Gov. Paterson Wednesday defended Wall Street bonuses saying they were a “misunderstood” asset to the New York economy and government revenue.

“If you want the money to come back to the public, you have to allow the profit-taking in Wall Street and then the taxes to come back to New York,” Paterson, a Democrat, said in an interview on CNBC.

“If there’s corruption on Wall Street, weed it out. If there’s irresponsibility, fire people. If they committed crimes, put them in jail,” he added.

“But the public that thinks they are exacting some retribution on Wall Street by holding down bonuses is hurting itself in the end.”

He also defended Wall Street and the financial services industry in general.

“The vilification of an entire industry that has been, to New York, the engine of our economy, will only hurt us in the end,” Paterson said.