Originally Posted By Kennesaw Tom I first read about this yesterday and thought I would create a thread here. <a href="http://news.xinhuanet.com/english/2009-01/30/content_10735133.htm" target="_blank">http://news.xinhuanet.com/engl...5133.htm</a> <<The New York Times reported on Thursday that Wall Street bankers had collected an estimated 18.4 billion dollars in bonuses for 2008, the sixth-largest haul on record. "The American people understand that we have got a big hole we have got to dig ourselves out of but they don't like the idea that people are digging a bigger hole," said Obama. "There will be time for them to make profits, and there will be time for them to get bonuses," the president stated. "Now is not that time.">> This must be Wall Street's way of saying to the rest of the country, Let them eat cake!
Originally Posted By Mr X I saw an interesting comment on this by a lawyer who recommended that the Federal Government demand that all those 18 billion dollars (or at least whatever portion of it was dolled out by TARP recipients) be paid back to the American people. Apparently, they can do that when you allow your business to go into the toilet and then ask the government to help you out! Go figure (I hope they do just that!). I wonder how the bonuses for 2009 will look...
Originally Posted By SuperDry <<< Apparently, they can do that when you allow your business to go into the toilet and then ask the government to help you out! Go figure (I hope they do just that!). >>> That certainly is a general concept in bankruptcy. I'm not sure what the legal terminology is, but let me explain what can happen: a company that's about to go bankrupt for whatever reason decides to use its last remaining cash in a way that lopsidedly benefits one creditor over the rest. Let's say a company owes 10 vendors $100,000 each, but only has $100,000 left. If it decides to pay off one vendor the entire amount, leaving the others high and dry (perhaps that vendor is run by an old college buddy), the bankruptcy judge can come in after the fact and demand that that vendor pay back the money, so that it can be distributed more equitably among the creditors. I don't know how far back the bankruptcy judge can go or how "inequitable" things have to be before he can order such a remedy, but I do know it can happen. And, I don't know if it's the same or different legal mechanism at work with the TARP money, but I suspect the general concept is the same.
Originally Posted By alexbook The business pundits were pointing out yesterday that this is a 44% cut in bonuses from 2007, and claimed that the New York City economy is suffering because Wall Street workers have less money to spend. Not sure I buy it, but it is another way to look at it. Here's the Times's article on the subject. Seems the state of New York is investigating bonuses at Merrill and BofA. <a href="http://www.nytimes.com/2009/01/29/business/29bonus.html?bl&ex=1233464400&en=5bd41c19514c4845&ei=5087%0A" target="_blank">http://www.nytimes.com/2009/01...=5087%0A</a>
Originally Posted By SuperDry <<< The business pundits were pointing out yesterday that this is a 44% cut in bonuses from 2007, and claimed that the New York City economy is suffering because Wall Street workers have less money to spend. Not sure I buy it, but it is another way to look at it. >>> I can totally believe it. Whether the Wall Street people deserve the bonuses or not, if their income goes down 44$, it's going to have an affect on spending in NYC. Even if it's just at high end restaurants, department stores, or boutique retailers, all of those establishments employ working-wage workers, some of which may get laid off and others have reduced tip income. This isn't a justification for maintaining high bonuses - I just mean to point out that the economy is all interconnected.
Originally Posted By Kennesaw Tom I thought of a better anology. Nero fiddles while Rome burns. Many Americans have been good little citizens, they earned money, paid taxes, they have been good little investors and stuck their money in 401Ks, pensions and investments only to see them dwindle away. Americans collectively have lost over a trillion dollars of value in their various investments on Wall Street. I'm fairly young and more than likely financially recover from this "recession". But for many older Americans who will very financially recover from this recession this is their Rome burning. For them its over, they are in financial ruin. For Wall Street to give themselves bonuses while laying off left and right and in some cases going out of business in my opinion is criminal.
Originally Posted By Kennesaw Tom <I'm fairly young and more than likely financially recover from this "recession". But for many older Americans who will very financially recover from this recession this is their Rome burning.> This should read, I'm fairly young and more than likely financially I will recover from this recession. But for many older Americans, they will not financially recover from this recession and for them this is their Rome burning.
Originally Posted By Dabob2 As far as I'm concerned, any institution that accepted bailout money from the taxpayers and then gave their top people fat bonuses are giving them those bonuses with OUR money. It's just not right. Plus, it's not like a). their normal salaries aren't hugely inflated already; b). they had great years that would justify the granting of huge bonuses. Just the opposite, in fact. But they're accustomed to them and can't fathom not getting them, no matter how poorly they've done. So it's down from 2007 - big deal. It's still the 6th biggest bonus year on record, and it's not like that had the 6th best year on record. They're essentially paying those fat cats their bonuses with YOUR money, and mine. If that doesn't get you angry, I don't get it.
Originally Posted By DAR <<As far as I'm concerned, any institution that accepted bailout money from the taxpayers and then gave their top people fat bonuses are giving them those bonuses with OUR money. It's just not right.>> Which is why these bailouts need to stop. If a business fails it fails, let the market correct itself.
Originally Posted By DouglasDubh Here's an idea - if you're going to loan people money, and you want to attach strings to the way the money is spent, attach the strings before you loan the money, not afterward. Or better yet, don't loan the money in the first place.
Originally Posted By dshyates I believe that what these guys have done is so low it was inconcievable to people with the high ethics of politicians. Nut it was Paulson who subverted to oversight clause which only applied to loans that were auctioned. Paulson gave out the money WITHOUT the auctions. So it was Paulson who changed to rules AFTER it was signed into law. So why can't we enact a "clawback" measure.
Originally Posted By DouglasDubh <I believe that what these guys have done is so low it was inconcievable to people with the high ethics of politicians.> Thanks for the chuckle.
Originally Posted By Mr X ***Here's an idea - if you're going to loan people money, and you want to attach strings to the way the money is spent, attach the strings before you loan the money, not afterward. Or better yet, don't loan the money in the first place.*** No doubts there. How the heck Bernanke and Paulson managed to terrify the entire federal government into such idiocy is beyond me. Can't blame left or right on this one, just about everyone was in a tizzy (I'll go ahead and give certain congregational Republicans their due credit for attempting to slow down the panic).
Originally Posted By wahooskipper I'm not sure who it came from, but I like the idea that the CEO of a company that receives bailout money cannot make anymore than $400,000 (the President's salary) a year. It is time for accountability.
Originally Posted By Mr X As Douglas (rightly) said, though..if they wanted that they should've included it in the terms when they gave out the money. Retroactive anger is not fair, nor equitable. It's NOT the fault of the companies for saying "yes" to the terms and moving on...it's the fault of the LENDERS (in the case the U.S. of A) for not spelling out the terms and conditions of the loan whatsoever. Moralistic outrage is dumb. These companies are not "people", they act as an entity, based on the contracts, rules, and laws in front of them. They got the cash, they took it in and made use of it. Sort of like an animal, if you want to look at it that way. There is no "personality" here, and no soul or regretful feelings or any of the other anthropomorphic conditions we try to place on companies. They will react according to conditions and terms, and they have no "moral" reason to do otherwise since a company doesn't have morals.
Originally Posted By dshyates But the monies weren't leagally given out by Paulson. These companies should never have recieved the money. The law said all funds were to be distrubited through an auction process. And there was an oversight clause on the monies distrubeted through the auctions. After the law was passed that demanded auctions as the process of distributing the funds paulson decided that auctions wasn't going to work for him and he just gave the money to whoever he wanted. Doing the endo on the oversight clause. Paulson gave the money out illegally to not have ovesight. We were ROBBED.
Originally Posted By mawnck >>There is no "personality" here, and no soul or regretful feelings or any of the other anthropomorphic conditions we try to place on companies.<< That's the excuse they hide behind. No ethics and no patriotism - that's where I'd start.
Originally Posted By hopemax Will: Barbossa, you lying bastard! You swore she'd go free! Barbossa: Don't dare impugn me honor, boy. I agreed she'd go free, but it was you who failed to specify when or where.
