The economic situation we’re in today — which has been referred to ridiculously as “The Great Recession” — is a direct result of Wall Street greed. It’s a result of bankers taking on risky investments in an effort to make quick and astronomical sums of money.
Ten-percent unemployment? Their doing.
Devalued currency? Their doing.
Crippled global markets? Their doing.
The housing bubble burst, irresponsible and ridiculous mortgages, outrageous interest rates and economic panic? All. Their. Doing.
Wall Street greed and their willingness to play Russian roulette with the American economy put us where we are today. Granted wars, nutty tax cuts and deregulation didn’t help either, but today’s economic crisis was avoidable.
As it were, Wall Street banks so crippled our financial system that the government had to bail them out — had to send billions in taxpayer dollars to “too-big-to-fail institutions” — otherwise they faced the prospect of another Great Depression. They bailed out Goldman Sachs, Bank of America, JP Morgan Chase, and they did it only after seeing giants like Lehman Brothers and Bear Stearns fold overnight. So Uncle Sam bought up toxic assets, infused money where they was none and created a new flow of investment. The US government essentially performed an emergency bypass, averting what otherwise would have been a massive — and possibly fatal — financial heart attack.
Many people who suffer near-fatal heart problems change the way they live; they cut back on salt and red meat, they exercise more, they reevaluate their priorities and cut out stress.
On Wall Street, though, their first post-op meal was a bacon double cheeseburger (DELICIOUS, I KNOW RIGHT!?). In fact, at Goldman Sachs, nearly every meal since they were saved has been just as gluttonous. </metaphor>
So life is back to normal for the bankers. Life is so normal, in fact that Goldman is set to give its employees $23 billion in bonuses this year. Yes, apparently nearly destroying the US and global economies earns you a bonus at Goldman! It raises the question: how shitty a job do you have to do to not get a bonus? Naturally, the answer is probably: “That’s impossible! Here’s your $600,000 for being a champ!”
Not surprisingly, not everyone’s cool with these guys rewarding themselves for overt and colossal failure. In Britain, they enacted a windfall tax on bonuses; Barack Obama almost seemed upset; and Christina Romer — head of the president’s Council of Economic Advisers — called the bonuses “offensive.”
OH MAN! Strong words!
Of course, until today, that’s all it was in the United States: words.
Vermont U.S. Representative Peter Welch proposed a 50 percent tax on employee bonuses exceeding $50,000 at banks that received bailout funds from the Troubled Asset Relief Program.
Legislation introduced today by Welch, a Democrat, would use revenue generated by the tax to fund a new Small Business Administration lending program. He said he modeled his plan after bonus taxes adopted in the U.K. and France.
“As most Americans struggle to endure a long and wrenching recession, the same Wall Street bankers who came to the American taxpayer with hat in hand are now preparing to pocket record- breaking bonuses,” Welch said in a statement. “Financial firms that received taxpayer assistance must remember that they owe their return to profitability to hardworking Americans.”
These bonuses are only possible because of taxpayer dollars. The people who burst the economic bubble are rich again while millions of Americans are unemployed or underemployed, and Goldman CEO Lloyd Blankfein has the audacity and tin ear to say he and bankers are “doing God’s work“?
We find it hard to believe that “God’s work” is giving mortgages to people who can’t pay them back and ordering fancy bottle service while many Americans struggle to figure out where their next meal is coming from. We find it hard to believe “God’s work” is buying a second or third home, or that it’s leading an industry that makes no discernible product or export, exists on speculation and excels when others fail.
But hey, it’s not like we’re bankers.
Good for Peter Welch, though. We’re glad someone’s finally taking on a group that has its hands so deep into Washington’s pockets that they’re scratching ankles. Of course Welch will take flack from dum-dums who’ll say “This is regular Democratic politics. Tax tax tax.” Yeah, maybe that’s what it is, but at least it’s an effort to recoup taxpayer dollars. At least it’s an effort to exact something from the people who put this economy where it is.
To quote stripper-aficionado Eliot Spitzer, “What we have done is called ‘socialize risk.’ When things go bad, we bail them out; when things go well, they want the profit. This is inequitable. It is wrong. It is abhorrent and it is creating a crisis.”