[nick_n_ii]

$50 billion of bailout going to employee bonuses
Posted Oct 31 2008, 07:30 AM by Andrew Horowitz

As if the economic bailout by U.S. taxpayers isn't enough to make you sick to your stomach, new information has come to light that several banks are planning to pay billions of dollars in year-end bonuses from the bailout funds they received. Investigations are beginning into the nine banks that took in the first $125 billion -- the same $125 billion that was supposed to be used to unclog the credit system which was preventing banks from providing much needed funds for individuals and businesses.

There are many feathers in a ruffle over this and New York Attorney General Andrew Cuomo and several congressmen are furious that over $20 billion has already been earmarked as bonus funds for management and employees. Unbelievably, that is just the estimates from Goldman Sachs, Morgan Stanley and Merrill Lynch. There are six more banks that are also working on similar heists.

Here is their rationale for using that money: It is reported that the financial industry pays base salaries in the range of $80,000 to $600,000 and apparently that is simply not enough to keep some of the best and brightest working to keep their companies profitable. It seems that if they were paid only this meager amount, the company would risk mass defections. That would be a real problem...or would it?

Maybe it is time to peg annual bonuses to something meaningful like profitability. As I recall, not only are these the firms that have been losing money (as is evident by the need for a massive multi-billion dollar bailout) but they have also been shown to be the creators of securitization, derivatives, sub-prime mortgages and other toxic credit that is the root cause of this historic global economic catastrophe!

Maybe I am being too harsh? Perhaps management is entitled to hundreds of millions in bonuses for the hard work they do, day in and day out. You have to feel sorry for them as most have had to give up their private jets and instead fly in a cramped seat in first class. Surely most will now have to wonder how they will deal with the excess workload as they have had to fire thousands of employees. Also, they will need to use a good chunk of that money to rebuild their retirement plans as much of their wealth was tied up in their company's stock which, under their leadership, could be down more than 60% just this year alone.

What do you think?

 

[TrueBlueXJ]

I think we should have let the banks go out of business and let the American economy collapse under its own weight. They tried to convince us that this bailout was for our own good, but I haven't seen any of its benefits personally. Have you? No, because it was for the benefit of the already rich, the already powerful, and an insurance policy to make sure they STAYED rich and powerful. If we'd hung them out to dry and let them sleep in the bed they made for themselves, THEN and only then would the average American, you and I and Blue and Jon and Mud and everyone else on this board, reaped the benefits. Because the wealthy control OUR market, and we feed THEIR profits. We do not win. But if they'd crumbled their assets at the behest of their own greed, as they should have, then the economy would start at zero, or damn close to it. Opportunities for advancement would have suddenly been opened up to people who had never even had a TASTE of it. Homes would have suddenly been affordable, because the few standing lenders would have been too afraid NOT to give them to you. Gas prices would have plummeted back to a reasonable rate, because there would be no confidence in the boys' club who controls them.

But... instead we managed to scrape up $700 billion out from under a few international couch cushions, which is an amazing feat when you consider our trillion dollar deficit and the fact that we already owe competing nations billions. I know for me, if I accidentally forget to carry the one and buy that $5 foot long when I've only got $4 in the bank, I have to pay back that $1 plus the $30 overdraft fee. If these banks were going under, we should have charged them for screwing so many people for so many years and threw their asses in jail. Everyday, almost every American finds himself in hard times, but where's our bailout check? Oh, that $600 "stimulus" was it? That stimulated my economy about as much as a rubber glove stimulates my prostate. Try again next time Uncle Sam, that is if you can find the money for us little people, but I understand if you're on hard times yourself. I know what it's like to let a friend borrow some money and then feel guilty when you need to ask for it back, except when I do it it's usually a 20.

 

[nick_n_ii]

Very truly put.

It sucks so much.. Things are so bad for me right now I can't even find a job in my area. Unemployment is a true 33% reason you only see the 9% in the news is the other 24% of us have given up looking for work or we ran out of unemployment so we don't count in the numbers any more...