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Monday, December 22, 2008

Silent about this but outraged about auto workers?
Posted by Jill | 4:26 AM
I really don't know what's wrong with Americans. We've stood by and watched for thirty years as Republicans took money out of our pockets to give to the wealthiest and either said nothing or called right-wing talk shows to agree that "rich people create jobs" and therefore they deserve more tax cuts while poor children eat government surplus cheese. This peculiar notion of economic justice came to a head this year as we watched the Bush Administration allocate $700 billion of our money to bail out the banking and financial industries and didn't utter a peep, but screamed bloody murder at the thought that automobile workers might be able to keep their jobs.

I don't know what's wrong with us. I just wonder if there will be any outrage over the bank bailout now that we know this:
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe "to get them to do the jobs for which they are well-paid in the first place.

"Most of us sign on to do jobs and we do them best we can," said Frank, a Massachusetts Democrat. "We're told that some of the most highly-paid people in executive positions are different. They need extra money to be motivated!"

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help.

Among the findings:

The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Virginia-based company received $3.56 billion in bailout money on Nov. 14.

John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.


It just doesn't make sense.

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1 Comments:
Anonymous Anonymous said...
Because its different for bosses!

The first rule of economics is that "the boss is always right" so when they reward themselves big pay they deserve it (and never price themselves out of a job, ever). If workers get high wages (particularly by collective action) then it is terrible, causes unemployment and so forth.

Neo-classical economics has come to the conclusion that everything wrong with the economy is caused by workers. Unemployment? Wages to high! Inflation? Unions being greedy! Low productivity? Workers are lazy. And so on...

Which is not that surprising, really, given the history of neo-classical economics, its evolution in response to socialist use of classical economics and so on. This is best seen from the rise of marginal productivity theory which, by pure coincidence, proved that workers were not exploited and that capital, land and labour were all paid their exact contributions to production...

Which is one of the many reasons to reject neo-classical economics -- although the main one is that it is utterly unrealistic and has no relationship to reality!

I should also note that some right-wingers attacked the strikers in France last December because they had a better pay and conditions than other workers. In other words, placing the politics of envy card in an attempt to level downwards. Which was an interesting twist on the standard right-wing insult on socialism (i.e., its envy driven).

I've blogged recently on this, particularly as this twisted politics of envy (directed against fellow workers!) has raised its head elsewhere (with the UAW workers).

The answer, of course, is easy -- if you are so concerned about equality now then let's level upwards! Let's make it easier to organise unions and that will reduce the divide between those on better conditions and those without. Needless to say, that conclusion is not the desired one by those who attack unions!

Iain
An Anarchist FAQ
12/23/08, 3:48 AM  
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