In the recent bailout of U.S. financial institutions, JP Morgan Chase was given $25 billion by us, the American tax-payers. The hope, at least as it was expressed to us by our legislators, was that, with this money, the company would once again begin making loans, thereby returning things to normal. According to New York Times reporter Joe Nocera, however, that wasn’t necessarily the intention of the leadership at Chase. According to Nocera, who sat in on a JP Morgan Chase conference call yesterday without the knowledge of participating executives, the company has no intention of using the bailout money given to them in order to start making new loans. Their plan is to use the funds instead to acquire other banks.
And that’s not the worst of the news today. According to Time, a considerable portion of the money given to financial institutions will, despite the complaints of the American people, be spent on executive bonuses. Here’s a clip:
…Uncle Sam has a new name on Wall Street — Sugar Daddy. Bonuses for investment bankers and traders are projected to fall by 40% this year. But analysts, compensation consultants and recruiters say the drop would be much more severe, perhaps as much as 70%, had it not been for the government’s efforts to prop up the financial firms. “Year-end pay on Wall Street will be higher than it would have been had it not been for the government and mergers,” says Alan Johnson, a leading compensation consultant. “You would expect it to be down much more.”
Johnson predicts the average managing director at an investment bank, a title typically earned around eight years on the job, will receive a bonus of $625,000. That’s down from nearly $1.1 million last year, but it is still 15 times the income of the average American household. Top bankers could receive as much as $1 million. Even a bond trader just out of business school could see his or her bank account enriched by as much as $170,000 this Christmas. “The firms have had an extremely difficult year,” says Joan Zimmerman, a Wall Street career coach. “But they can’t afford to lose talent either”…
So, how does that make you feel, America? Don’t you feel sorry for the men and women of Wall Street who are only likely to get 70% of the bonuses they’ve become accustomed to?
In a way, it’s kind of like getting attacked, and then charged for your forensics kit by the police, isn’t it?
How do you like knowing that not only you, but your kids and your unborn grandkids are going into debt so that the incompetent managing directors of failing investment banks can take home Christmas bonuses of $625,000? (And that’s in addition to their regular pay.)
And how do you feel about the fact that the money that’s left after pay and bonuses won’t be put into circulation as it was intended, but, instead, used by the company to facilitate their growth through acquisition?
Feel like rioting yet?
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This kind-hearted Government interventionism in the free-market has been brought to you by Dingell, Levin, Obama, McCain, and Bush.
I am officially blue in the face.
Allow me to expound with this simple, memorable formula:
Government intervention always promises to help the poor and needy and protect freedom before it’s begun, but once it clears the legislative process and is supremely difficult to undo, it doesn’t help the poor and needy or protect freedom. Usually it ends up doing the opposite. Sometimes it takes a while for its evil to manifest, but it always does.
Viewing reality through this simple lense will allow you to accurately predict general negative trends caused by Government intervention, like I’ve done with this bailout. Works on foreign policy too.
I wasn’t born this right, I changed my mind to be this right. You can too.
I want pictures of these people and their addresses. Can someone help me out with that? I want to circulate a comprehensive “do not lay” list in NYC.
I know this wasn’t the point of your post, and it sucks to get ripped off, but if you do really feel like rioting, remember: money isn’t everything.
The last argument my parents had before my dad left us was about a car. He’d traded in the Comet for a used Cadillac and that was the last straw for my mom. She threw my dad out, took the car back, and we sat in it while she yelled at the dealer for two hours. Amazingly she got the money and the Comet back. When I was little, I thought my dad was just a loser, but as I grew older I realized that my mom was really neurotic about money. She worried about every dime we spent. It only got worse after the divorce. And we were hardly poor.
In college, the credit card companies passed out applications like candy. I used them to the fullest joining the “rich” fraternity and lived life like my buddies – money wasn’t a concern. By the time I graduated I had far more credit card debt than student loans. My first job out of school didn’t make me enough to even keep up with the minimum payments. My girlfriend left me when I came home with a broken nose and a black eye – a gift from the owner of a restaurant where I’d taken prospective clients and bounced several checks. The law caught up to me too. I got probation, but my boss found out and I got fired.
I filed for bankruptcy and moved to Ypsi to start over. I changed my name, but that was more for me than hiding from anyone. Got a job in a used book store. I pretended that it was just temporary – a luxury I allowed myself before I headed back to a real corporate job – but really, I just needed to tread water for a while. I knew I was fucked up about money and just tried to avoid the fantasy/denial cycle I was prone to that got me in trouble.
My apartment was behind a hair and nail salon run by a Vietnamese family. That’s how I met my wife, Nga. She was beautiful and hardworking, and after I got to know everyone, her family took me in like one of their own. Our first place was in a fourplex where her parents, sister, and a cousin all lived with their families. Nga’s family spoke little about money out loud, but there were huge unspoken rules. Being frugal was a deeply embedded part of the culture. The price for anything seen as squandering was shame. Open approval from her parents, especially her father, for being penny-wise was the ultimate prize. I was motivated by loving my wife and fitting in with her family more than having any sort of material wealth. All of our meager savings was stashed away so that Nga could realize her dream of owning her own salon. I very much enjoyed the relative sanity of our financial life. The structure was good for me. I felt happier and more secure than I’d ever felt in my life.
One day at the store I spent about an hour with a woman who couldn’t remember the title of the book she was desperately looking for. It was a travelogue about Mexico at the turn of the century written by a German relative of hers. We researched it and actually found a copy in the store. She tipped me a twenty. On my way home that night I passed a convenience store and suddenly craved chocolate. I veered into the store and allowed myself to buy some M & M’s. When I got to the register I looked up at the LED sign that showed the current grand prize for the state lottery and impulsively turned the twenty in my pocket into twenty quick-picks. I instantly felt ashamed for wasting that money instead of taking it home and putting in Nga’s savings account for her business. What a weak idiot I was.
I didn’t mention to Nga the tip I’d gotten, or the tickets in my wallet. I hid the tickets in a box behind the register when I got to work the next day. I didn’t want her to run across them at home. It was about a week later that I checked the numbers and saw that I was one of the the state’s largest jackpot winners to date.
I had checked the numbers in the morning, so I had the whole day to stop trembling and sweating. Somehow I made it home and Nga didn’t notice anything out of the ordinary. We had a family reunion that weekend, so I put the ticket out of my mind and had a great time eating yummy food and playing with all of my nieces and nephews. For the next two weeks, home was like a sanctuary. Everything was normal and nice. At work, all I could think about was the ticket and what was going to happen when I brought it in. It terrified me. I couldn’t bring myself to throw it away. But I also couldn’t do anything with it. What would I do with that much money? How could I explain that I bought lottery tickets and didn’t tell my wife? Nga’s extended family was huge. Who would get what? Would we stay together? Would everyone move to Birmingham? That would certainly change things. And not for the better.
At some point I had an epiphany. I needed help and I had a friend from high school who played for the Steelers. He made a ton of money and I know for damn sure that he didn’t know how to manage that much. I called him up and told him I’d inherited some money and needed an advisor. He gave me the name of his financial planner. Turns out this guy’s office had a lot of pro athletes for clients as well as two other lottery winners. Talking with him took a lot of the stress off. The first time we met was at the lottery office in Lansing to hand over the ticket. I had told him I wanted to remain anonymous. That was against the rules, but we figured out that I could give them my old name and city of residence. I hadn’t changed it so completely that it couldn’t still be used.
I wish I had a better ending for you, but that’s about it. That was the only time I saw my financial advisor. The money sits in a couple of low-risk bond funds. I’ve never spent a dime of it. And I never told anyone. Not even my wife. We have two happy and healthy kids now. Nga’s getting close to opening her own store. At his point, the money is back to being sort of a fantasy. Sometimes I think about what it would be like to spend it, but I know I won’t. So it’s just like someone fantasizing who hasn’t won the lottery at all. I don’t know what’ll happen when I die. Or if I, or someone I know, gets sick enough to need the money. I guess I’ll have to face the music then.
Maybe it’s different for me now. Maybe my perspective is different from yours, but I picture these bankers with their huge bonuses as living life pretty low on the happiness totem pole. I get to spend tons of time with my wife and kids. I don’t worry about the jillions of choices that wealthy people have to figure out what to buy, who to trust, how to save, where to invest. I don’t second guess myself about purchases. Wants and needs are pretty clearly defined. 90% of advertising isn’t targeting me, so it just doesn’t pollute my life.
Those are some things to think about before you gather up your torches and pitchforks and storm somebody’s castle. Yeah, they’re greedy fucks ripping people off, but who really has the last laugh?
Note: names and irrelevant details have been changed so I can remain anonymous.
If we’re lucky, Obama will win the election and spread the wealth back to us.
Feel like rioting yet?
Well, sure – but for nearly the polar opposite reason from Brackache’s. I feel like rioting because I finally saw Sicko this evening.
Which reminds me — my buddy from the airforce was just in town from England and he says their (the English’s) socialized healthcare system sucks and everyone there hates it.
I can accept that their healthcare system sucks, but I find it difficult to believe that you have a friend.
And, yeah, Murph. Sicko was great. Depressing, but great… I particularly liked the story about the man who was presented with an itemized list of what it would cost to have his severed fingers sewn back on and forced to choose which one, given his finances, he wanted saved.
And I don’t know about you, somebody. I mean I love the story, but I’m having a hard time buying it. If it is true, are you in the market for a new best friend? I’ve got big ideas and I could use a hands-off silent investor…. All I’ll say is this – breakfast restraunt / gay bar. Interested?
Have you seen The Gay Bed And Breakfast of Terror? You can’t check in without getting checked out.
I keep some enemies closer than others. I suppose that’s a type of friendship.