Monday, February 16, 2009

Taxpayer Bonuses to Failed Bankers... Is Obama Serious??

Chris Dodd is s sneaky fellow. Towards the end of the stimulus package negotiations, he snuck a provision in, severely limiting bonuses for executives receiving taxpayer money through the TARP or in other ways.

Tim Geithner has filled his cabinet with ex-Wall Streeters, so he and the Treasury have been fighting, tooth and nail, against limits on executive pay, just like Paulson did. Dodd’s provision was meant to counter the Treasury.

Now Obama has sided with the Treasury, and is trying to come up with ways for taxpayer money to be paid to these executives.

On Fox News on Sunday, senior Obama adviser David Axelrod said that the administration will: “seek changes in the government's approach to executive compensation”. That can only mean one thing: Obama will refuse to implement to provisions that he will sign into law on Tuesday.

Obama is prepared to break the law in order to give failed bankers million dollar bonuses paid by taxpayers! As someone who supported Obama fully, I am now left speechless, only able to say: are you serious Obama!!??

If a corporation feels like its executives deserve multi-million dollar bonuses and is willing to pay that, I have no problem with that. And if that corporation keeps paying the bonuses even in the face of multi-billion dollar losses, that is also fine with me. It’s just stupid, and I don’t understand why the shareholders accept that.

However, when the corporation receives taxpayer money, it is very much my problem how that money is being spent.

This is a really, really serious crisis. In Florida, there are actual bread lines. In Nevada and California, local governments have designated and fenced in land for people who live in their cars, reminiscent of the “Hoovervilles” of the Great Depression. Food banks are out of food in the Northeast, and the beggars in New York City are no longer mostly made up of addicts.

The President of The United States is currently weighing these problems against the need for multi-million dollar bonuses to failed bank executives. You have to ask yourself if he has lost his mind.

The heat is turning up in the battle for taxpayer money and the continued roll of Wall Street in the American economy. On outlets for Wall Street employees like CNBC and Fox News, the rhetoric is really changing dramatically.

The financial sector seems united in a battle against taxpayers, eerily reminiscent of crises in countries with financial oligarchies and mafia control like South Korea and Russia. The gloves have come off, and the financial oligarchs seem to be winning. People on these networks, such as Larry Kudlow and Charlie Gasparino, are absolutely mocking efforts to use taxpayer money to help taxpayers, as opposed to giving it to individuals on Wall Street.

For decades, The United States has been dictating what countries receiving aid from the IMF should do during bank crises. The advice has always been the same when corrupt countries have been receiving aid: fire bank executives, nationalize banks, and under no circumstances give the banks money with no strings attached.

Now, The United States is going down the very road it has warned against so many times, and the results have already proven to be disastrous. Bankers and other Wall Street executives are demanding taxpayer money while hiding even the slightest hint of the extent of their losses. They have insiders from Goldman Sachs, Citigroup and many other firms in the Treasury, and they are even using TARP money to lobby for these things.

I don’t know what Obama is thinking at this time. What he’s actually doing, though, is taking food from the mouths of starving Americans and putting the money in the pockets of bank executives who have brought down the American financial system.

Moreover, I advise that the winner-takes-all voting system should be destroyed.


Anonymous said...

I think Larry summers, with his arrogant personality is walking all over obama on this one.

Obama needs to realize who the president is and stop letting this unelected arrogant men (like summers and geitner) - stop letting them tell him what to do.

Paul krugman is another overrated economist.

Don't you think something like this will eventually get out and end up in the news?

Anonymous said...

This entire thing is just not making sense to me.

Why are they signing something into law that they haven't finalized yet?

Geitner keeps saying that they will observe what's going on and change accordingly.

So, does that mean that this law is not permanent???? I'm confused.

Jacob said...

The Bush administration had a nasty habit of making law and not implementing it, and implementing things that was not law. I believe this is an unfortunate result of a non-working political system. The voice of the people is simply not expressed in a two-party Presidential system, which is why I believe we must switch to a dynamic parliamentary system with proportional representation. In such a system, people are held accountable for their core political values, which would make it extremely difficult to justify million dollar taxpayer bonuses for bankers. What kind of values does that reflect?

I hope the story about desired changes to the bonus system will come out soon. I've seen only two new stories about it, but nothing on the TV news, which is very surprising. But they haven't actually done anything about this yet. Right now, the law is that if a bank receives a taxpayer bailout, it cannot pay a bonus that exceeds a third of an executive's salary. If the shareholders want to, they could vastly increase the bankers' salaries, but somehow I don't think that's going to happen. Hence, this legislation has real teeth. That is, unless the Obama administration undermines it like it said it will.