Wall Street, which created many of the Frankenstein-like financial instruments that either distorted and/or hid loan risk, and also in some cases encouraged the issuing of problematic mortgage forms, is not justified in paying bonuses, and certainly should not award them following the government's massive $700 billion bail-out of the industry, a sampling of U.S. taxpayers indicated.
One U.S. resident, Ken Karlson, a 61-year-old Vietnam War veteran who lives in Illinois told Bloomberg News, "I may not understand everything, but I do understand common sense." He added, "the bailout money should not have been given to them in the first place."
Economist Richard Felson told BloggingStocks Tuesday acrimony from U.S. citizens is not outlandish or unreasonable given the facts to-date of the current financial crisis.
"Here we have a massive taxpayer-funded government assistance program after the banks made huge mistakes, and now the banks will award huge bonuses?" Felson said. "Meanwhile, workers across America are being laid off and by-and-large told to fend for themselves. The double standard is glaring and absurd and you can see why the public is mad."
In January 2009, the new U.S. Congress is expected to review bonus packages of banks and institutions who received assistance, Felson said, but the public should not expect too much.
"It's difficult for Congress to concentrate on more than one issue at a time and this winter Congress will have several issues on its plate, the stimulus package, assistance for auto manufacturers, energy policy, and possibly health care reform, so Wall Street bonus scrutiny may not receive proper attention," Felson said. "And if it doesn't that would be a slap in the face to U.S. taxpayers."
Public Policy / Economic Analysis: Few in public policy circles want to eliminate incentives for good work, but the glaring point in 2008 is that there has been little good work on Wall Street this year. The economic upheaval that Wall Street help create, combined with their need for a taxpayer-funded rescue, makes it impossible to reconcile bonuses. Hence, Congress should act to eliminate them and/or get the bonuses repaid.
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Reader Comments (Page 1 of 1)
11-11-2008 @ 10:28AM
Jason said...
I agree. Bad performance = no bonus.
www.eeinvesting.com
11-17-2008 @ 11:33PM
stardougf said...
When does this bonus and party stuff end at AIG. Is there someone to stop it?
11-11-2008 @ 11:29AM
bigbirdbb said...
how do you pay bonuses when your firn or company is going belly up.lets get in the real world!
11-11-2008 @ 4:39PM
Dave said...
I agree,cut all bonuses to Zero due to lack of performance and we should also foreclose on any homeowner in default due to lack of performance. Why should my tax dollars help out some investor who watched one too many episodes of "Flip this House"? In the real world if you can't afford your mortgage you get foreclosed on. We need to values in the housing market to come down to manageable levels. The markets is being artificially held up by the government when it should be dropping like a rock.
11-11-2008 @ 11:44AM
BHarrison said...
The German government had the "common sense" and integrity to require that any corporation taking "bailout money" had to agree and comply with 1) capping CEO and management salaries, 2) FREEZING all bonuses for management.
It is an OBCENITY and UTTER CORRUPTION for Congress to allow the payment of any "bonuses", unwarranted CEO and upper managment salaries to be paid out of the BAILOUT monies. There can be NO LEGITIMATE BASIS for paying "bonuses", etc. These inept and corrupt management personnle should be FIRED . . . and where would they find employment elsewhere??? Bonuses. . . no way?
11-12-2008 @ 11:23AM
Virgil Bierschwale said...
Here is an article titled "Polls" that I wrote this morning that pretty well sums everything up. You might also want to read the letter I sent into my state and federal representatives this morning at http://www.KeepAmericaAtWork.com and send in a copy from yourself to your representatives.
article follows ===
Polls,
You love them or you hate them or in my case, you distrust them because they don't provide the detail so that you can verify the accuracy of the data.
But on the other hand, I'm noticing some interesting things in the "Employed" poll that I am running this month.
As of right this minute we have:
19 employed for 57.6 %
7 unemployed for 21.2 %
5 looking for 15.2%
2 gave up for 6.1 %
Now according to the cia's web site we have about 300 million people in america, so lets divide that into 3 age groups.
Lets make the assumption that 100 million are under the age of 18 which leaves 200 million.
So we have an age group from 18 - 98 and 200 million people
A lot of people either retired at 65 or possibly were forced to retire at 65 which leaves from a total of 70 working years:
33 years of retired people and
37 years of working people
That is awful close to 50 % this early in the morning.
So these rough numbers tell me we should have 100 million working and 100 million retired as approximate numbers.
Now I read in one of the government reports a while back that our government uses 150 million workers which makes me wonder how they arrived at that number, but thats another topic at a later date.
So we have 100 million workers, now lets deal with the numbers above and we'll add the 19 employed and the 5 looking for a total of 24 working and we'll add the numbers of 7 unemployed and 2 gave up for a total of 9
So now we have the numbers of 24 and 9 which gives us 33
So now we will divide 100 million by 33 and we get 3,030,303 per number
So now we're going to multiply 3,030,303 times 24 and we get a working population of 72,727,273
And now we're going to multiply 3,030,303 times 9 and we get a unemployed populaton of 27,272,727
Damn, does that give us an unemployed percentage of 28 % instead of the 6 % our experts are telling us.
Now do you see why our economy and the economy of all the democratic countries is suffering right now ?
As for you other democratic countries, run the numbers on your own country and if your leaders have followed America's lead and sent your jobs offshore, then that will explain why you're going through the same problems we are.