Millions of Jobless, Billions For Bankers: The Fed Must Act NOW

[Donnachaidh]

http://www.huffingtonpost.com/rj-eskow/millions-of-jobless-billi_b_644565.html

In a nation wracked with unemployment and recession, Wall Street firms are still paying billions of dollars in bonuses - and they're hiring, too. The Federal Reserve recently affirmed its right to regulate executive pay, but has yet to take action on it. It should. These two facts - that bankers are earning billions while millions are unemployed - don't just represent an injustice. They are seamlessly connected, representing two aspects of the same underlying problem. When people are given incentives to "make a killing" rather than invest in the future, that's exactly what they'll do.

If the Federal Reserve fails to act decisively, Congress needs to step in. Banks, especially big banks, benefit from implicit public guarantees. And any institution that profits from publicly-provided discounted lending needs to be held to a responsible standard. The President's voice on this issue would be particularly welcome, too. His "bully pulpit" should be used to discourage bullying from bank executives who are draining the economy for their personal enrichment with government support.

The Fed, which has assigned responsibility for compensation issues to Governor Daniel K. Tarullo, understands that there is a problem. Wall Street is infused with a culture -- and a payment system -- that rewards high risk-taking and only considers a firm's short-term profits. A banker who cuts a risky deal can walk away with tens of millions of dollars, even if it collapses a couple of years down the road (and even, as we've seen, if it takes the global economy with it). This bonus structure encourages exactly the kind of dangerous and unproductive behavior that caused the last crisis, while discouraging the kind of investment we need to get the economy going again.

How distorted has the system become? Several bailed-out firms paid out more in 2008 bonuses than they made in profits. Goldman Sachs paid out more than double its profits as bonus money that year, just two short years after CEO Lloyd Blankfein received a record bonus for practices that were destined to break the economy. Paying out more in bonuses that you make as profit is not "free enterprise," it's greed.


MORE at the link --

[aquart]

1. Is it the Fed's job to tax the rich? No, it is ours. It is Congress'.

These bankers are insufficiently taxed. We are a nation AT WAR. We need to tax accordingly.

Rich people want wars for nothing. They don't fight, and they don't pay to protect the ones who do. The biggest part of our budget is military. TAX THE RICH TO PAY FOR THE WARS.

[aquart]

2. Is it the Fed's job to tax the rich? No, it is ours. It is Congress'.

These bankers are insufficiently taxed. We are a nation AT WAR. We need to tax accordingly.

Rich people want wars for nothing. They don't fight, and they don't pay to protect the ones who do. The biggest part of our budget is military. TAX THE RICH TO PAY FOR THE WARS.

on edit: How did two of these appear at once? I think my mouse has gone mad.

[midnight]

3. K&R for course correcting this blight of entitlements for the

rich that are balanced on the backs of the poor.