… too big to fail and has too much arrogance not to use our tax dollars to run up huge year-end bonuses. I know that’s an overstatement and Wall Street compensation is pretty arcane, but the message Main Street is going to get when the final numbers come out is one big middle finger from Wall Street.
If I were Goldman Sachs I’d ramp down a whole lot lest the heavy hand of a Democratic Congress and White House take unwanted action interfering with business as usual on the Street.
Call it what you want — balls, chutzpah, hubris, whatever — it’s very, very bad pubic relations, very questionable internal policy to continue the old ways when the entire game was changed by last year’s bailout, and frankly I think the best description for Goldman’s feeble justification is blind stupidity.
From the link:
As Wall Street firms typically do, Goldman set almost half that sum aside to compensate its workers. Through the first nine months of 2009, the firm socked away $16.7 billion, enough to pay the average Goldmanite $526,814.
The bonus pool is on pace to hit $21 billion for 2009, which would match the record bonus payout of 2007.
Goldman said it won’t decide the size of the bonus pool till year-end. In any case, the payments will be substantial — and will come just one year after huge sums of taxpayer dollars were funneled to financial institutions.
Critics charge that the lion’s share of Goldman’s profits comes from making big bets using cheap dollars printed by the Federal Reserve. Plus, given the crisis that followed the failure of Lehman Brothers, there’s a sense that government officials won’t let big firms go bust. That in effect gives too-big-to-fail firms a license to bet the house.
“This is almost an ‘in your face’ kind of setup here,” said Michael Panzner, a Wall Street veteran who blogs at financialarmageddon.com and who wrote a 2007 book predicting economic disaster. “They’re rolling the dice, and so far they’re winning,” said Panzner.
(Co-posted from here.)
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