundamental way as a result of what had just happened. He laughed at the question.

Don't believe Dan Loeb's faux-earnestness. He's laughing too. To top of page

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