Record bonuses at bailed-out US banks

[Hannah Bell]

Executives at Goldman Sachs were told last week that they could expect to receive their highest ever bonuses this year, according to an article published Sunday in London's Observer newspaper. The first half of this year has seen a spectacular rebound for Goldman, and the company's London staff were told they would receive corresponding end-of-year bonuses if, as expected, the bank sets a new profit record.

These bonuses will be paid for by the American people. Besides receiving over $10 billion in cash from the US government last year, Goldman Sachs was the largest beneficiary of the government bailout of American International Group (AIG), receiving $12.9 billion to cover funds owed to it by the failed insurance giant.

Goldman Sachs is by no means alone. The Financial Times reported Monday that other banks, including Merrill Lynch, UBS and Citigroup, have sharply increased compensation for top traders. The article noted that the typical salary for managing directors has jumped from $250,000 to $400,000 in just the past few months. This does not count bonuses.

There is an element of provocation in the brazen manner in which the Wall Street elite, whose manic pursuit of personal wealth played a major role in precipitating the deepest economic crisis since the Great Depression, uses taxpayer subsidies to further enrich itself. Like the aristocracies of old, the American financial oligarchy insists on flaunting its power and prerogatives. Mere mortals must “tighten their belts” and accept layoffs and wage cuts, but the “free market” entitles the bankers to use the crisis to make themselves richer than ever...

http://www.wsws.org/articles/2009/jun2009/bonu-j25.shtml

Goldman and other mega-banks are getting a further boost from the government’s policy of encouraging a further consolidation of the banking industry. The disappearance of independent firms such as Bear Stearns, Merrill Lynch, Lehman Brothers, Washington Mutual and other banks has given Goldman, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup a bigger share of the market than ever.

The strongest of these, such as Goldman and JPMorgan, are making a fortune in the bond markets from the massive increase in government borrowing, most of which is due to the government rescue of Wall Street. The banks are charging lucrative fees on government handouts to themselves.

David Williams, an investment banking analyst at Fox Pitt Kelton, told the Observer, "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.... These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."

Of all the banking giants, Goldman Sachs is perhaps the most closely tied to the White House and federal regulators. The list of former Goldman Sachs employees holding top positions in the Obama administration includes:

• Mark Patterson, a former Goldman Sachs lobbyist, who is the chief of staff to Treasury Secretary Timothy Geithner (himself the former president of the Federal Reserve Bank of New York).

• Reuben Jeffery III, former managing partner at Goldman Sachs, who holds the post of undersecretary of state for economic, business, and agricultural affairs.

• Neel Kashkari, former Goldman Sachs vice president, who is the assistant secretary of the treasury for financial stability, responsible for administering the TARP funds.

• Dianna Farrell, former financial analyst at Goldman Sachs, who serves as deputy director of the National Economic Council.

Henry Paulson, the Bush administration’s treasury secretary, who authored the TARP program and oversaw the AIG bailout, was the CEO of Goldman before taking the Treasury post. Between Paulson and Robert Rubin, who served under Clinton, the office of treasury secretary has been occupied by a former Goldman Sachs executive more than half the time since 1995.

The record bonuses come at a time when conditions of life for ordinary people are worse than at any time since the Great Depression. The official unemployment rate hit 9.4 percent last month, and the real unemployment rate—including those involuntarily working part-time and those who have given up looking for a job—is 16.4 percent. The number of mass layoffs in May was the highest on record.

[bertman]

1. I'm sharpening my pitchfork. Somebody get the tar for the torches. The arrogance is

mind boggling.

Recommend.

[Hannah Bell]

2. but what about the governor boinking the argentinian babe?

[Hannah Bell]

3. kick

[The Backlash Cometh]

6. Kick? Was he into S-M?

[Fumesucker]

4. I've honed my damn pitchfork so many times it looks like a scraggly rake now..

And it's sharp enough to cut rice paper floating in midair.

I'd like to actually get to use the fucking thing for once.

[bertman]

5. Fumesucker, I would tell you who to use it on, but I'd get a visit from the guys with badges.

Sorry I can't help.

[bahrbearian]

11. I'm building a Guillotine putting it on a trailer and renting it out.

[progressoid]

7. Ptichforks don't mean shit to these guys.

They got us by the short & curlies and they know it. And no one in Washington will do a thing about it.

[SammyWinstonJack]

8. "And no one is Washington will do a thing about it." NO ONE!

x(

[bahrbearian]

9. "Thank God it Passed"

[SammyWinstonJack]

10. +1

:evilgrin:

[bvar22]

12. "Bi-Partisanship" at its best!

This outrage brought to you, the taxpayer, by BOTH Political Parties working together at the expense of Middle Class Americans.

NOW we have Your Children’s Money too !!!
And there is not a fucking thing you can do about it!
Now THIS is “Post-Partisanship” !
Better get used to it!!
Hahahahahahahahaha!



The "regulations" proposed by the White House are pathetic in the face of the crisis caused by these predators.

William Greider, The Nation. Posted June 25, 2009.

"The most disturbing thing about Barack Obama's call for financial reform was the way in which the president falsified our predicament. He tried to make it sound as though everyone was implicated in the financial breakdown and therefore no one was really to blame. "A culture of irresponsibility took root from Wall Street to Washington to Main Street," Obama explained. "And a regulatory system basically crafted in the wake of a 20th century economic crisis -- the Great Depression -- was overwhelmed by the speed, scope and sophistication of a 21st century global economy."

That is not what happened, to put it charitably. Unlike some other presidents, Obama is much too intelligent not to know this. The regulatory system was not overwhelmed by historic forces. It was systematically gutted and dismantled by the government in Washington at the behest of the banking interests. If Obama wants details, he can consult his economic advisors -- Summers-Geithner -- who participated directly as accomplices in unwinding the prudential rules and regulations. Cheers were led by the Federal Reserve with heavy lifting by both political parties.

The president's benign version of events reminds me of what compliant politicians and opinion leaders said after the war in Iraq they had endorsed turned disastrous. "Hey, we were all fooled." If Obama were to tell the truth now about what went wrong in the financial system, he would face a far larger political problem trying to clean up the mess. Instead, he has opted for smooth talk and some fuzzy reforms that effectively evade the nasty complexities of our situation. He might get away with this in the short run. Congress doesn't much want to face the music either. But Obama's so-called reform is literally "kicking the can down the road," as he likes to say about other problems. In the long run, it will haunt the country because it fails to confront the true nature of the disorders.

Giving more power to the Federal Reserve to be the uber-regulator of banking and finance is a terrible idea (I examine the dangers in a forthcoming Nation article). Asking the cloistered central bank to resolve all the explosive questions about the over-reaching power of financial institutions is like throwing the problem into a black box and closing the lid, so people will be unable to see what happens next. That is the idea, after all, the reason Wall Street's leading firms first proposed the Fed as super-cop, then sold it to George W. Bush and now Barack Obama. Give the mess to the Wizard of Oz, the guy behind the curtain. He can do miracles with money, but don't watch too closely. This constitutes the high politics of evasion."

http://www.alternet.org/workplace/140891/obama%27s_false_financial_reform_is_nothing_but_smooth_talk_and_some_fuzzy_plans/?page=entire

[Romulox]

13. DU's "thank GAWD it passed!" crew won't touch this one. nt

[DCKit]

14. Only 'cause nobody mentioned Obama. Then we'd all be Obama haters...

and that would be the whole story. "Lalalalalalalalalala".

Funny how this stuff is only NOW beginning to make the news cycle.... after Bernanke's been grilled on the hill about his dubious activities in guiding shiploads of $$$ to his old compatriots on Wall St..

The "Thank Gawd" crowd has got nothing. They just have to admit they were wrong and move on or STFU and hope everyone else forgets their cheerleading for the biggest ripoff in history.

It's like the call I got to subscribe to the Washington Post today. I laughed and told the poor woman that the Post has less credibility than the Enquirer - a real shame for such a former icon of journalism. She sounded resigned, but understanding. I guess they've got reporters doing telemarketing now.