One of the guests on Meet the Press this morning defended the current round of bonuses by saying the people just don't understand that the bailout did not fund the bonuses. All this "populism" on the part of outraged Democrats is, therefore, out of hand. The money, it was claimed, did not go directly from Treasury or the Fed to Wall Street's personal accounts.
But, in fact, for all intents and purposes, yes it did. The money did not go directly into the bankers' personal accounts, no. But all the bailout efforts did stem what would have been far more damage -- much bigger losses on Wall Street, at banks, and at hedge funds. In particular, the Fed's actions to shore up the commercial paper market and the money market funds, and to take as collateral all kinds of debt to supply reserves, reduced further losses on the Street, enabled some markets to function, and provided the potential for some to profit. It probably even kept stocks from falling farther.
Just ask yourself this. Would there have been all that money around to pay the huge bonuses this year had the Treasury and the Fed not stepped in with hundreds of billions of dollars? Of course not.
And that is why everyone is angry. With good reason. The bonuses, despite claims otherwise, were indeed a shame.
You have to realize that these people create money. They get a share of whatever money they bring in. If they successfully bring in millions of dollars of taxpayer bailout funds, giving them 1% of that is only fair.
/end snark.
Sorry, had to make a snarky comment, but didn't want to risk anyone thinking I actually believed the above BS.
This is the same 'lame' arguement made a few years back when the Republicans claimed that Government monies funneled through "Faith Based" charities were not being used by those charities to further their religious agenda,...
No, the Government wasn't writing them a check to underwrite their preaching their version of the Gospels,... but by writing them a check, we enabled them to shift money they otherwise would not have had to do so.
More sign of a mental disconnect between these politican's core voters, and reality. The Politicans know they are spewing crap,... but their voters are too dim, or too part of their movement to see it.
Of course it did. Without teh bailout, the money used for bonuses would not have been available and would have had to be used for the purposes that teh treasury money was applied. Ergo: teh treasury DID fund those bonuses.
Jail time should be forthcoming for whoever approved those bonus decisions as it effectively means that the statements made in requesting government bailout funds constituted fraudulent misrepresentations made to the government. In other words, theft by fraud.
but there was no intent to defraud, just gamble and enrich themselves....
Granted, our track record for stupidity is fairly impressive, but I believe (hope!) that is changing. Now that the US consumer is finally waking up and paying attention it will be harder and harder to pull the wool over their eyes.
Yes, sadly they do think that. Ever sadder,... some of us are that stupid.
The reason the bonus payments are shameful is because they are the opposite of capitalism.
What this means is that the banks are saying: it's the taxpayer's job to save capitalism. And they will, because they have to, because it's in their interest. So we can take a little extra off the cherry on top.
THIS is what's sickening.
Except that it goes even further: because it's not even possible to kick the bankers out on the street, because then the economy will suffer even more.
What this means is that bankers have now officially arrived at the status of feudalists.
Wonder how long that will last. As long as feudalism?
WTF? 70% of the Wall Street banks' expenses are people costs; Paulson approved this plan and he put the limitation on CEO and executive bonuses.
The bonus payouts were for people below the senior exec. level. Did the NY State comptroller say how many people received the bonus money compared to last year?
By the way, the bonus level last year was $30 billion.