While everybody is quivering in righteous populist anger over the impending restrictions on corporate pay and bonuses for the most bailed-out corporations, Goldman Sachs is salting away a bonus pool of, well:
Of course, GS leadership (at least that much of as has not been recruited to run the Fed and the Treasury Departmet) asserts that it should be exempt from government regulation because it has paid back all $10 billion in government bail-out money.
That, of course, begs a few important questions.
Like how much other Federal money has GS benefited from?
So the reality is that GS has received $45 billion (at least) in State assistance, and has only paid back $10 billion.
As a corporate welfare case, Goldman Sachs gives the lie to the idea that we have anything like a free market in the United States.
And they've done quite well:
Let's play that back again--$167 billion in cash reserves and has not been required to cover the other $35 billion in Federal bail-out money?
For clarity: I have no problem with huge profits in a free market, but when one corporation has (a) an incestuous relationship between its leadership and the economic directorates of the Federal government; (b) the luxury of not returning $35 billion in Federal assistance even though sitting on massive cash reserves; and (c) benefited from bold speculation with cheap, newly printed dollars and Federal support, this is NOT my definition of a free market.
As Wall Street firms typically do, Goldman set almost half that sum aside to compensate its workers. Through the first nine months of 2009, the firm socked away $16.7 billion, enough to pay the average Goldmanite $526,814.
The bonus pool is on pace to hit $21 billion for 2009, which would match the record bonus payout of 2007.
Goldman said it won't decide the size of the bonus pool till year-end. In any case, the payments will be substantial -- and will come just one year after huge sums of taxpayer dollars were funneled to financial institutions.
Of course, GS leadership (at least that much of as has not been recruited to run the Fed and the Treasury Departmet) asserts that it should be exempt from government regulation because it has paid back all $10 billion in government bail-out money.
That, of course, begs a few important questions.
Like how much other Federal money has GS benefited from?
It was one of the nine big banks that received loans from Treasury last fall. It received $13 billion in the costly, widely questioned September 2008 rescue of insurer AIG (AIG, Fortune 500). It has sold $22 billion in federally guaranteed debt under a plan the feds started to restore capital markets activity. And it has been a major beneficiary of the low interest rates the government has adopted in hopes of restarting the economy.
So the reality is that GS has received $45 billion (at least) in State assistance, and has only paid back $10 billion.
As a corporate welfare case, Goldman Sachs gives the lie to the idea that we have anything like a free market in the United States.
And they've done quite well:
While Goldman churned out $3 billion in profits in the third quarter, the economy shed 768,000 jobs, and home foreclosures set a new record.
More than a million Americans have filed for bankruptcy this year, according to the American Bankruptcy Institute. A September survey of state finances by the Center on Budget and Policy Priorities think tank found that state governments faced a collective $168 billion budget shortfall for fiscal 2010.
Goldman, by contrast, is sitting on $167 billion in cash, in the name of making sure it can withstand another market meltdown if that day comes.
Let's play that back again--$167 billion in cash reserves and has not been required to cover the other $35 billion in Federal bail-out money?
For clarity: I have no problem with huge profits in a free market, but when one corporation has (a) an incestuous relationship between its leadership and the economic directorates of the Federal government; (b) the luxury of not returning $35 billion in Federal assistance even though sitting on massive cash reserves; and (c) benefited from bold speculation with cheap, newly printed dollars and Federal support, this is NOT my definition of a free market.
Comments
Well, a question was asked and off we went on a 40 minute tangent that ultimately led us to big bonuses for Wall Street types. I have to preface what I'm about to say by stating that I am in total agreement with this post...I believe GS is robbing Americans, and that their bonus structures and cash reserves are ridiculous.
When we arrived at the end of our tangent, I asked myself, "aren't big bonuses a good thing? Doesn't that put money in the hands of people who will spend it?"
What is your take?
Come on, Dana, I know you have at least one more round of bravado in defense of the boys down at Goldman...or at Treasury...as if there's a difference.
No problems with bonuses whatever for private companies as long as they are also subject to crashing and burning when they do really stupid shit.
When you accept government bail-out money and also place large numbers of your former employees [who have great stock options] into the Treasury Department, you no longer qualify as a private company in my opinion.
And I don't think government executives should be receiving bonuses.