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TechnoratiAny Pay Cuts on Wall Street Yet?
Congress assured us that there would be no more big paychecks for incompetent Wall Street bankers when they passed their bailout bill. They told us that the tough pay provisions would put an end to the multi-million dollar payouts to these folks.
Last week, Secretary Paulson mailed $150 billion in checks to the big banks. From that point forward, the CEOs and all the other top executives of these banks are now our dependents. They are living off the tax dollars of school teachers in Iowa, truck drivers in Montana, and even Joe the Plumber.
It is difficult to understand why we should be taxing people who make $40,000 a year to boost the paychecks of bankers who make more than $1 million a year and in many cases more than $10 million a year. Senator McCain has called Senator Obama a socialist because Obama believes that it is okay to impose higher tax rates on rich people than poor people. Senator McCain considers this sort of redistribution unacceptable.
But, if redistribution from the rich to the rest of the country is socialist, what do you call the upward redistribution that Congress approved in the bailout package? It's hard to justify taxing people who make $40,000 a year to benefit bankers who make more than 100 times as much.
The Wall Street bailout was a classic, if totally foreseeable, bait and switch. The public has a real interest in ensuring the continued operation of the financial system. This was threatened by the credit crunch last month. This was the legitimate goal of the bailout.
However, if Congress only wanted to preserve the financial system and not reward the people responsible for the financial crisis, it would have been a simple matter to impose safeguards to ensure that the bank executives were forced to take large pay cuts. While many members of Congress implied that the bill would rein in executive pay, almost all the experts who have examined the provisions on executive pay have concluded that they are largely toothless.
The bailout also did not prevent the banks from paying out dividends to shareholders, as was done in the United Kingdom when they injected capital into their banks. This restriction makes sense not only as a punitive measure but also as a way to help the banks build capital. Every dollar paid out in dividends is a dollar that is not going towards building up capital. Stopping dividend payments should hasten the date at which the banks have sufficient capital without relying on help from the government.
The failure to seriously restrict executive compensation or prohibit dividend payments, coupled with the relatively generous terms given the banks on the capital obtained from the government, shows that the bailout was not just about keeping the financial system operating. It was also about giving money to the banks' executives and their shareholders.
The media seem to think this is all very funny. After having done public relations work to help get the bill through Congress, most major news outlets have not highlighted the fact that no bank executives are likely to get pay cuts as a result of the bailout. Nor have they highlighted the generous terms of the bailout compared to the UK.
The public should continue to follow this issue even if the media does not. They should keep asking the members of Congress who touted the pay restrictions in the bailout bill which executives are getting their pay cut.
The public should also recognize that in the U.S. economy, what you earn has little to do with your ability or the quality of your performance. It matters much more if you can get Congress and Henry Paulson to give you money. Just tell your kids to be sure to make good friends with powerful politicians.
27 Comments so far
Show AllFor the past nine months, it seems that the economic situation is not getting any better. A massive lay offs is still on the rise but pay cuts for the employees is better rather than to be one of the unemployed in the country. These days’ people became more practical w hen it comes to money matters. Some of them are force to cut spending in order to attain their weekly budget. They would rather be employed and have more options, like payday loans, for when they get into a financial bind. As we see it, people are resorting to some creative ways of job hunting. One guy had the right idea about job searching. He sent out an email to his friends and family with his resume attached. He asked them to forward it along to everyone they knew and promised $150 to the person who led him to a job. He found a position as a web developer in no time. And he’s very lucky, because nowadays, we know how hard to find a job that is applicable to your skills and to your knowledge. If you want to read more stories about job seekers, visit your payday loan source.
Pay cuts? My guess is that some secretaries and assistants will be laid off to save money. That's the way it has always been.
Joe
Hey, Representatives, since this money (partially mine) your sending to Wall Street is to help the mortgage crisis and "jumpstart" the economy (give loans so people can buy stuff), I have a novel approach, how about sending a portion to me, just what's left on my loan, that way I can pay off my mortgage freeing up around $650 (I'm not paying on a Mansion but I love where I'm at) a month so I can buy stuff without getting a loan. I promise I'll put some into savings (a BANK so they can loan it out) and the rest I WILL buy stuff every month and that should jumpstart and help keep our economy going. How about it Washington(?) did ya even consider this. Sorry I didn't give you millions to help keep you in Washington, but hey, I am suppose to be your boss! What do ya think gang?
"since this money (partially mine) your sending to Wall Street "
Actually it's being raised through the sales of treasury bills to willing buyers.
Of course the bankers haven't had a pay-cut they've just got more money in the step nearer to the conclusion of Capitalism and the beginning of totalitarism. The biggest con-job in history (the bailout) is just a cover for the consolidation of resources and wealth to an even smaller number of individuals as the Ruling Elite take control of their minions corporations and banks and with the help of whichever puppet gets the White House to installing themselves as gods once they achieve their goal of controlling all resources and wealth and deciding who lives and who dies.
Start researching about FEMA and concentration camps, coffins, red list and blue list. Wake up before it is to late.
Revolution Now! Equalitism Now!
peace and love
all is illusion...there is no government
"Start researching about FEMA and concentration camps"
Did *you* actually do that yet? Let me know when you can even provide a reporter's byline to that urban legend.
Remember, we don't just have the Bush Administration to thank for the bailout scam. It wouldn't have happened without Congress. To see a funny music video about the bailout, click on http://www.youtube.com/watch?v=t0b2ROmoSd4.
Can't you tell? Joe the Plumber was a plant, has an MBA from Yale and was a member of the Skull & Bones. Everything he proffered was a lie learned from Greenspan and a quick reading of Atlas Shrugged. He said he worked 10-12 hours a day as a (unlicensed) plumber, but somehow he found the time to go to a democrat political rally in the middle of the day. Did his boss give him time off for good behavior? Plumbers are part of the construction industry, which ain't in real good shape these days... . The whole thing was a set-up and still is.
-30-
"Joe the Plumber was a plant,"
Not only that, The Neocons used Undisclosed New Technologies to literally *force* Obama to reply to Joe the Plumber with the spread the wealth comment.
I'd like to know what Joe the faux Plumber and John McCain prefer concentrating the wealth upward instead of "spreading the wealth around." Please, I know this is a rhetorical question. Just roll with it.
it's working... just like it was planned
Until "We The People" take back the government (HOW?) and institute Democratic Socialism in place of Greed-based Capitalism, we are stuck in a LARGE hamster cage going round and round to nowhere.
All the pissing, moaning, and bickering on sites like this won't change a damn thing. If we don't start uniting and taking it to the streets, then all this keyboard blathering means nothing.
"Crack open a cynic and you will find an angry idealist!"
matthew loughran
i think there should be a massive move to retake the wealth stolen by the wall st assholes by the US Public by ransacking and removing everything from the wall st assholes mansions and any property they have. all of their possestions could be auctioned at bargain prices and money distributed to back to low and middle income families who have been screwed by theit many criminal enterprises these last many years.
Financial industry deregulation over the past 30 years facilitates global money laundering. Even if Pelosi and the Wall Street pirates were put in jail they would still be laundering ever larger sums of money through their offshore accounts.
Unless a global New Deal is implemented immediately that turns the financial industry into the most heavily regulated industry the world has ever seen, the Wall Street pirates and their congressional enablers will continue to rob the US taxpayer blind.
More Republicans voted against the bailout than Democrats. From now on, Republican voters are officially the ones we should be calling Lesser Evilists.
The following's a great article about how truly corrupt Democrats are:
The Democrats’ “economic recovery” fraud
By Barry Grey
22 October 2008
The “economic recovery” plan being pushed by congressional Democrats, far from representing a serious response to the social disaster threatening working people, underscores the complete subservience of the Democratic Party to Wall Street.
more at:
http://wsws.org/articles/2008/oct2008/stim-o22.shtml
You are pathetic. The Republicans only did this because it was their election stunt. There is no lesser evil. Now shut up and help Ralph Nader win god damn it !
By the way why did Obama support the bailout?
You dum dum. Don't you ever pay attention to my posts. Of course I support Ralph Nader just like you do. At least I try to help Ralph gain support. Do you?
Don't be a Nazi and tell people to shut up, only fascists do that.
Didn't mean to shoot like that but just help Ralph get 5%, ok?
First it's help Nader win then it's help him get 5%. Kind of a big difference. What will happen if Nader gets 5%?
Jeez, Mr Big calling Fearless Leader a hack. What next, Naderites?
It is FACT that Barak Obama supported this bailout! He is 100% with the republicans in stealing tax payer money and giving it to the wealthy. All his talk about change is PURE BULL! A real progressive knows that a vote for Obama is a vote for more of the same, exactly like BUSH! A real progressive knows that Obama is a FRAUD!
DOWN WITH REPUBLICANS! DOWN WITH OBAMA!
I'd like to see the rightwing trolls answer that question. Like "Joe the Plumber", they'll probably "defend" Wall $treet even as they shoot their own feet, make that heads, out.
Meanwhile, for those getting nothing for footing the bill whether they like it or not, the orwellian theme that socialism is the font of all that is evil is shouted from the rooftops.
"They should keep asking the members of Congress who touted the pay restrictions in the bailout bill which executives are getting their pay cut."
Pay cut? Don't make me laugh. Just yesterday an executive at Merril Lynch was paid 10 million dollars to leave. Seems he wasn't covered by the Golden parachute restrictions.
Lobo Gris
Actually, the only restriction is that the company is not allowed to deduct the payment from their profits if in excess of 500K. So the company has to may more tax, if they book any profits. And all these companies being bailed out will earn profits, and will pay out dividends, and will use the money to buy out those companies not lucky enough to be bailed out, and better positioned to make money in the next boom cycle.