Tag: bailout

One tenth of the $700 billion bailout to be footed by U.S. taxpayers is projected to go to the pay and bonuses of Wall Street bankers. The same captains of finance who sent the world into a financial meltdown are now going to be rewarded handsomely.

The Guardian has found that the Top Wall Street bankers are to receive $70 billion in pay deals.

Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40.4bn), a substantial proportion of which is expected to be paid in bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash…

Staff at six banks including Goldman Sachs and Citigroup will pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted widespread criticism. The government cash has been poured in on the condition that excessive executive pay will be curbed.

Today, Treasury Secretary Henry Paulson appointed Neel Kashkari to oversee the $700 billion bailout of the nation’s financial crisis. That’s right Kashkari is now the interim Assistant Secretary of the Treasury for Financial Stability.

Who?

Neel Kashkari, a former banker at Paulson’s old company, Goldman Sachs, who earned his M.B.A. from the Wharton School at the University of Pennsylvania in 2002.

Paulson’s move certainly inspires the confidence a panicky financial community needs right now, doesn’t it?

The “Deal Journal” blog at The Wall Street Journal has some background on Kashkari. The post notes, Paulson’s “move essentially puts a new title on what Kashkari he has been doing since he joined Treasury in 2006-examining the consequences of an economic housing fallout.”

So, after two years of watching the collapse, he’s in charge of fixing it?

Come on! Kashkari has only six years of financial experience!  

I received a note from Bernie Sanders yesterday to say thanks for supporting and signing on to his letter to Secretary Paulson.

Sanders is clear in saying this is not the end, but the beginning; and he asks people to remain involved.  In the months ahead we need to correct the many flaws in the final passage of H.R. 1424, The Emergency Economic Stabilization Act of 2008 as we all know this is not stabilization at all but, rather, a very volatile weapon of mass destruction which could wreck much greater havoc at any moment.

Nevertheless, so long as we are all still here, I think it is of value to do all we can to try to sustain and restore life.  In this matter, Sanders wants to continue to work to implement his 4 point plan for the economy:

    1) A temporary, 10% surcharge on the ultra-rich.

    2) Extensive re-regulation and oversight.

    3) A WPA type program of job creation in infrastructure repair & sustainable energy

    4) Limits on business size so they are not “too big to fail.”

See more about what he wants to do beneath the fold.

 

From the House Clerk’s Office (the bailout vote):  http://clerk.house.gov/evs/200…

While normal Americans were watching the Dodgers-Cubs game on Wednesday night, the Senate passed the bailout bill on a 74-25 vote.  The House was unable to pass the bill on Monday, but the Senate fixed the glaring problems of that bill and it breezed through with bipartisan support.  How did the Senate fix and pass the bailout bill?  They added a provision to repeal an excise tax on wooden arrows designed for children.  Now why didn’t the House think of that?

Senators attached a provision repealing a 39-cent excise tax on wooden arrows designed for children to an historic $700 billion financial-markets rescue that passed tonight by a vote of 74-25. The provision, originally proposed by Oregon senators Ron Wyden and Gordon Smith, will save manufacturers such as Rose City Archery in Myrtle Point, Oregon, about $200,000 a year.

(snip)

Representatives for Wyden, a Democrat, and Smith, a Republican, didn’t immediately return calls.

This wasn’t enough for Senator Wyden (D), who still voted against the bailout.  But it apparently swayed Senator Smith (R), who voted in favor of the bailout.

painting from Sweep Da Leg

Recently, I needed some money so I could complete a project I was working on.  So I called up my friend, Tom, and I asked him if I could have $10,000.  He said he’d have to discuss it with his spouse, but then called by later and said, “Sure.  Happy to do it.  When can you pay it back?”

It’s the last sentence that’s the issue here.  Can you imagine my outrage that he wanted to be paid back, that he wasn’t just going to give me the cash?  I need a better set of friends.  I need friends who will just give me money when I say I need it.  I need friends who make gifts and don’t appear to expect anything in return.      

Maybe I should have responded to his request for repayment by telling him that very, very bad things would happen not just to him, but also to his family, and that they would all be afflicted for the next seven generations if he didn’t just pony up the cash and drop the repayment talk.  I wouldn’t explain how this would happen, or provide details.  I’d just emphasize how very, very bad things would be for him, etc etc.  It’d just be a strong threat of very bad things.  If I had said that, I think he probably would have thought I was committing a crime, trying to extort funds from him by threatening him and his family.

Maybe if I had been making many big monetary gifts contributions to Tom for the past decade, he would have considered my request for payment a “pay back” of some sort.  But I don’t have any relationships like that, where it’s about me buying a potential, future favor.  I just try to be generous when friends ask for something.  And I always ask when they will pay it back.  And I hope my friends will be generous when I ask for something.  And I don’t ask if I think that there’s any chance that I cannot pay it back.

If I lent my friends money for a business venture, I’d expect them to give me some stock in the company, or a promissory note that paid interest.  I’d expect to be protected and to be paid back. Silly  me.

So evidently, Wall Street has far better friends in Congress than I have in my life.  I hope that’s not true, but if the bailout bill passes, it will prove the point.

Maybe I could have the right kind of friends if I started befriending a new class of people, people I presently disdain for being fools and suckers.  Who else will make a gigantic gift to people who apparently don’t need it and expect nothing in return?

Please tell your Congressperson to vote no.  Not one centavo.  Not one cent.  Not one penny.  Please email and FAX and telephone them.