Who deserves Wall Street bonuses?
Wall Street bankers are really mad these days — in both senses of that word!
You’d think these whizzes of speculative finance would be ecstatically happy and filled with gratitude, not anger. After all, having crashed our economy, they were allowed to keep their cushy jobs, get bailed out with trillions of our tax dollars and permitted to go right back to playing the same old casino games that had previously enriched them at our expense.
Once again, such powerhouse outfits as Goldman Sachs and JPMorgan Chase are raking in tons of money — and, as in the gilded days before Wall Street plunged Main Street into deep recession, bankers have promptly reverted to the selfish ethic of lavishing multimillion-dollar bonuses on themselves. Goldman, for example, has already set aside more than $16 billion to dole out as end-of-year bonuses for its bankers. That’s a pace of self-enrichment that will siphon off nearly half of all the money that Goldman takes in this year!
So, why are they mad? Because you and I are not showing them any love. Believe it or not, Wall Streeters actually expected that their return to grandiose banker bonuses would be greeted with huzzahs and “you the man” cheers from an admiring public, rather than another coast-to-coast explosion of anger.
Arrogance and avarice seems to be so hardwired into these people that they view outlandish paydays as proof of their business acumen, productivity and success. The richer you are, the more worthy you are, goes their thinking, so not only do they feel entitled to cash, but also to high-fives and hugs from the hoi polloi.
Excuse me, Your Royalnesses, but being mad at us for not cheering narcissism shows just how bull-goose mad you really are. In fact, if you get any goosier, you’ll start flying south every winter.
Especially infuriating is the ridiculous assertion by Wall Street elites that our bailout money was more of a burden than a help. Lloyd Blankfein, CEO of Goldman Sachs, declared last month that he never would have accepted $10 billion from the Troubled Asset Relief Program “if I had known it was pregnant with this kind of potential for backlash.”
Blankfein’s claim is that while some TARP funds might have been of short-term use, they were not really crucial to the recovery of big banks like his, which quickly repaid the government to get rid of the “pregnancy.”
Rather, he explains, it was the good old financial genius of bankers like him that guided Goldman back into the deep waters of prosperity — and huge executive bonuses. He and other Wall Streeters are now using this argument in Washington to fend off new banking regulations, assuring lawmakers that the free market of finance is self-correcting and in good hands.
Hold it right there, slick. TARP funds were the least of the bailout that you received and are still enjoying. First, $12.9 billion was quietly funneled to Goldman Sachs through last year’s backroom bailout of insurance giant AIG — money you’re keeping.
Second, by executive fiat, the Federal Reserve let Goldman magically metamorphose into a bank holding company so it could qualify for cheap funds from the central bank. Third, the FDIC (which exists to insure money that people deposit in banks) put its governmental guarantee behind billions of dollars in Goldman bonds, thus allowing the firm to raise even more capital very cheaply.
Fourth, bank competition was deliberately and drastically reduced as part of the government’s rescue effort, leaving Goldman free to pull more of the investment market into its monopolistic maw. Fifth, and probably most important, the federal government has made clear to speculators everywhere that Goldman will never be allowed to fail — so take all the risks you want, for taxpayers will cover your losses. This is truly a priceless subsidy.
Honesty has long been a stranger in Wall Street circles — but even there, surely there’s a tiny residue of honor that would compel them to admit that any bonus money should go to hard-pressed taxpayers, not to Wall Street’s welfare kings.
Jim Hightower is a national radio commentator, columnist and author.