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Taking a Bullet on Wall St.
Superintendent Carol Johnson of the Boston Public Schools last week officially lined up at the soup kitchen of American education by announcing nearly $60 million in budget cuts. Her pared-down $810 million budget comes after she announced in November new initiatives intended to help Boston "serve as a model for every urban school district in America.'' The recession has rendered Boston as yet another district that is freezing salaries, slashing transportation and cramming kids into fewer schools.
"We will be forced to make tough yet necessary decisions that will impact all of us,'' Johnson said. "In some cases, the decisions may be unpopular, but we must remain on a course that will allow us to offer world-class schools in our world-class city.''
The degree to which so-called world class cities remain glass ceilings for public school kids was illustrated by other recent events. The institutions we bailed out after they brought us to our knees were back to handing out obscene bonuses. JP Morgan Chase awarded CEO Jamie Dimon $17 million in stock. Goldman Sachs CEO Lloyd Blankfein received $9 million in stock. Wells Fargo CEO John Stumpf received $18 million in cash and stock. Morgan Stanley CEO James Gorman received a stock bonus of $8 million. AIG last week announced $100 million in bonuses. Bank of America was reported to be giving out $4.4 billion in bonuses.
This is all part of what the Wall Street Journal last month predicted would be a record $145 billion in compensation at the nation's top 38 banks and securities firms. While national unemployment still hovers around 10 percent, the banking industry has given itself an 18 percent pay raise. The most appalling part of this is that Wall Street actually believes it is responding to our outrage over CEO compensation. In 2007, Blankfein received a Wall Street record $68 million bonus.
About Blankfein's stock award, compensation consultant Brian Foley told the New York Times, "For running an organization that big . . . nine million is not a lot of money.'' In an Associated Press story, compensation consultant Mark Borges said "While the fact that he's making this much won't sit well with people out of work, it seems Goldman is being sensitive to the political considerations and optics of this amount. It's almost as if he's (Blankfein) taking a bullet for everyone else.''
If $9 million is "taking a bullet,'' then there really is no hope to close the gap between Wall Street and Main Street, let alone close any resource and achievement gaps for the nation's school children. While Wall Street bankers feast over $145 billion in compensation, state departments of education are fighting like crabs in a barrel to apply for a chunk of the $4.4 billion that President Obama has put aside for "Race to the Top.''
The federal government did schools a temporary favor last year as the stimulus package contained $100 billion for education. But most of that money will be gone by the end of the school year, leaving them as vulnerable as ever to the antiquated system of tying school budgets to property taxes, which automatically puts low-income urban or rural children in a hole.
Last week, Senators Barbara Boxer of California and Jim Webb of Virginia proposed a 50 percent "taxpayer fairness fee'' on bonuses over $400,000 to employees of Wall Street firms that received federal bailout money. Boxer and Webb claim that up to $10 billion could be raised by the tax. Webb said, "If you're going to get that kind of a bonus, you can share it 50-50 with the people who helped bail you out.''
Where the actual proposal will go is questionable, given Wall Street's deft, bipartisan influence on Capitol Hill and in the White House. But there would be no faster way for the Obama administration and the Democrats to build support for the tax than to say that the $10 billion would go into public education. It is still a paltry sum. But at least, when Wall Street "takes a bullet,'' it could do so on behalf of the schoolchildren of America.
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22 Comments so far
Show AllAfter us, the deluge:
http://www.marketwatch.com/story/how-to-invest-for-the-debt-bomb-explosion-2010-02-09?reflink=MW_news_stmp
Wall Street proves my constant point that people, including the Masters of the Universe, are basely STUPID!
Stupid to think they actually DESERVE bonuses in the first place after steering this country into a jobless recession.
Stupid to think knocking off a few million in individual bonuses will stem the tide of public resentment.
Stupid to flaunt their bonuses in biznews.
Just plain stupid.
Gary
“In fact, one thing that I have noticed... is that all of these conspiracy theories depend on the perpetrators being endlessly clever. I think you'll find the facts also work if you assume everyone is endlessly stupid.”
-- Brian E. Moore
"The most appalling part is that Wall st thinks it's responding to our outrage..."
No. The most appalling part is that anyone thought the bailout was OK without taking action to break up these monstrosities. It is appalling that, before the "crash" 10 firms controlled 50% of all financial assets in the U.S. (or so I've heard)--now there are even fewer of them. It is appalling that anyone expected Wall St "Masters of the Universe" to suddenly become interested in actual investment rather than scams. It is appalling that the Executive and Legislative branches of our gov't refused to listen to the 80% of us that said NO BAILOUT.
Did anyone really expect any other behavior from thieves and liars. Am I being too kind here?
Cassandra: I agree with your post!
This morning, I read that Timothy Geithner might be forced to leave his position -- Secretary of the Treasury due to his ties to AIG. However, the entire administration is lined with men like Geithner. So, what is the chance of real reform, or real change? NONE, as far as I can see.
Neal Wolin is the Deputy Secretary of Treasury, and he, too, comes out of the Clinton administration -- he was general counsel to Larry Summers, and was sworn into his position, as part of the Obama administration, on May 19, 2009. They are all interchangeable, aren't they?
"If $9 million is "taking a bullet,'' then there really is no hope to close the gap between Wall Street and Main Street..."
If $9 million is taking a bullet, SOMEBODY SHOOT ME!
Bastards.
What's wrong with Wall Street bankers feasting on $145 billion in compensation? It must be hard work buying and re-programming all those politicians.
Hmmm
Once again a writer takes liberty with the truth by stating the national unemployment rate is 10%. Come on people virtually everyone outside the beltway acknowledges that the true rate is hovering around 20%. Stop sugar coating the actions of these SOB's. They are as a group, the worlds best crooks. I am so sorry, that is after the Federal Reserve, which has managed to steal literally trillions from the American people.
Those who say $9 million in compensation is "taking a bullet" are compensation specialists, who make their living telling boards of directors of corporations that the executives deserve lots of money for all the work they do.
If these guys said anything else, they would not be hired by boards, and would have to work for a living.
Call me the corporate devil but if you know how to exploit the capitalist system, you're a winner. Let the markets decide who to divest and layoff the tax raising.
Its no longer clear to me that the markets know where they are going. They seem to be going to a place good for markets, and bad for people.
The "too big to fail banks" are not exploiting the capitalist system through some intellectual alchemy, they are the gate keepers for money, all transactions, for debt (i.e. interest payments). The Federal Reserve, that has the power to print money, control interest rates and regulate/police financial transactions is literally owned and operated by these banks.
The game is rigged. There is no free market. Banks don't practice capitalism. The Federal Reserve is not federal and has no reserves, it should not be a private corporation.
Well said: it is definitely a rigged market overvaluing, surprise, surprise, money-men and undervaluing everyone else. These people positioned themselves on capitalisms jugular vein and threaten to squeeze. This doesn't make them the heart, or the head, of our economy.
Your not a corporate devil, your a corporate douchebag.
It should be obvious that, since Reagan, the children have been taking the bullet. What part of the $11 trillion debt and ruined economy that Bush handed to Obama a year ago constituted a 'present' to the next generation?
Of course Wall Street is rewarding itself: they are too big to fail. And Main Street's children are sucking it up: they are too small to succeed.
When Dwight Esienhower was President the top tax rate was around 90% after about the first $400,000. President Kennedy lowered the rate to 70% but closed many loop holes. Boxer and Webb want only 50% for only the ones who took tax payer money and only on bonuses! Something is definitely wrong here!
Currently the top rate for the rich is 35 percent, but few pay that much thanks to tax havens and shelters and tax loopholes. They still pay 34% of federal revenues.
(The top rate was 91%, nitpicky Gary.)
Gary
“If you can afford a vacation home in Florida, you should be able to pay the taxes.”
-- Ken Wilkinson
So how did all that "Success For All" reading programs work out for ya, in the Boston schools??LOL Must be, not well or we would have heard about it as a national model for reading instruction. Last studies I paid attention to, claimed that achievement was a result of instructors/people, not "canned" programs. Nothing new to we, teachers.
"But at least, when Wall Street 'takes a bullet,' it could do so on behalf of the schoolchildren of America"
Hear hear. The schoolchildren OWE WALL STRUCK for the privilege/prestige they inherit. All praise to DAS KAPITAL!!!!!
Taking a bullet is the right idea. It's the execution of the phrase that's in error.
What's been done by Wall Street and the economic terrorists therein is treason, plain and simple. And there is a penalty for that.
I hope Blankfein ends up spending all his ill gotten gains on security. This man will never be able to go out in public again. HEY LLOYD, THANKS TO CSPAN WE ALL KNOW WHAT YOU LOOK LIKE NOW!!! BE AFRAID. BE VERY AFRAID!!!
Dear Wall St. and Financial Pooh Bahs:
You really have to worry about the education of the children of this county, and taking money from the country is not the way to do this, because in the end, the pennies you save will not compensate for the life you lose. Let me explain.
If our country grows more illiterate, then no matter what wonderful schools your kids go to, they will still have to interact with the uneducated children of the of the rest of the country. This doesn't bode well for any of us.
So... the housekeeper, who can't read and doesn't know any science, will mix cleaning powder and bleach, and gas herself and the rest of your family while cleaning your 6.2 bathrooms
The mechanic, who can neither think, nor read, is too frightened to tell the head mechanic that he doesn't know what he's doing ( in fear of losing his job) so your whole family travels to Colorado for snow season and is killed in an unfortunate slide down a slippery peak when your car's brakes fail.
The chef, who went to one those quickie restaurant colleges, accidentally uses toad stools instead of mushrooms while working for a caterer for your kid's graduation party, and half the guests die.
I suppose that I could go on, but the " no man is an island", or more precisely, no occupation is an island, should really make you think over the country's future, and with it....your own.
Next time one of these monstrosities of a corporation starts to fail. Let it almost fail and have the government, instead of bailing it out, buy the stock for pennies. Then, we-the-people can break it up, fire whoever, and keep any excessive profits upon recovery before returning it, whole or in pieces once again, to the auction block.
It is my understanding that the Massachusetts state legislators are going to be voting on opening a State-Owned Bank. If they did, it would benefit taxpayers, pension funds, small business, etc., instead of the Wall Street banking predators who pay themselves $Billions in bonuses every year while they destroy the country.
With a State-Owned bank, the profits could be spent on education and creating jobs instead of giving it to the greedy slime on Wall Street.