My Conversation with Goldman
This week I had an opportunity most Americans would relish, just as I did. I was able to unload on two top executives of Goldman Sachs who descended from on high to my office because I clearly needed some educating. One was a Vice President and the other their Chief Risk Officer.
I had authored a letter on October 28, along with Congressman Peter Welch, that read, "We understand Goldman Sachs is expected to award its employees $21 billion in bonuses this year...Goldman Sachs is good at what it does, but its profits this year...were supplemented by the generous financial support of American taxpayers. In particular, Goldman Sachs benefited from a taxpayer payment of $12.9 billion from AIG on credit default swaps, insurance lending, and other contractual obligations between the two firms. AIG's payment to Goldman Sachs was, in fact, a taxpayer payment...Should taxpayers be repaid the $12.9 billion before bonuses are distributed to Goldman employees? We believe they should. We therefore urge Goldman Sachs to repay taxpayers the $12.9 billion it received from them through AIG."
The letter was signed "Sincerely" and I let them know just how sincerely I felt about it.
Amazingly, these visitors from another planet told me with very straight faces that I must realize that the $21 billion in bonuses were "accrued" bonuses. "Aaaaah," I nodded. "That will make all the difference in the world to my constituents who are losing their homes as well as their jobs." That's when I asked them exactly which planet they were in fact from.
"Forgive me for saying this," I said disingenuously, "but neither of you, as smart as you surely are, is worth 4,000 of my constituents," referring to the difference in the average salary of top executives in the financial sector and the average working person.
"Well we can't compare our employees with minimum wage workers," they pointed out. "We know that a $10 million salary sounds like a lot of money, but we are trying to get people who can make double that (that would be $20 million, I quickly calculated in my head) elsewhere. It's what the market demands."
Aaaaah, markets. Still, I resisted genuflecting. "I realize that you need to hire the kind of smarty-pants who truly understand complicated transactions like exotic derivatives and credit default swaps," said I, trying myself to sound like a smarty-pants, "but as I recall these are the very same people who almost brought down the entire global economy.
"Barney Frank," Chairman of the House Financial Services Committee and a bonafide smarty-pants, "makes $165,000 per year and he has done more to rescue our economy than anyone at Goldman Sachs. Or how about our CEO, President Barack Obama? He makes about $400,000, and lots of people would be willing to interview for that job."
By then I was furious and on a roll. "You are looking at one of the 57 members who voted against the repeal of Glass-Stiegel in 1999." That was the depression-era law that actually prevented financial institutions from becoming too big to fail by creating a firewall between the banking, insurance, and securities businesses. "And I am all for reinstating it, and I am from the school of, 'If you're too big to fail, then you're too big,' and besides all that, I am so far away from you in my thinking that your words barely compute, and from where I sit, you simply don't get it, and how stupid (yes I said the "s" word) can you be to think that any normal person can relate to "average" salaries for Goldman Sachs employees of $770,000 much less $21 billion in "accrued" bonuses," I sputtered as the bells rang in my office indicating a vote on the House floor.
No response -- just the same serious/tolerant expressions from the aliens. Then one of them thought of something. "We didn't ask for the bailout," he said hopefully. "And we paid the money back." Yes, after a record series of $100 million days and a record breaking $3.4 billion quarter, Goldman-Sachs, bless their hearts, paid us back. "But what about the $12.9 billion?"
"We'd like to tell you about that." The bells rang again. "I have to go vote now." "Would you be willing be meet again so we can tell you the valuable role that financial markets play in this country?" Now I'm silent, considering, then realizing that I'm actually enjoying myself. "OK" I finally respond. "We can talk but right now I'm out of here."
My only regret was that I didn't know at the time that Goldman Sachs had gotten for itself and its priceless geniuses H1N1 vaccines that lots of at-risk children are still waiting in line for. That would have been good to mention as I dashed out the door.
Arianna Huffington: Why It's Wrong When Wrongdoers Are Allowed to Admit No Wrongdoing
When corporate perpetrators don't have to admit they did anything wrong, it's as if the crime never happened. Which, of course, makes it much more likely that it will happen again.
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It's not rocket science-- raise taxes on these guys. And while you're at it, tell big Larry and little Timmy to quit acting like lap dogs.
Honestly, I couldn't care less about rhetoric. I pay attention to what is done.
Expressing outrage is fine and it's useless without action. I don't take the words seriously when they aren't coupled with meaningful deeds.
Unfortunately, this country is in the grip of crony capitalism and corporatism. I don't see that changing soon because so many politicians are the "career" sort who are primarily interested in wealth and power. The most wealthy and their lobbyists run this nation. They should just set up at auction house where the wealthy could go to bid on votes.
Thank you Jan for representing my district so well! And for saying everything I would have said to these greed balls myself. You're one of the few who stick up for the average American. ROLL ON!
It is time to pass a law limiting corporations. When they become large enough to threaten the country, split them up. And while we are at it, link maximum salaries to the minimum wage. All must prosper for the country to be healthy and stable. Greed has threatened the country before but this time it is taking us down. Most people don't realize how close we came to crashing.
Furthermore, since we allow corporations the luxury of being persons under our laws, we should get more vigorous about penetrating the corporate shield in cases of wrongdoing. Prosecute the upper management and board, seize their assets and some jail time would be good too.
Such arrogance! They deserve a good smacking upside their heads from every taxpaying citizen who doesn't work in Wall Street. Policemen, firefighters, teachers, nurses, EMTs, etc - they all deserve to make $770,000 even for just one year!!!
Thanks congresswoman . somewhere along the way in the last 30 years, we have lost our REPUBLIC. it's been replaced by a plutocracy. they have outsourced our jobs, totally bought CONGRESS with the exception of a handful of honest public servants of which i include you, BERNIE SANDERS and RUSS FEINGOLD. it's a sad ship of state. Somehow GOLDMAN SACKS, RUBIN and this elite cabal of CASINO DEALERS need to be at least hauled before CONGRESS and humiliated. Someone has to hold these money changers accountable . let KUCINICH take them down. he's unafraid to speak TRUTH to POWER.
Companies that are too big to fail can be broken up. The United States Supreme Court in 1911 broke up the monopolistic Standard Oil into 34 companies.
And broke up AT&T in the late 80's, as well.
"we need to understand America today as an extreme case of what the Marxist-Leninists used to call 'state monopoly capitalism' - a political regime in which the interests of monopolistic companies (in this case Goldman Sachs and Morgan Chase) become indistinguishable from the interests of the state and the elites running it."
That was Niall Ferguson in the 11/16 Newsweek. Wait! Ferguson said Russia, not America and Gazprom and Rosneft instead of Goldman and Morgan. Oh well -- six of one, half a dozen of the other.
H1N1 shots for GOLDMAN first in line, betcha! If any one of them dudes got sick and couldn't think and act clearly, could not upright do daily MBA educated million dollar bonus sweat shifts at the neighborhood corner sting table shifting shell game, reinventing exotic paper derivatives/hedge funds and packages of taxpayer guaranteed ribbon bundles of sweet toxics--more tangible, imagine, than a lovely chinese wind chime--or buying up mortgages and foreclosing home owners all by themselves, why, heaven help us! We done for! Left holding an empty bag. Or am I thinking of Merrill Lynch? Or BofA. Or JP Morgan. Or Chase? CitiBank? Group? Morgan Stanley? After all, according to bailout and first things first, they R us. Don't let them get sick for gosh sakes. Keep them mighty and well!
Rep. Schakowsky, YOU ROCK! I am so proud of you! We've got your back! Thank you, thank you, thank you and don't give up on getting back our $12B!
This cabal uses its privileges with the government to make usury profits. They brought down the economy with their greed and continue to hold down the rest of the financial system by diverting federal funds to their coffers. Their dollars go to derivatives, hedges and bonuses instead of financing the country's heartland businesses.
I hope you told Goldman Sacks visitors that you were for the removal and permanent ban on bailing them out no matter what happens. And since Goldman has failed in the past and needed bailout you had no reason to sit and listen to two incompetent managers who was with Goldman when they were given 20 billion dollars to save the bank. They are a failure and have proved it there should of been no further discussion.
Please correct me if I'm wrong, but isn't this the fault of Congress?
Plenty of people are "angry," but being "angry" doesn't get the job done.
Yes, this is the fault of Congress. Five years before deregulation, Sen. Byron Dorgan (D-ND) sounded the alarm about the unbelievable risks banks were incurring by instigating the toxic derivatives that caused the financial meltdown. BUT NO ONE LISTENED!
Where was the oversight that members of the House Banking Committee and the SEC were supposed to provide? They could have prevented the meltdown and this recession.
Congress must turn back he clock and re-regulate the financial institutions. They won't do it themselves. They are addicted to greed and will cause another meltdown down the road. Read my full article. Go to: www.tenthdems.org/newsletters/0905_nl.pdf
Follow the money -- I'd wager that the same members of those committees received campaign contributions and other benefits from the lobbyists & their employers in order for the members to turn a blind eye to the risky behavior.
It's all about greed.
Congress caved to the march of "free markets" so the deregulation that permitted the financial system to spin out of control is their fault, except for the 59 who voted against Glass-Stiegel in 1999. But that was only one of many contributors.
No one in Congress held a gun to the mortgage bankers to push toxic loans, largely a private market joined late by Fannie Mae and Freddie Mac. No one in Congress forced expansion of Credit Default Swaps into a global gambling parlor. No one in Congress told the credit rating agencies to lie about the risks of derivative bonds packed with toxic loans. No one in Congress demanded home buyers get greedy and step over the long-proven, traditional models of affordability.
Avoiding those market risks is what they pay the big bonuses for, right? Right? What makes it a difficult MBA-required "wise" decision to push teaser rates families could just barely afford at a time when interest rates were at generational lows and bound to rise quickly and harshly? Obviously, it takes more than a $10,000,000 bonus to find someone smart enough to say "no." I'd be happy to consult.
Great questions, but where are the answers? I can't believe you let them escape. They should have been locked in the room until they came clean.
The smiling submissives are beginning to awaken and when they do (well there are more of us then there is of Them )(and yes some believe Aliens are involved) there will be nowhere to hide.
Thanks for sending a wake up call.
Rep. Jan Schakowsky, thank you for your vote against repeal of Glass-Stiegel in 1999 - so few people realize it was the beginning of greatest ten years of crimes in human history - the looting of trillions of dollars with the the launch of these mad schemes that have wrecked the world economy. And if only more of our representatives had your brains and your fortitude and that integrity that demands a sense of outrage at what has been allowed to happen in the last ten years.
Yes, Glass-Stiegel must be reinstated. And let our finanical institution at least play by the same rules as the casinos do. You play with your own money and you pay all of your bets your self. And if you win, you pay taxes. Break these rules and you suffer.
I pray that justice be done.
The only "good" to come from this? Stick a fork in the Reaganomics that nearly ruined the global economy. We must now counter the revisionist history at every opportunity, and hope for a full recovery.
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