Wall Streeters made fortunes, the new official report on America’s 2008 economic meltdown charges, defrauding the American public. They’re still making fortunes — and this official report is already sinking out of sight.

By Sam Pizzigati

A quarter-century ago, in 1986, the biggest Wall Street banker paycheck went to John Gutfreund, the Salomon Brothers CEO. Gutfreund pulled in $3.2 million. Two decades later, in 2006, Merrill Lynch CEO Stanley O’Neal pocketed $91 million.

To understand the 2008 Wall Street meltdown that cratered the U.S. economy, suggests the new final report from the panel Congress appointed to probe the causes of that crater, you need to understand this enormous pay explosion — and the fierce incentive this explosion created for reckless and fraudulent behavior.

How reckless and fraudulent? In the years that led up to the 2008 meltdown, the Financial Crisis Inquiry Commission report released late last month details, Wall Street’s top bankers and financiers “made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective.”

These same bankers borrowed, based on these securities, tens of billions of dollars “that had to be renewed each and every night” and then traded these billions in totally unregulated, semi-secret, financial “derivative” gambles.

This frenetic financial folly would eventually leave four million homes lost to foreclosure and another four and a half million American families either ensnared in the foreclosure process or seriously behind on their mortgage payments.

“Nearly $11 trillion in household wealth has vanished,” adds the Financial Crisis Commission final report, “with retirement accounts and life savings swept away.”

That sweeping never reached Wall Street’s executive suites. The executives and traders who orchestrated the meltdown’s financial devastation have either walked away with fortunes — or resumed, post-meltdown, their fortune making.

The top five execs at Bear Stearns, for instance, all lost their jobs when that investment house collapsed in 2008. But in the eight years before that collapse, notes the Financial Crisis panel, these five “took home over $326.5 million in cash and over $1.1 billion from stock sales.” Their windfall exceeded the annual budget of the SEC, the federal agency that’s supposed to keep Wall Street honest.

Why didn’t regulators from the SEC and other agencies keep better tabs on Wall Street’s behavior? The same pay explosion that gave bankers an irresistible incentive to defraud inhibited effective regulation. Agencies couldn’t afford to compete with Wall Street to retain knowledgeable financial professionals.

The Wall Street pay explosion also helps explain why this Financial Crisis panel final report — a clear, compelling read — appears to be going nowhere. The 545-page paper, since its January 27 release, has sunk, like a rock, from public view.

Reports from blue-ribbon panels don’t, of course, always sink. They sometimes help crystallize public outrage and serve as a useful stepping stone to fundamental reform. In the Great Depression, the Senate Banking Committee’s celebrated Pecora Commission report played just that role.

But blue-ribbon reports, to make an impact, need political patrons, elected leaders who’ll talk the report content up, in news conferences and speeches, and demand immediate action to correct the ills that report content identifies.

The Pecora Commission report had plenty of those patrons, including President Franklin D. Roosevelt. The Financial Crisis Inquiry Commission has had virtually none. The White House has done next to nothing to give the report legs, and neither have many Democratic lawmakers.

Republicans, for their part, have followed the lead of the four GOP appointees on the panel. All four “dissented” from the main report, and their convoluted rebuttal to the majority report has allowed conservatives — and much of the media — to dismiss the Financial Crisis panel report as a purely partisan exercise.

Why all the haste to bury this report? Politicos on both sides of the aisle have essentially become too dependent on Wall Street. The report itself supplies the basic numbers: From 1999 to 2008, the financial industry dumped over $1 billion into political campaigns — and spent another $2.7 billion on lobbying.

That money has kept the Wall Street money machine percolating nicely. Total pay in the financial sector, the Wall Street Journal reported last week, topped $135 billion last year, a new record. Overall, concludes the Council of Institutional Investors, pay practices on Wall Street “have worsened” since the 2008 crisis.

The American people, meanwhile, remain absolutely outraged. Over 70 percent of Americans, a Bloomberg poll found this past December, want big bonuses banned this year at Wall Street firms that took taxpayer money.

People power, of course, can check money power, but only if organized. In the Great Depression, people did organize. The hugely influential Senate Banking Pecora Commission operated against the backdrop of a mobilized popular uproar.

The lesson for today? Even the most compelling blue-ribbon reports can’t, on their own, drive real reform. The pressure to end the pay excess behind the horrors the Financial Crisis Inquiry Commission has so exhaustively chronicled is going to have to come from average Americans.

The Financial Crisis Inquiry Commission has its final report available online, for free download. Interested in organizing, in your community or congregation, for economic security and justice? Check the Common Security Club network.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up to receive Too Much in your email inbox.