The people who put together, begged for, and then pushed the toxic instruments that got us into this economic mess don't deserve to be compensated a kingly sum for their efforts. Everyone knows that if you offer someone insurance and then fail to pay because there's no money in the bank (or collateral) there would be problems. In the legal world there would be criminal proceedings. In the underworld you would get whacked.
Yet, the clowns at Goldman Sachs, Morgan Stanley and JPMorgan Chase did exactly that. They created "insurance" for toxic products and then said, "We can't pay ... Oooops."
So why is it that we continue to see this?
The firms -- the three biggest banks to exit the Troubled Asset Relief Program -- will hand out $29.7 billion in bonuses, according to analysts’ estimates. That’s up 60 percent from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, equals $250,400 each, almost five times the $50,303 median household income in the U.S. last year ...These people would be out of work if we had let their industry collapse. We saved their bacon. Why are they getting bonuses? Oh, that's easy, according Michael Karp, co-founder of Options Group:
“Wall Street is all about creating wealth, and when banks start making money again, they have to pay their people.”I think it would be easier if I just went and banged my head against a wall.
Seriously, in what world does drowning an economy on bad bets and then sucking off the American taxpayer to finish the payoff constitute "creating wealth." This is akin to Al Capone saying, "Hey, I kept da' streets safe for merchants to make da' money ... I gotta pay my people ... so I extort."
Both Al Capone's gangsters and today's banksters participated in wealth extraction through fraudulent means. Both deserve to be in jail. Yet, the banksters are getting bonuses.
Al Capone's real crime was that he didn't work on Wall Street.
- Mark
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