Bailing out the people who don't need it?

[Gary Childress]

What would you do with an extra
$18,000 in your pocket?
That's the amount of extra cash each and every Burger King employee in America would have received last year if Goldman Sachs (one of the fast-food chain's largest owners) had shared its bailout billions with rank-and-file workers. Instead, Goldman Sachs squandered 6.5 billion of our taxpayer dollars on bonuses for their financial staff. These were some of the highest bonuses on Wall Street! Meanwhile, Burger King workers earn wages averaging just $14,000 a year -- well below the federal poverty line for a family of three.
Goldman Sachs has been having it their way with Burger King workers for too long. It's high time you had it your way with Goldman Sachs. Together with SEIU we are pushing back against Wall Street excess, and there are several ways we can make our voices heard. Don't miss the contest and poll below.

http://warongreed.org/

Heck if finiancial analysts can bring a company to ruins, don't they deserve a nice bonus for their mistakes?

Seriously, though, I know the logic all too well. "If we pay our financial analysts well then we'll attrack a better calibur analyst to work for us." But what about all those regular workers at Burger King? Wouldn't better wages attract a better calibur worker at the average Burger King as well? The people who need to be bailed out the most, the unemployed and underemployed are not getting these bailout dollars. It sounds more like the rich are simply having a party in these troubled times. This has to be economics at its stupidest.

 

[mrt144]

I wish we could return to the day of "You aren't special and if you think you can make more money, go do it."

 

[BARBEERIAN]

What I don't understand is why this bailout money was given to companies without any strings attached. Strings like not using to pay a bunch of morons bonuses, instead of using it for things like regular payroll, infrastructure building, etc. Then the people who ordered the squandering of government bailout money, and many of those who received it, should be liable to repay the money to the government of said country (with interest). Failure to do so immediately should be penalized severely. Hell, maybe even let them feel the wrath of the people with a little old fashioned vigilante justice.

 

[Gary Childress]

BTW, let me clarify, I'm not entirely against bailing out banks and fanancial institutions to prevent further economic decline. I'm against the idea that the rich are getting our bailout dollars and not the ordinary people who are struggling to make a living in this economy. This is just irrational economics. Help the rich who don't need it, to heck with the poor. These companies should be helping their regular employees. That would have a greater effect on the economy than simply handing a few large checks to a handful of millionaires.

It really sounds like these companies are getting so much bailout money that they literally don't know what to do with it all so they just hand it out to a few of their most favored employees at corporate HQ.

But who will get the focus in these troubled times? Immigrants. All the fuss about immigrants is simply diverting our attention away from the fact that the rich are having a bailout party extravaganza.

 

[I'm Cleo!]

http://warongreed.org/

Heck if finiancial analysts can bring a company to ruins, don't they deserve a nice bonus for their mistakes?

Seriously, though, I know the logic all too well. "If we pay our financial analysts well then we'll attrack a better calibur analyst to work for us." But what about all those regular workers at Burger King? Wouldn't better wages attract a better calibur worker at the average Burger King as well? The people who need to be bailed out the most, the unemployed and underemployed are not getting these bailout dollars. It sounds more like the rich are simply having a party in these troubled times. This has to be economics at its stupidest.

But the "pay the best a lot of money to get the best" theory has been proven -- at least in the financial world -- not to work. We paid these people unbelievable sums of money, and the "performance" we got was to completely destroy the wealth their banks held and to run them into insolvency. Simply offering lots and lots of money did not get us the best people. At least I hope it didn't!

On the other hand, these people still got to swipe $350 billion from taxpayers. They're certainly good at something. Maybe this crisis can get rid of the silly idea that bankers would pursue anyone's interests but their own.

Cleo

 

[Theige]

Goldman Sachs can pay back that $6.5 rather easily.

I'm pretty sure they would pay it back right now if the government would let them.

 

[Formaldehyde]

Nearly everybody on Wall Street gets paid both a salary and a bonus. Quite often, the bonus component is twice as large as the salary, and in some cases it is even more. The reason the brokerages do it this way is so they can use that money for arbitrage opportunities throughout the year so they can hopefully earn much of it with short-term investments. If you suddenly remove the bonus component, you will find that these individuals will literally be getting screwed out of their rightful income.

Microsoft used to employ a similar tactic to drastically underpay their employees. They gave all of them rather substantial amounts of stock options in lieu of pay. This scheme worked to the benefit of both until the price of Microsoft stock finally leveled off. Then, most of them quit and went to work elsewhere until Microsoft finally addressed the issue.

The same would occur here. The people who actually generate the preponderance of the company's revenue will go elsewhere, as I'm sure you would too.

While the executives in these companies certainly don't deserve bonuses (and the vast majority have already stated they have no intention of receiving one), that's simply not true for the rank and file who expect to be paid just as you do. Or are all of you willing to take a 50-66% pay cut to help out until the economy gets back on its feet?

 

[Labtec600]

BTW, let me clarify, I'm not entirely against bailing out banks and fanancial institutions to prevent further economic decline. I'm against the idea that the rich are getting our bailout dollars and not the ordinary people who are struggling to make a living in this economy. This is just irrational economics. Help the rich who don't need it, to heck with the poor. These companies should be helping their regular employees. That would have a greater effect on the economy than simply handing a few large checks to a handful of millionaires.

The money should go to keeping the business up. No bonuses to anybody. There should have been some sort of seperate fund and they're only allowed to take what they need. If they got back on their feet and didnt use it all, it should have gone back to the government.

 

[Gary Childress]

Nearly everybody on Wall Street gets paid both a salary and a bonus. Quite often, the bonus component is twice as large as the salary, and in some cases it is even more. The reason the brokerages do it this way is so they can use that money for arbitrage opportunities throughout the year so they can hopefully earn much of it with short-term investments. If you suddenly remove the bonus component, you will find that these individuals will literally be getting screwed out of their rightful income.

Microsoft used to employ a similar tactic to drastically underpay their employees. They gave all of them rather substantial amounts of stock options in lieu of pay. This scheme worked to the benefit of both until the price of Microsoft stock finally leveled off. Then, most of them quit and went to work elsewhere until Microsoft finally addressed the issue.

The same would occur here. The people who actually generate the preponderance of the company's revenue will go elsewhere, as I'm sure you would too.

While the executives in these companies certainly don't deserve bonuses (and the vast majority have already stated they have no intention of receiving one), that's simply not true for the rank and file who expect to be paid just as you do. Or are all of you willing to take a 50-66% pay cut to help out until the economy gets back on its feet?

But over $200,000 in bonuses per employee? That seems a little unnecessarily hefty for some people who didn't really help the company prosper. Especially considering that the average worker in the field makes only some $14,000 a year.

http://www.youtube.com/watch?v=wABI2dwbQMQ

The money should go to keeping the business up. No bonuses to anybody. There should have been some sort of seperate fund and they're only allowed to take what they need. If they got back on their feet and didnt use it all, it should have gone back to the government.

Well part of keeping a business up is paying the employees decent salaries to attract better employees. The point of the story is that gross amounts of money just went into the pockets of a fortunate few instead of spreading it around to where it would do some good for the economy.

Bottom line, they did it. They lined their pockets with tax payer money. Nothing will probably happen to them and for the folks in the field making poverty wages its just business as usual.

 

[Kerozine]

Is the term 'bailout' being used here to mean 'loan' or 'free money'?

 

[Frank327]

What I find most disturbing is this:

This crisis is caused by economy alone. Nothing points to anything other than the financial sector behaving badly to cause this financial crisis. Then how is the reaction to this crisis to give people in the financial sector bailouts? They're the ones that caused this in the first place! This is rewarding the people that caused the trouble.

 

[Gary Childress]

Is the term 'bailout' being used here to mean 'loan' or 'free money'?

Well it sounds almost like "free money" if it's being handed out in bonuses and perks for the upper echelons. In fact I can't think of a better way to effectively steal the money than give it to the wealthiest few in the business to pad their paychecks. I'm sure the companies will pay the money back by shaving a little extra out of the paychecks of the field employees. That's usually how they work. Bad times = bad times for the average guy, not for the rich.

EDIT: Remember the point of the "bailouts" is to keep the businesses afloat not to line their pockets with. If their financial department won't work for less than $200,000 a year then in this economy I'm sure they could find someone who would do it for less.

 

[mrt144]

Nearly everybody on Wall Street gets paid both a salary and a bonus. Quite often, the bonus component is twice as large as the salary, and in some cases it is even more. The reason the brokerages do it this way is so they can use that money for arbitrage opportunities throughout the year so they can hopefully earn much of it with short-term investments. If you suddenly remove the bonus component, you will find that these individuals will literally be getting screwed out of their rightful income.

Microsoft used to employ a similar tactic to drastically underpay their employees. They gave all of them rather substantial amounts of stock options in lieu of pay. This scheme worked to the benefit of both until the price of Microsoft stock finally leveled off. Then, most of them quit and went to work elsewhere until Microsoft finally addressed the issue.

The same would occur here. The people who actually generate the preponderance of the company's revenue will go elsewhere, as I'm sure you would too.

While the executives in these companies certainly don't deserve bonuses (and the vast majority have already stated they have no intention of receiving one), that's simply not true for the rank and file who expect to be paid just as you do. Or are all of you willing to take a 50-66% pay cut to help out until the economy gets back on its feet?

And we should let them considering the results of their work have been crap.

 

[Whomp]

Formaldehyde nailed it. Don't compare rank and file making $500k a year to the executive team. Most of the rank and file produced quantifiable results.

Where the focus should be is on the risk managers and executives. The risk managers should be independent from the executive team and report to both regulators and the executives. They should also be amongst the most highly compensated in the organization for managing that risk.

 

[Whomp]

What I find most disturbing is this:

This crisis is caused by economy alone. Nothing points to anything other than the financial sector behaving badly to cause this financial crisis. Then how is the reaction to this crisis to give people in the financial sector bailouts? They're the ones that caused this in the first place! This is rewarding the people that caused the trouble.

Hardly. The banks/investment banks/financiers/hedge funds are only part of the problem. The U.S. consumer/business is as complicit in this problem by taking their borrowing from 80% of GDP to 150% of GDP (parabolic over from 2002-2007) over the last 25 years. Take $6 trillion of debt out and we get reversion to mean. If anything we have excess capacity of credit today.

 

[Gary Childress]

Formaldehyde nailed it. Don't compare rank and file making $500k a year to the executive team. Most of the rank and file produced quantifiable results.

Where the focus should be is on the risk managers and executives. The risk managers should be independent from the executive team and report to both regulators and the executives. They should also be amongst the most highly compensated in the organization for managing that risk.

$500 a year is a little above the "rank and file" level. Actually I think mrt144 nailed it quite nicely. Obviously the corporate offices did something wrong. Why should they get bonuses for it?

 

[Whomp]

$500 a year is a little above the "rank and file" level. Actually I think mrt144 nailed it quite nicely. Obviously the corporate offices did something wrong. Why should they get bonuses for it?

More than 10% of the staff at JP Morgan make more than $500k so let them go and you will drain the best inside the organization.

 

[Gary Childress]

More than 10% of the staff at JP Morgan make more than $500k so let them go and you will drain the best inside the organization.

Yeah. I'm sure they'll pull a John Gault and just refuse to work rather than for the benefit of the rest of us poor saps, spend the rest of their lives in poverty. So the economy is going down the tubes and the answer is to shower the rich with money.

 

[Mark1031]

More than 10% of the staff at JP Morgan make more than $500k so let them go and you will drain the best inside the organization.

How do we know they are the best? For example, after fees and compensation for an investment fund does anyone consistently beat the S&P. I have heard not but maybe I'm wrong. I have no problem with people getting rich off of some new idea or real skill. I do have a problem whth people in a very needed industry moving around trillions of $$ and just deciding well ther is so much money in this field I guess I can skim 1% for my trouble and get rich. If that 10% left and you moved up the 10% below them would you see a substantive difference?

 

[Gary Childress]

If that 10% left and you moved up the 10% below them would you see a substantive difference?

Probably not. Almost anyone is replacable. when someone has reached the point where it costs more to pay them than the entire bottom 20% then it sounds to me like they are more of a financial burden to their company than anything else.