Bank Profits, Banker Pay and Other Banker Tricks

I'd like nothing more than to give the bailout scandal a rest - but
the bankers won't let me! They just keep coming at us with
ever-more-clever inventions of greed and deceit.

Their latest bit of hocus-pocus, accompanied by big puffs of smoke,
is a dazzling show of profits. Yes, Goldman Sachs, Citigroup, Bank of
America, JPMorgan Chase and other financial giants that only yesterday
were insolvent basket cases now report that - poof! - in the first
quarter of this year, they magically produced blockbuster profits.
Absolutely A-mazing!

Of course, it's a con job. After all, magicians don't perform magic. They create illusions.

Hoping to con investors and the public into believing that the
wizards running Wall Street have quickly and brilliantly restored these
banks to financial health, the wizards did exactly what they've done in
the past: They goosed up their books with accounting tricks and
sleights of hand.

First - and most obvious - the "profits" are made possible only
because you and I have stuffed the banks with massive infusions of tax
dollars. Indeed, they wouldn't even be standing without our money. I
don't mean merely the $700 billion straightforward bailout approved by
Congress, but also the nearly $2.5 trillion in such backdoor subsidies
as dirt-cheap loans and government guarantees quietly extended by the
Federal Reserve and the Treasury Department.

Second, the banks lobbied for and won a regulatory break that lets
them pretend that all of those bad housing investments weighing down
their books like a load of toxic waste are worth ... well, worth
whatever the bankers say they're worth. So - Shazam! - huge losses are
wiped clean by banker fantasy.

Then there are special little puffs of smoke used by particular
banks. For example, Goldman Sachs (which has us taxpayers on the hook
for more than $50 billion in its bailout package) breathlessly
announced a dazzling profit of $1.8 billion for the first quarter. The
dazzle dimmed, however, when it was learned that Goldman had altered
its definition of "quarter," shifting its normal December-to-March
quarter ahead one month, thus disappearing December.

That was a month in which the bank lost $1.5 billion, so scrubbing it gave the revised calendar a neat banker buff job.

Meanwhile, these same bankers are using their miraculous profit
numbers as an excuse to - guess what? - bulk up executive pay checks!
While the Obama administration has imposed some limits on the pay of
the very top executives of bailed-out banks, the CEOs expect to be out
from under these restrictions before long. So, to take care of
themselves - and to restore Wall Street's sense that investment bankers
are the most deserving people on the planet - they are now setting
aside billions of dollars to be distributed at the end of the year as
executive compensation, including the return of outlandish bonuses.

Goldman Sachs leads the pack, having reserved $4.7 billion to cover
such compensation just for the first three months of this year. "We
need to be able to pay our people," barked a Goldman spokesperson.
Well, yes, but at the rate of nearly $5 billion per quarter, every
banker in the firm would average $569,000 - and, of course, top
executives would draw many times that average.

Can these guys (and they are mostly guys) even spell "outrageous"?
These set-asides would return Wall Street to the bloated 2007 level of
gilded greed that perverted its ethics and led to the crash that has
swamped us all. Meanwhile, every billion dollars snapped up by the
self-absorbed bankers is a billion that doesn't go into loans to help
our economy, doesn't go to repayment of the federal debt run up by the
bailout and doesn't go to shareholders who've lost huge sums thanks to
these very bankers.

As Chaucer once said about goats: They "stinken."

This is proof that Wall Street bankers have learned nothing. It's
also proof that Barack Obama's present bailout policy of saving the
bankers must go, and that the bankers themselves must go. Otherwise,
they'll just keep robbing us.

To connect with a grassroots campaign to bring real structural change to Wall Street, go to www.anewwayforward.org.