Was the purpose of the Taxpayer Bailout to Encourage Credit or a Transfer of Wealth to Wall Street Executives?
The Guardian newspaper in London analyzed corporate pay plans that were recently drawn up by Citigroup, Goldman Sachs, Merrill Lynch, Morgan Stanley, JPMorgan Chase, and Lehman Brothers. The highest-ranking executives of these banks are to split a total of $70 billion in salaries and bonuses this year.
Bonuses? The stock prices of the firms have plummeted in the past year, Lehman Brothers has collapsed completely, the bungling executives have caused a global financial crisis, and the five remaining banks are down now down in Washington loading up their share of a $700 billion taxpayer bailout. They get bonuses for that?
The math is infuriatingly easy here: This $70 billion executive payout means that honchos in these firms will siphon off 10 percent of the bailout funds that were supposed to shore up our economy – not reward executive failure.
http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking
http://www.guardian.co.uk/business/2008/oct/21/wall-street-bonuses
“Why is there no requirement in the bailout plan that banks must actually make loans as a condition of getting the money? Have you heard about this? America’s nine largest banks – including Bank of America, Citigroup, Goldman Sachs, and Wells Fargo – are being handed 125 billion of our tax dollars with no strings attached. The Bushites say they “hope” the bankers will use this largess to help the American economy… but that it’s up to them. Indeed, Bush’s chief bank regulator says he will not even monitor how the recipients use our money.
For their part, the Big Nine say they feel no urgency to move the funds into the credit system. After all, they sniff, we have lost a ton of profit in the past few months, so we’ll need the bulk of the handout to beef-up our own balance sheets.”
(Jim Hightower)
Aaron
Jacqueline
American people can not afford more loans! They have put themselves 1 Trillion dollars in debt over the past 2 years and managed to save a whopping 1% of their incomes.
100 million Americans have their savings and retirements vested in the stock market. It is not about the couple of thousand wall street CEO’s.
Timothy
There was no transfer of wealth to executives.
(And the Guardian is an anti-American news source. I wouldn’t rely on them for information.)
Tonya
well i think it was all to finance Obamas campaign that’s where he got most of his money and SUPPORT
Shane
And 50% of the bailout money is being used to pay for dividends to shareholders.
It is a SellOut. Vote against everyone who voted for it.
Shane
As we agreed, DAR included to his credit, throughout the two party charade concerning the Bailout it was a transfer of wealth to Wall Street executives.
All of the claims that were made to justify the bank bailout have been exposed as lies. President Bush, Federal Reserve Chairman Ben Bernanke and Paulson were joined by the Democratic congressional leadership and Barack Obama in warning that the bailout had to be passed, and passed immediately, despite massive popular opposition. Those who opposed the plan were denounced for jeopardizing the well being of the American people.
In a nationally televised speech delivered September 24, in advance of the congressional vote on the bailout plan, Bush said it would “help American consumers and businessmen get credit to meet their daily needs and create jobs.” If the bailout was not passed, he warned, “More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account…. More businesses would close their doors, and millions of Americans could lose their jobs … ultimately, our country could experience a long and painful recession.”
One month later, the bailout has been enacted, and all of the dire developments–banks and businesses disappearing, the stock market plunging, unemployment skyrocketing–which the American people were told it would prevent are unfolding with accelerating speed.
While Obama talks about the need for all Americans to “come together” in a spirit of “shared sacrifice”–meaning drastic cuts in Medicare, Medicaid, Social Security and other social programs–and the cost of the bailout is cited to justify fiscal austerity, the bankers proceed to ruthlessly prosecute their class interests.
The “economic rescue” plan has been revealed to be a scheme to plunder society for the benefit of the financial aristocracy. The American ruling elite, utilizing its domination of the state and the two-party political system, is exploiting a crisis of its own making to carry through an economic agenda, long in preparation, that could not be imposed under normal conditions.
The result will be greater economic hardship for ordinary Americans. The big banks will have even greater market power to set interest rates and control access to credit for workers, students and small businesses.
While no serious measures are being proposed, either by the Bush administration, the Republican presidential candidate or his Democratic opponent, to prevent a social catastrophe from overtaking working people, the government is organizing a restructuring of the financial system that will enable a handful of mega-banks to increase their power over society.
Jo
Now I wonder. Paulsen, Bush, McCain & company all colluded to create this situation. To see that executives of failed companies are rewarding each other is disheartening.
To think that we gave them that money with little regulation is a shock. I am sure McCain’s cronies are chortling all the way to the bank. This is how Republicans spread the wealth — they take from the taxpayer and give to the rich.