$1.6B Of Bank Bailout Went To Execs

Discussion in 'Politics, Religion, Social Issues' started by Frisco, Dec 21, 2008.

  1. Gray-Wolf macrumors 68030

    Gray-Wolf

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    #2
    Thats not Too bad. Congress voted and passed their own pay raise that takes effect Jan 09
     
  2. jabrowntx macrumors 6502

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    #3
    Yeah, we can thank our brainless idiots in the government for not putting enough restrictions on the bailout $$$.
     
  3. iJohnHenry macrumors P6

    iJohnHenry

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  4. leekohler macrumors G5

    leekohler

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    #5
    It should be zero! These people have absolutely no shame! :mad:

    We don't help these idiots ever again.
     
  5. PlaceofDis macrumors Core

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    #6
    this is why blank checks don't solve anything. ugh.
     
  6. skunk macrumors G4

    skunk

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    #7
    They won't be needing your help with $1.6 billion in the bank.
     
  7. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #8
    Who's worse these wallstreet bankers or our stupidarse politicians who give them our tax dollars to piss away. We need a 3rd party folks lets face it. Democrats and Republicans are owned by these guys. Tea party time.
     
  8. Frisco thread starter macrumors 68020

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    #9
    A great comment on deflation from a New York Times article last week:

    "Deflation is problematic but only if it goes beyond a point that is rational in view of the underlying fundamentals.

    Since the cost of living - everything from housing to food to vehicles - has increased at a rate far surpassing the increases in income for 90% of the US, it only makes sense that prices for goods and services must fall. In 1988 I purchased a semi-custom pickup for $20,000 and to replace it with an identical vehicle in 2005, the price quoted was starting at $65,000. Incomes most certainly did not go up 300% in the intervening 17 years. House prices soared into the stratosphere - far exceeding the ability of households to pay the mortgage, taxes and insurance.

    The demand for goods and services for the past 10-15 years has been driven not by rising incomes but by credit and debt. The excessive amount of debt and lending meant more money was competing for goods and services - but in fact, the money was not real, it was only borrowed without the ability to repay. Now that credit orgy has ended - and rightfully so as household simply can not pay back what they have been borrowing - the providers of all those goods and services have to reduce the price in order to be able to sell them since what they can charge is restricted by the ability of purchasers to pay.

    Many news articles have contractors and realtors bemoaning house prices with the cry 'but it is selling for less than it cost to build.' In fact, they paid too much for the land and are trying to peddle too many upscale homes in a market where there are not enough buyers for such things. They will take a loss on that 4500 sq ft 5 bedroom McMansion but they would have been able to make a profit even now if they had built smaller more modest homes that fit the real pocketbook of US households.

    Why are falling prices considered 'bad' when it is necessities such as food, housing and utilities in question but called 'good' when it is frou-frou junk from China such as endless supplies of toys, knickknacks and electronics? That does not, and never has, made any sense. Being able to supply goods and services and cheaper prices by exporting the manufacturing to China and India has been one of the mantras of the 'free marketers' to justify reducing the US to a land of retail shops and questionable Wall St financers.

    We can only hope that prices for essentials do continue to fall so that they are in line with incomes. That applies to everything from houses to cars to food. Many suppliers will suffer a loss in income but that is what happens when prices were inflated to start with in eto fuel excessive profits. If the suppliers wish to avoid lowering their prices, then they have only one choice: Start handing out wage increases to employees and start cutting dividends to shareholders and the obscene salaries of the CEOs.

    Deflation will keep going until household incomes start rising - and not through borrowing money which seems to be the only solution offered by Paulson et al to stimulating demand but through real income. It was a serious error to follow the policies of downsizing, outsourcing and wage cutting in order to generate more profits which primarily disappeared into the bank accounts of the upper 1% who proceeded to gamble on Wall St rather than using the money to create new industries and real jobs that paid good wages. Corporate America has killed the goose that laid the golden egg - US households. Now they get to lose their profits too.

    Unless household incomes do rise, deflation will go on and on and on in a downward spiral. And that is frightening. I may not have lived through the 1930's but my one degree is a specialization in the political social and economic history of those times. Handing unrestricted money to Wall ST will not solve the problem - Aunt Tilly and Uncle Jake are flat busted and can't spend or borrow another dime."
     
  9. NT1440 macrumors G4

    NT1440

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    #10
    What was the rationale that there shouldn't be any restrictions on the bailout??

    If someone says "free market" im gonna punch a kitten in the face.
    :mad:
     
  10. Slowstick macrumors 6502

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    #11
    Unfortunately, my generation is going to have to pay for all of this.:mad:
     
  11. NT1440 macrumors G4

    NT1440

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    #12
    HA, not if we continue our ways of passing it off to the next generation. :rolleyes:
     
  12. Rodimus Prime macrumors G4

    Rodimus Prime

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    #13

    no congress did not vote for there own pay raise. If you look at how it is written congress gets its raise if it does not vote to turn it down.

    Going back though history it is very rare that they vote for it to be turn down. Last time I know when they did it was in Clinton was in office and that was because they where trying to save some face.
     
  13. kavika411 macrumors 6502a

    kavika411

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    #14
  14. Rodimus Prime macrumors G4

    Rodimus Prime

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    #15
    well considering the 1.6 is roughly 1% of the bail out money give out so far and spread across over 100 banks it is not as bad. (all the information is in the article)

    Information that I question is that money really going to th execs or is that the salaries they already are paying them. Just the media is trying to spin it.

    Learn to read more than just untruthful headlines and remember the media cares more about making money than the truth. Because clearly 1% of the bail out money is going to execs does not look as bad.
     
  15. itcheroni macrumors 6502a

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    CA
    #16
    The debt we currently have will never be paid down. So your taxes will never go towards paying the current principal. We will all pay for it over the next decade in the form of inflation as we are doing now. All our standards of living will change dramatically because of it.
     
  16. NT1440 macrumors G4

    NT1440

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    #17
    That in itself is spin as well......

    just sayin
     
  17. itcheroni macrumors 6502a

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    CA
    #18
    Just as there are different sects of monotheism, there are different sects of free-market believers. It is my belief that the majority, the ones who were the dead wrong on housing, don't know jack in terms of improving the economy, while the pro-free-market crowd of the Austrian school warned early and often about the housing bubble. And despite (or because of) their belief in the free market, the Austrians urged government to step in. Free market means good decisions are rewarded and bad decisions are punished (Austrians economists saw lending standards and mortgage-backed securities took away that good-decisions=reward incentive). On the other hand, the Keynesians (pretty much all politicians except Ron Paul), despite their lip service of being for the free-market, actually aren't. Free market doesn't mean a total disregard of fraud and corruption.
     
  18. TSE macrumors 68030

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    #20
    Holy ****! No way! I didn't see this coming! :rolleyes:

    Whoever actually believes that any of the bailout plans are going to help anything is an idiot. I was against it from the very beginning like what most people should have been.
     
  19. Rodimus Prime macrumors G4

    Rodimus Prime

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    #21
    but it is more the fact that all they do is point out the total sum of the money that is going out but fail to show how little is going to each bank that way or how little of it is going that way over the total amount.

    Just in the bank part it is a roughly 100k per bank and then when you put that in to propective it is very little of there normal salary. Do not forget severance pay is pretty expensive. A year salary is not uncommon.

    Just annoys me how in the headlines it is clearly meant to cause outrage. I wish they would be more truth and less spin.
     
  20. Sun Baked macrumors G5

    Sun Baked

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    #22
    Also have to look at New York, which is saying the bailout money has cost them around $178 million in revenue from bonuses that won't get paid this year.
     
  21. Desertrat macrumors newbie

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    Terlingua, Texas
    #23
    kavika411, this isn't an issue of regulatory oversight, as should have occurred with Madoff. This was a Congressional deal, insofar as the language of the bill. So, ask yourself, "Who wrote this bill?" and, "Which party is in control of the language of such bills?"

    IMO, there ain't a nickel's worth of difference between Demodunces and Republikooks when it comes to giving the public a ride in the queen's elevator, aka the Royal Shaft.

    Somewhere in the financial press, a few weeks back, it was reported that without the bailout bucks, the bonuses would be 30% of last year's. However, with the bailout money, the bonuses would be 70%. I've also read that the minimum bonus, for a newly-hired Quant, will be $150K. The guys up top? "Hey, you totally screwed up the company, so have a few million on me."

    All this bailout is about like giving some street-worm a dollar 'cause he says he's hungry--but he goes around the corner and buys a bottle of MD 20/20. Trouble is, it's the folks we all voted for who are giving away our children's and grand-children's money.

    CUL. I gotta go puke.

    'Rat
     
  22. jplan2008 macrumors regular

    Joined:
    Feb 15, 2008
    #24
    Except you're not using truth either. It was $1.6bn for approx. 600 execs. = an average of $2.67 million per exec. You're right that it wasn't directly take bailout money, then give the execs the outrageous compensation, but these are the people most responsible personally for a worldwide economic crisis, and they got an avge compensation of $2.67 million each in one year. That doesn't count their bonuses for 2008, which are calculated in January and paid in 2009. There was nothing in the bailout legislation preventing big bonuses, only something about golden parachutes (i.e., if the incompetent greedy bastards stay, they can make as much as they want).

    Compare that to the auto workers who get $28 per hour plus healthcare plus a bit of pension (that's the older workers -- new workers get $14 plus no pension). Congress wouldn't agree to $14 bn for the companies unless the workers agreed to lower their pay, including cutting pension for retired workers who have counted on that their whole lives and worked for it. Even if you think that the workers' pay helped cause the automakers' problems (which I don't agree with) -- they didn't cause a worldwide economic crisis, and their problems were also caused by the overall financial crisis that the execs making $2.67 million each caused.

    Paulson didn't want to limit exec. pay, because he thought then the banks wouldn't accept the money (being the greedy irresponsible people they are -- willing to cause something worse than a Great Depression -- which is what Paulson was worried about -- if they didn't get their millions personally that they didn't need.). Well, the government has a system in place to deal with banks in trouble, and if he thought they were in trouble, the government could have taken one over completely as an example, fired the execs, and use that as leverage with the others.
     
  23. kavika411 macrumors 6502a

    kavika411

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    #25
    Well said. I don't disagree with you. My sarcasm was simply to point out that the same dishonesty and selfishness that visits the private sector also visits regulators and lawmakers. I know that sentiment is nothing new under the sun, but the current wave of let's-legislate-private-companies-out-of-bankruptcy and let's-regulate-private-companies-out-of-bad-behaviour makes me nervous. Do I have a solution? Nope; I just hope we are all on the same page that the same greed that can take down a company from the private side can also take down a company from the public side. Again, it's nothing new under the sun, I just think it needs repeating here and there.
     

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