Democrats & Liberals Archives

Bonuses? Really?

You know it’s bad when Doonesbury (link) does a piece on it. The Wall Street greed-is-good gang announced this week that it gave themselves, something north of, $18 billion in bonuses for 2008. Sure you can give out money, when the government finances it.

Obama called them ‘shameful’ (link); I call thievery.

What level of audacity does it take to give yourself a bonus, when you’ve underperformed? How much brashness does it take $700 billion dollars of taxpayer money and give yourself a bonus for a job well done? All this while the world, the press and the taxpayers of the country watched their 401ks and Pension plans disintegrate into vapor. The press, rightfully so, screamed about accountability for the money. Obviously, no one listened.

At an average of $115,000, these Wall Street thieves awarded themselves a bonus higher, more than double in fact, the nationwide salary average (link). This while the housing market plummets because of the façade that they themselves, the same Wall Street Thieves, erected.

It's time that we tell our government that this time of behavior won't be tolerated anymore. Call your Congressman, Senator or President today; tell them what you think of these fatcats taking bonuses from public money.

Doonesbury was right… ‘that’s just cuckoo’.

Posted by john trevisani at January 31, 2009 8:03 PM
Comments
Comment #274709

And they say tv doesn’t influence people! Huh!

Posted by: Weary Willie at February 1, 2009 7:18 AM
Comment #274710

We all think we’re Homer Simpson.

Posted by: Weary Willie at February 1, 2009 7:20 AM
Comment #274711

There’s more.

Banks sought foreign workers

Posted by: womanmarine at February 1, 2009 7:21 AM
Comment #274713

Doh!

Posted by: Weary Willie at February 1, 2009 7:30 AM
Comment #274716

People,
This is America and if you really want to see these fools change their ways than disinvest any company who wants to pay their top executives bonuses. For I do believe that the Broad of Directors and Stockholders of these companies would sing a different tune if their company Black Listed by Consumers and Future Investors.

Do you think that is why no comprehensive list has been created by the Main Stream Media?

Could you see what would happen if a slogan such as “No Dollars for Bonus Hunger Executives” would accompany a grassroot movement to get people from using these companies?

Posted by: Henry Schlatman at February 1, 2009 8:15 AM
Comment #274717

Weary Willie-
Let’s review the intelligence of this: whether or not you believe in the free market, the undeniable fact is that many of the banks handing out these bonuses did poorly this year, so poorly in fact, that they asked for taxpayer dollars to bail them out

And now they’re handing out bonuses?

The excuse they give is the need to retain talent. What, the talent to lose money? To take fruitless, excessive risks? Well, if that’s the talent that Wall Street has felt comfortable encouraging, it’s no wonder the stock market crashed.

It’s one thing for them to engage in this stupidity with their own money, to encourage further idiocy at their own expense. But this seems to be an industry-wide example of moronic behavior, and they’ve done it this time with taxpayer dollars that they needed because of just what wonderful performance their talent showed in the last few years.

What kind of suicidal idiocy is it for capitalists to reward those who have handled their client’s money poorly? And what is so damn conservative about apologizing for those capitalists who, having availed themselves of taxpayer dollars aren’t using it to remain solvent, but instead to line the pockets of morons and incompetents?

Ultimately, you have to ask yourself a question: is conservatism about building strong institutions and maintaining strong values across the board, or is it about supporting an ideology that rewards failure because those in charge don’t want to dirty their hands by putting their foot down.

(And Stephen wins the mixed metaphor of the day award!)

Posted by: Stephen Daugherty at February 1, 2009 9:14 AM
Comment #274724

ONLY when it is a crime to exercise unbridled greed at the public trough, and such WHITE COLLAR crimes are prosecuted and punished more gravely than the commensurate blue collar crime of theft, then, and ONLY then, will this greed and psychology of white collar entitlement disappear from American culture.

Democratic and Republican politicians have for centuries however, deferred and turned a blind eye of injustice toward white collar crime, and the result is our current Wall Street white collar psychology of justified greed born of entitlement, fostered and developed to expertise in the Ivy League schools of Harvard, Princeton, and Yale, where the good old boy network of future captains of government and industry are taught an allegiance to each other and their common manifest destiny, that results in a mutual protection society wherein, government protects wall street execs and vice versa, and commuted sentences and pardons are as common as buttercup flowers in a Spring morning field, in the rare circumstance when convictions are pursued and obtained.

This is the true reason we continue to be plagued with reincarnations of the Chrysler bailout and Savings and Loan Debacle. Can anyone say John McCain and rationally and intelligently argue against what is revealed in this comment?

Posted by: David R. Remer at February 1, 2009 12:08 PM
Comment #274730

Where is the outrage for the oil profits and those that benefited from them?

Should we be going after professional atheletes at this time because we see ticket prices increase, even during the recession? These sports teams should be held to account and ticket prices frozen and salaries and bones frozen.

Variable compensation is part of incenting executives to perform and pay. Should the government decide this or the shareholders? The shareholders and executives compensated by stock options have lost in this as well.

The bonus payout represents the risk they take, the agreed upon compensation between employee/company, and the companies ability to pay this. What is not pointed out here is that compensation on Wall Street is majority variable compensation. Perhaps there is an issue there too? Let’s not pay for performance, it inspires risk too.

In the WSJ op ed, “Idiots Indeed” you see the following”

“A few quick facts about Wall Street bonuses. The pretext for the political outrage was the New York comptroller’s report this week on the aggregate data for bonuses in 2008. That “irresponsible” bonus pool of $18 billion was for every worker in the New York financial industry, from top dogs to secretaries. This bonus pool fell 44% in 2008, the largest percentage decline in 30 years. The average bonus was $112,000; bonuses typically make up most of an employee’s salary on Wall Street. The comptroller estimates that this decline will cost New York State $1 billion in lost tax revenue and New York City $275 million. Both city and state may have to announce layoffs.”

It would seem to me that based on the logic in this discussion thread they should not only be barred from incentives this year, but we should collect from their collective arses boing back several years.

Do they owe us? I for one think that regulation of incentives will lead no where. The broader issue is probably investment and security complexity. Bonuses and variable compensation should remain legitimate parts of an economic system designed to grow and reward.

Then again I work in the credit union industry and continue to benefit from these times.

Posted by: Honest at February 1, 2009 2:58 PM
Comment #274751

Honest-
Maybe there’s sense to some bonuses when we calm down for a moment, but the WSJ, as is typical, apologizes too broadly and too swiftly for the culture on Wall Street.

To wit:

Minow, an expert on boards of directors, noted that boards approve all bonuses. All too often, she said, they were not rigorous enough in their review or smart enough to understand their company.

As an example, she cited Bear Stearns, the first big investment bank to fail and a voracious consumer of subprime mortgages, which the bank packaged and sold to great profit.

Bear Stearns executives got their bonuses based on the quantity of mortgages they securitized, Minow said, not the quality.

Further, she said, even though the BearStearns board set up nine criteria on which to evaluate executive performance, it could award bonuses even if none were met.

The bonuses cannot be justified on grounds of their tax revenues. Were it not for the TARP plan, those revenues would not be there, period. The real question here, is who’s getting the bonuses, and why.

Wall Street folks need to maintain residence in this world, where people have seen the economy collapse in a matter of months for no good reasons, and have been bailed out at taxpayer expense. This would be a curiosity alone, were American taxpayer dollars not the source of these bonuses.

Maybe it’s high time, though, that Wall Street reforms its bonus structure, that compensation in general in this country be not limited so much as better governed, with proper disclosures, prevention of conflicts of interest, and all that nice stuff. CEO and executives have been acting like a bunch of inbred aristocrats, complete with a sense of entitlement to compensation regardless of whether they do right or wrong by their corporations.

It should be simple in a capitalist system: do well, we pay, do poorly, you pay, with your compensation, your status, or maybe even your job. And if you get a parachute, having been kicked out, it won’t be golden. If you get it. There should be no difference in the level of ceremony between kicking out that teenager who was caught sleeping on the job, and the executive who does the same.

For too long, there’s been this notion that folks higher up should be held immune to such consequences, that somehow education, social status, and other qualities mean such consequences are unnecessary, that left to themselves, they would learn from their mistakes.

But what happens with mistakes that are swept under the rug, or which are never admitted to by the ones committing them?

Posted by: Stephen Daugherty at February 2, 2009 12:07 AM
Comment #274752

Sorry. The quote should read:

Minow, an expert on boards of directors, noted that boards approve all bonuses. All too often, she said, they were not rigorous enough in their review or smart enough to understand their company.

As an example, she cited Bear Stearns, the first big investment bank to fail and a voracious consumer of subprime mortgages, which the bank packaged and sold to great profit.
Bear Stearns executives got their bonuses based on the quantity of mortgages they securitized, Minow said, not the quality.
Further, she said, even though the BearStearns board set up nine criteria on which to evaluate executive performance, it could award bonuses even if none were met.
Posted by: Stephen Daugherty at February 2, 2009 12:09 AM
Comment #274819

Stephen Daugherty,
My goal was at humor, an attempt to draw a parallel between the irresponsibility of Homer Simpson at his job at the nuclear power plant and the irresponsibility of those people in the financial industry john trevisani points to. Neither are being held accountable. Both keep their jobs.

What level of audacity does it take to give yourself a bonus, when you’ve underperformed? How much brashness does it take $700 billion dollars of taxpayer money and give yourself a bonus for a job well done?
This while the housing market plummets because of the façade that they themselves, the same Wall Street Thieves, erected.


David R. Remer said it quite well when he writes;

ONLY when it is a crime to exercise unbridled greed at the public trough, and such WHITE COLLAR crimes are prosecuted and punished more gravely than the commensurate blue collar crime of theft, then, and ONLY then, will this greed and psychology of white collar entitlement disappear from American culture.

Simply put: It must be a crime first! There’s been alot of discussion about this and that act that lies at the root of this problem. It wasn’t a crime to construct this environment! Who’s fault is that?

Again, I yield to David R. Remer for this statement:

Democratic and Republican politicians have for centuries however, deferred and turned a blind eye of injustice toward white collar crime, and the result is our current Wall Street white collar psychology of justified greed born of entitlement, fostered and developed to expertise in the Ivy League schools of Harvard, Princeton, and Yale, where the good old boy network of future captains of government and industry are taught an allegiance to each other and their common manifest destiny

Stephen Daugherty, given a third party option that promotes a foolproof solution to our current dilemma, would you pull your support from the Democratic Party in favor of that third party?

Posted by: Weary Willie at February 2, 2009 6:28 PM
Comment #274827

Weary Willie-
I don’t deal in foolproof solutions, because fools, for all their stupidity, are pretty good at turning the foolproof into the just plain foolish.

I’m not looking for perfection, but improvement, and I think my current party is capable of it, or at least more inclined after I, and others like me, give it a good ass kicking. The Republicans simply aren’t interested in being held accountable, nor holding anybody else as such. When they show some signs of improvement, I will welcome their counsel and advice.

But a third party? I know it’s a bit of a Catch-22, but I’m not going to support any plan from them until I can be certain that the people involved know what they’re doing. I also don’t believe you can escape a culture of corruption by fleeing to one party or another.

I’m not a registered Democrat because I believe the party is perfect, but rather because it’s policies and positions reflect my preferences the best. But that doesn’t mean that I’m satisfied with leaving the party as is. I want our people to do their jobs. I didn’t vote for these people for them to sit like a bump on a log. I will hold them accountable, and ask that others do the same.

Posted by: Stephen Daugherty at February 2, 2009 9:02 PM
Comment #274832

Don’t you ever get the impression you’re being duped?
How can one political party maintain control of a country for most of it’s existance without manipulating it’s population? The Democratic Party is proud of being the so called “longest living party in American History!” Given the fact that the Democratic Party has controlled this government thru-out it’s history (and much more so before it’s conception) wouldn’t you assume the Democratic Party should share some of the responsibility? If it isn’t the Democratic’s fault then who’s is it?

Why is the Democratic Party so reveared as the only alternative, the only safety net between everything else? How can it be so for over one hundred years and not bear any responsibility for our situation?

Posted by: Weary Willie at February 2, 2009 10:11 PM
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