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TechnoratiWorkers Laid Off, Execs Paid Off
The global financial crisis deepens, with more than 10 million in the U.S. out of work, according to the Department of Labor.
Unemployment hit 6.7 percent in November. Add the 7.3 million "involuntary part-time workers," who want to work full time but can't find a position. Jobless claims have reached a 26-year high, while 30 states reportedly face potential shortfalls in their unemployment insurance pools.
The stunning failure of regulators like the Securities and Exchange Commission was again highlighted, as former NASDAQ head Bernard Madoff (you got it, pronounced "made off") was arrested for allegedly running the world's largest criminal pyramid scheme, with losses expected at $50 billion, dwarfing those from the Enron scandal. The picture is grim - unless, that is, you are a corporate executive.
The $700 billion financial bailout package, TARP (Troubled Assets Relief Program), was supposed to mandate the elimination of exorbitant executive compensation and "golden parachutes." As U.S. taxpayers pony up their hard-earned dollars, highflying executives and corporate boards are now considering whether to give themselves multimillion-dollar bonuses.
According to The Washington Post, the specific language in the TARP law that forbade such payouts was changed at the last minute, with a small but significant one-sentence edit made by the Bush administration. The Post reported, "The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction."
Read the fine print. Of the TARP bailout funds to be disbursed, only those that were technically spent "in an auction" would have limits imposed on executive pay. But Treasury Secretary Henry Paulson and his former Goldman Sachs colleague Neel Kashkari (yes, pronounced "cash carry"), who is running the program, aren't inclined to spend the funds in auctions. They prefer their Capital Purchase Program, handing over cash directly. Recall Paulson's curriculum vitae: He began as a special assistant to John Ehrlichman in the Nixon White House and then went on to work for a quarter-century at Goldman Sachs, one of the largest recipients of bailout funds and chief competitor to Lehman Brothers, the firm that Paulson let fail.
The Government Accountability Office issued a report on TARP Dec. 10, expressing concerns about the lack of oversight of the companies receiving bailout funds. The report states that "without a strong oversight and monitoring function, Treasury's ability to ensure an appropriate level of accountability and transparency will be limited." The nonprofit news organization ProPublica has been tracking the bailout program, reporting details that remain shrouded by the Treasury. As of Tuesday, 202 institutions had obtained bailout funds totaling close to $250 billion.
House Speaker Nancy Pelosi said recently, "The Treasury Department's implementation of the TARP is insufficiently transparent and is not accountable to American taxpayers." Barney Frank, D-Mass., chair of the House Financial Services Committee, said earlier, "Use of these funds ... for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc. - is a violation of the terms of the act."
Republican Sen. Charles Grassley of Iowa said of the loophole, "The flimsy executive compensation restrictions in the original bill are now all but gone."
Put aside for the moment that these three all voted for the legislation - the law clearly needs to be corrected before additional funds are granted.
The sums these titans of Wall Street are walking away with are staggering. In their annual "Executive Excess" report, the groups United for a Fair Economy and the Institute for Policy Studies reported 2007 compensation for Lloyd Blankfein, CEO of Goldman Sachs (Paulson's replacement), of $54 million, and that of John Thain, CEO of Merrill Lynch, a whopping $83 million. Merrill has since been sold to Bank of America, after losing more than $11 billion this year - yet Thain still wants a $10 million bonus.
Paulson, Kashkari and their boss, President George W. Bush, might not be the best people to spend the next $350 billion tranche of U.S. taxpayer money, with just weeks to go before the new Congress convenes Jan. 6, and Barack Obama assumes the presidency Jan. 20. As Watergate leaker Deep Throat was said to have told Bob Woodward, back when Paulson was just starting out, "Follow the money." The U.S. populace, its representatives in Congress and the new Obama administration need to follow the money, close the executive pay loophole and demand accountability from the banks that the public has bailed out.
Denis Moynihan contributed research to this column.
41 Comments so far
Show AllGoldman Sucks
May all Beings be blessed.
Has Paulson and his crew never heard of the French Revolution? Even a bunch of dummies are not going to stand around and starve while they continue the party.
The party is almost over: Somebody else said you can't generate wealth just by pushing paper
around, and that's all they know how to do.
Climate change will hit the fan hard.
A worldwide depression seems inevitable.
You think we've seen terrorists attacks? Wait until we have no
defenses. The bomb you say? Maybe they are crazy enough, who knows?
In 6 mos. the media will have people focused on some other non-issue and this robbery will be long forgotten. These thieves know the sheeple have a 30 sec. attention span. Move along , nothing too see here folks.
Oh, it's not just the execs who are walking away with the cash. While America's largest institutions are in the midst of laying off hundred of thousands of US workers, they are at the same time hiring fast and furiously at their Indian subsidiaries. Yes, this country is selling its soul to foreign countries. Maybe one day those with the power to make such decisions will realize that if people in the US don't have jobs, they can't buy goods and services from US companies.
I was amazed today when I called Sallie Mae to ask about my kid's student loan. My call went to India. This is a quasi-governmental agency, and it's sending jobs to India. Nice. Isn't it bad enough that the airlines, banks, and other major industries have been taking our jobs away? A few I have encountered that are siphoning off our jobs to the Indian subcontinent are HSBC, Vonage, Wells Fargo, Bank of America, JPMorgan Chase, Delta Airlines. And now Sallie Mae.
And please, I have nothing against the Indian people. But wouldn't you think that US investors would rather build a society of consumers here in the US rather than in India? Seems like a no brainer to me.
People would be buying goods and services in this country instead of China and India only if people with better talents were actually given the opportunities to create better but they ain't and every time they try, they get in trouble with the law simply because a corporate giant don't want to compete. And the Chinese and Indian workers are getting near-slave wages. They're suffering just as much as we the American electorate. We need to unite the working class citizens of both sides and not allow the elites to keep us divided.
Excellent point. Once again shows that the patriotism of the money changers is all smoke.
Joe
lwhunt330
Rape is the correct description but it began in 1913 when the then current idiots in the White House (Col. House had Wilson on a short leash) and Legislature foisted paper money (Federal Reserve Act) and The Big Racket (16th Amendment) on the nation.
Since then, whether wanted or not, we have had near continuous war and near constant inflation. War and inflation mean profits for the powerful at the expense of the rest of us.
Near 30 years earlier the Judicial Idiots had, despite its being clearly unconstitutional, pronounced the Federal Government could make paper money legal tender, a necessary prerequisite for both of the 1913 actions.
Google "A Plear For the Constitution of the United States" for a clear and complete description of that travesty. George Bancroft wrote it it 1884. His first paragraph is a succinctly predicted description of our current financial debacle.
Anyone for UNDO/REDO of 1913.
EXCELLENTLY PUT!
In a chess game, they'd call what's happening now the 'endgame.' Rather than resigning and admitting defeat, they are making every move they have to hold off a 'checkmate' which cannot be stopped.
Amy sez: "Put aside for the moment that these three [Pelosi, Frank and Grassley] all voted for the legislation - the law clearly needs to be corrected before additional funds are granted."
Congress - hear me hear me. You better stop paying out this money right now. You better demand accounting for what was spent so far. You better start firming up the rules and closing the "loopholes". The recipients have no rights to set the terms of these contracts. WE THE PEOPLE are giving them a gift - we get to call the tune.
You have to stop mugging and clowning around for the cameras and DO SOMETHING. We will be watching and you will be punished at the polls. I promise I will work for that. And so will a lot of others.
Joe
I've gotta agree with you whole-heartedly on this one. My reaction, admittedly knee-jerk though it is, is to tell every last person in congress, and the white house (current and future) they better get this revised, loop holes closed, and a full accounting of this money, and any other taxpayer monies, being shelled out, or I will make it my mission to deny each and every one of them any kind of elected office. Yup, this story has made me finally decide I must post on this site, having lurked for a year plus. And I am incensed!
" ... they better get this revised, loop holes closed, and a full accounting of this money, and any other taxpayer monies, being shelled out, ... "
It would be one thing if it actually was current taxpayer money. That would be bad enough. But its ALL borrowed money thats going to have to be repaid with interest. Is there ever going to be an end to this? Borrowed money paying huge bonuses, and then we have to repay it with interest?
-- EKATON --
True.
Joe
This is the last big rape by the Republicans as they go out the door. The final finger wave to all working (still working so far) American taxpayers.
Can you guarantee this is the last? That would be nice.
Joe
One can only hope, but it is probably is there last gasping breath--if not forever, then at least for a long while. If the Dems don't bring 'radical' change, it may signal the end for them as well, but time will tell.
Don't forget that these official unemployment figures do not take into account other factors such as the unemployed who have given up and those who are long term unemployed. Furthermore, did you know that there are more temporary contract positions than there are full time ones? Most young people are lucky to get 3 month to 1 year contract positions these days and at least half of them never get a shot at full time conversion. I'll bet the unofficial unemployment is 17% and we're not even talking about the underemployed.
By the way, did any of you know that KashKari's parents are from Kashmir, India ? I doubt the Kashmiris would welcome this fraud back there.
Unemployed doesn't include underemployed, people working at jobs like fast food at lower pay than desired job, prisoners at federal, state, and local jails, unemployed illegals, students and others like independent contractors out of work and black market day workers etc.
More than 1 in 100 adults in the US are in prison - (see wikipedia which cites official numbers for 2007) 7.2 million invisible people as far as employment goes - if we let them out would they have jobs?
If you really want to go nuts - find out how they calculate inflation - it figures the speed of a new computer compared to the old one (price doubles speed 4 times faster means deflation) and many other stupid assumptions that vastly understate costs for regular people like FOOD and ENERGY in the calculation. Investors calculate their own numbers or hire a service to do it because the government numbers are calculated differently every year or two to give the answer they desire.
Yes, that is totally insane to the point I didn't even want to think about it but thanks for stepping in on it. As for prisons, TX and CA are gearing up for more prison building projects in the rural lands even at the cost of bulldozing people's homes.
WASHINGTON - The Bush administration is looking at "orderly" bankruptcy
as a way to deal with the desperately ailing U.S.
We work all our lives and what do we get? Orderly Bankruptcy is like euthanasia.
We need a Single Payer health plan and to hell with this trickle down kool-aid!
Don't focus all your energy on the Treasury/TARP Program.
The Federal Reserve has already given away $2 TRILLION of your tax dollars. (And pledged to give away up to 6 TRILLION more).
And they refuse to tell you who they gave it to and what collateral is being used to back it up.
-------------------------------
From Bloomberg: Dec. 12 -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
Full article:
http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLnZZlc&refer=home
Talking to a friend in Europe last night one thing became apparent.
To the contrary to the states, Europe has become a powder keg.
People are fed up by the lies they are dished out by their governments.
Greece is just the beginning.
Here in the states people are obviously so obedient that the feds
can fuck them a million times over.
The whole capitalist 'take it from the little guy' system is a ponzi scheme.
Unless there is a revolution with consequences as the expropriation
of all those criminals that have enriched themselves on the expenses
of the people, nothing will change.
With the choices for the new administration members, it becomes clear
that there are two possibilities. Obama was lying to win the elections, or
he never won this election - it was given to him to pacify the masses,
that have turned angry, sort of, with the government.
Laying off workers and let them rely on unemployment benefits from
a bankrupt system, while at the other hand keep paying the very
people that are responsible for lousy performances is, to say the least,
Blasphemy.
More sit ins are required. My suggestion is an all out sit in (or out),
nothing short of a general strike, to show who the real masters of
this 'democracy' are. The People.
Policies and mindset of politicians, or lawmakers if You prefer, show
clearly that once they reach a certain level of influence or wealth,
they no longer consider themselves part of the populus. They are
above the ordinary, average citizen, above the law.
For anybody that has looked through this National Socialism 21st
century style, frustration levels have reached an all out high.
It is like watching Your child drown without being able to rescue it.
Our lives have been sacrificed for the greed of a few. Knowing
about the consequences, it is not satisfying to realize that those
thugs will sit in the same boat with us, the fastest sinking boat in
history.
May all Beings be blessed. Specifically the weak and ill minded.
"Here in the states people are obviously so obedient that the feds can fuck them a million times over.
The whole capitalist 'take it from the little guy' system is a ponzi scheme. Unless there is a revolution with consequences as the expropriation of all those criminals that have enriched themselves on the expenses of the people, nothing will change."
I think it's that way because we have had it relatively easy here in the States (or have had the illusion of it being easy). When the shit hits the fan here, as it now is, and a critical mass of people are pushed to the wall, that tune will change. There is a LOT of pent-up anger here with a seething rage just under the surface. I just hope we can channel that anger in the right direction, but I doubt it - powder kegs tend to blow in all directions.
"All Nature's difference keeps all Nature's peace." Alexander Pope
the mighty xzorloc
PRESENTS
FOLLOW THE MONEY THE FUN GAMESHOW THE WHOLE COUNTRY CAN PLAY!
OUR CELEBRITY ACCOUNTANTS WILL APPEAR ON SHIPS IN THE CAYMANS! WITH RACEHORSES IN KILDARE!
IN PALACES IN DUBAI AND EATING CHOCOLATES IN ZURICH! TOGETHER WE CAN ALL PLAY!
FOLLOW THE MONEY!!!
"Economic growth", the panacea put forward by our representatives including Obama to divert attention from the real issues of wealth redistribution and wealth/power concentration, is beginning to wear.
Unsustainable population growth, resource depletion, environmental pollution and species extinctions are made worse by economic growth. Unlimited growth is cancer. No pol dares to mention there are limits to growth. No pol talks about sustainability. Growth is the oligarchy's answer to all our problems.
Maybe the oligarchy is planning on moving to the moon or to Mars when they finish destroying this planet.
Thom Hartman's article yesterday noted Alexander Hamilton's advice that if we simply move money around without producing anything, we will go broke. Isn't that exactly what Paulson and Wall Street are doing with their socialism for the rich?
Plutocrats are still in charge and saying "let them eat cake". They're pushing the peasants toward a French style revolution.
Didn't a guy with the initials J.C. rail against money lenders once? Then Hamilton and now Hartman. How many times do we have to keep learning the same lesson before it sinks in?
"All Nature's difference keeps all Nature's peace." Alexander Pope
ezeflyer
"Thom Hartman's article yesterday noted Alexander Hamilton's advice that if we simply move money around without producing anything, we will go broke. Isn't that exactly what Paulson and Wall Street are doing with their socialism for the rich?"
I'm glad you brought that up again. That is exactly what is going on.
I agree. That is a profound comment from Hamilton. It applies to the current bank bailout vs. the auto bailout. Lousy as they are, at least cars are SOMETHING.
Lest someone think I endorse Hamilton's economic theories as a whole, I do not. I do not even know what they are. In High School I yawned through American history in the day when it was taught as dry as dust.
Joe
These robbers have been stealing from us for the past twenty years. Frist with regulations and fees that we have had to shell out, fraudulent loans, and mandatory insurances that have made them billionaires, and now these bailouts.
It is now breaking our backs as we scrounge for every penny and still live responsibly. Bail us out, and let these guys pay for it.
Paulson, Altman, Bernake are all worth about half a billion or more each, and there are scores of others like that, including Maddoff. Put their monies together - find about a hundred of these guys, and you have 50 billion. That is a start, isnt it?
Give it to the people.
Or the American Bastille Day is on the horizon.
I am for non violence first. But I have done things pragmatically and there is the prospect that of doing everything and not being able to make it. I am sure I am not the only one in this position. Americans are seething with resentment over the winner takes all attitude. On every game show, every sport, - but that is not life. And pretty darn soon the middle class will take drastic legal action over this to get to the bottom. If the those watching the chicken coop dont, we should find our own dogs to get to the foxes.
Let us start with Prince and Blackwater.
They are there to protect the interests of the super rich only.
Let us make that militia illegal first.
Love
Zero
"Let us make that militia illegal first."
I dunno how that can be done. Much as I hate the idea of arming the population and uniting them and getting their anger directed against the wealthy elites, I'm afraid this is where we're heading.
Oh, and Obama's choices have for the most part been abysmal failures. I'd be interested in hearing what the Obamabots such as madcow and joehope on this forum have to say. My guess is they'll say that "Obama is choosing the right folks and it's time to just shut up and just go along."
We need to build pro-populist 3rd parties from the local levels on up. And while we're at it, in TX and CA we need to get rid of those fascist rules against 3rd party candidates trying to run for office. Just ask Cindy Sheehan and Ron Paul.
"We need to build pro-populist 3rd parties from the local levels on up."
I am all for this, but HOW?
I have looked on the internet for third party sites in my state of Ohio and this is what it says on the Green party website:
"The Green Party of Ohio (GPO) is not an officially recognized political party by the State of Ohio at this time. The State of Ohio makes achieving and maintaining party status more difficult than in many of the other states. Since the state won't assign you a Green Party registration, you can make your commitment to the party known by registering Green on our Web site"
So I can join, but my membership will not be recognized.
This is very frustrating, so if anyone has any suggestions let's hear them!
Today's dueling headlines:
"Obama names Gary Gensler as nominee to head the Commodity Futures Trading Commission... Mr. Gensler is an ex-partner Goldman Sachs..."
"Goldman Sachs Using Taxpayer Money To Fund Bonuses"
Which is a blatant example of the scheme called Ponzi, Wall Street-style: the head of the pyramid, ex-Goldman Sachs partner Paulson, rakes in "new investors" - as in, us, the taxpayers, AKA suckers - and uses said new investment to payoff those at the very top of said pyramid. Then they loan out what's left of the suckers' money back to the suckers at interest, which will be used to payoff the top layer and maybe one or two layers below.
If the suckers dare to suggest that they do not want to invest in the pyramid, they are warned that the entire system will collapse if they so choose to hate America by not handing over an "investment," of which you have no choice anyway. And, also, grandma will die and you'll never work again and it if it wasn't for unions, and also poor people who shouldn't have demanded home loans, everything would be all roses and rainbows.
Madoff was pretty much just doing what the rest of his "friends" were/are - stealing from the bottom to pay the top.
Can we add Goldman Sacks to Madoff and Kashkari for the list of karmic naming coincidences?
Madoff could not have pulled off his scheme without lots of people having been willing to engage in what they thought would be a lucrative secret insider club, no questions asked. There were some innocent victims, but most were greedy narcissists.
Joe
"Can we add Goldman Sacks to Madoff and Kashkari for the list of karmic naming coincidences?"
Yeah, it's sounding like the terrible play in the movie The Producers that was supposed to flop but was a success. This play is terrible but it's making somebody filthy rich.
"All Nature's difference keeps all Nature's peace." Alexander Pope
Sioux Rose
JCLIENTELLE: Dang! You beat me to the punch(line). As a writer who has studied the works of other writers notably Shakespeare, there indeed IS much to a name. He chose Mercutio for a high-strung Gemini (ruled by Mercury) like character in the tragedy of "Romeo and Juliet."
Years ago I had the pleasure of meeting Lewis Lapham (former editor of Harper's) at a Cafe in The Village and I handed him a sketch that was an intended cartoon to accompany a piece I hoped he'd publish on this name thing. If we look at present times as a myth unfolding, then the names of these key characters TRULY DOES TELL their story! Kashkari! Maddoff! How about Alan born to SPAN the range of fiscal GREEN, or Madeleine "All bright" on the western front, or Tom born to Delay or Henry to Hyde evidence, or Oliver North by North-west. Or Bill Frist/frisk the public, and the list goes on and on.
My cartoon was a really arrogant Indian in the foreground, just full of himself. Two aged Indian women knit and he is the subject of their observation expressed as, "Yeah. Shits-on-cloud was BORN with an attitude."
Coincidence or proof of a higher order at work?
Laughing.
Joe
jclientelle
Excellent comment!
Good point. There's a book by James Walsh about Ponzi schemes entitled "You Can't Cheat an Honest Man."
While that statement may be true, it's certainly possible to rob one.
Greedy Wall Street investors may have been cheated but the US taxpayers are being robbed.
q
opensecrets.org reports that Goldman Sachs gave Obama nearly $885,000 in campaign contributions. Securities and investment firms gave Obama more than $13 million according to opensecrets.org. It's certainly no surprise as to why Obama supports the bailout of Wall Street crooks even as he fills his cabinet with them.
Until elections are publicly financed and term limits are imposed for all elective office, these same criminals will be in power.
I agree with your last paragraph, but things being what they are, Obama is carrying a lot of hope for a lot of people.
Seconded.
"All Nature's difference keeps all Nature's peace." Alexander Pope