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It appears to be a truly amazing feat of magic. Right before your eyes, this thing rises into the air on its own, with no wires or mechanical devices giving it lift, and it hovers there effortlessly.
But it’s not magic, for magic is an illusion, and this gravity-defying phenomenon of perpetual levitation is real. What is this “it” that keeps floating up, up, up? The annual bonuses paid to Wall Street’s top bankers.
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By the laws of economics, if not physics, bonuses should fall to earth this year, because the bankers have performed poorly. Trading is down, profits are flat (despite being given trillions of dollars in almost-interest-free money by the feds), firms are firing lower-level employees, and banker greed has ruined the public reputations of the financial giants.
Who cares, shriek the big shots – its bonus time, baby, so grab all you can! The CEOs of Goldman Sachs, Citigroup, JPMorgan Chase and others have set aside billions of dollars to flood their executive suites with bonus cash at the end of the year – money that should go to shareholders. Their claim is: “We deserve it, for we took low pay during the crash of 2008-2009.” For example, Lloyd Blankfein, Goldman Sachs’ boss was paid a mere $9 million last year, so this year he wants that “sacrifice” to be made up to him.
However, lest you worry that poor Lloyd’s family needed food stamps to make ends meet in that tough $9-million year, note that he had a bit of a cushion, having pocketed a record Wall Street payday of $68 million in 2007 – even as his bank was crumbling.
One executive pay analyst says he assumed that bonuses would go down this year. But, he said, “I underestimated the industry’s resiliency.” By “resiliency,” I assume he was referring to the industry’s incurable greed.
“Wall Street Gets Its Groove Back, And Big Pay, Too,” The New York Times, November 4, 2010.
“Wall Street’s Profit Engines Slow Down,” www.nytimes.com,” September 19, 2010.