Banker Bonuses: Not Such a Wonderful Life?

Astonishingly, bankers may have surpassed lawyers, journalists, and child pornographers as the country’s most reviled people. They did this through a combination of tanking the world economy; extorting money and property from customers and the government; and downright, naked and stupid greed.

Oh, and complaining they weren’t paid enough to do it.

A recent informal Vanity Fair poll indicated 56% of banking greedheads felt their bonuses weren’t large enough. Clearly, this is indicates an IQ so low or hubris so large they shouldn’t be trusted with piggy banks, much less handle your life savings and the wealth of the world.

What’s the Big Deal?
Many have made a big deal about the unfairness of this arrangement. Many have claimed the inequities of the US corporate compensation system is making us into a country of overwhelming class division. In short, many have been right. But the emphasis on class warfare and inequality is only half – maybe less than half – of the picture.

The It’s a Wonderful Life banks of yore were paragons of charity and virtue compared to the ginormous money-maws of today. Despite bankers being beholden to no one other than their hand-selected boards and compensation committees, they make business decisions based on a monthly horizon to enhance their ‘pitiful’ quarterly bonuses. A banker looking beyond a quarter would be locked up in the Insane Banker’s Asylum for the Criminally Greedy. One looking out into the vastness of time – next year – would be executed for their danger to society.

That short-sightedness explains their Nostrasdumbassian inability to have seen the economic crash coming. That blindness to the danger of their own practices screwed their customers, the public – and not least of all – their investors. And now that they’ve good and thoroughly fu*cked their investors, they’re back to the same asinine practices as before, except – like a anitbiotic-immune bacteria – they’ve strengthened and widened the gap between what is legal and what is common sense.

Exercising their much vaunted “skills”, they’ve used taxpayer money, much of which was skimmed off for last year’s bonuses, to ‘reinvest’ and reap near-record profits this year – thereby clinching this year’s bonuses too. The only people dumber than the bankers are their stockholders. They’ve cheered as bankers laundered the money into record profits, either blindlessly stupid or so greedy they don’t recognize this as what it is…a ponzi scheme.

Bernie Madoff must be so proud.

Because they need binoculars to see the ends of their noses, they don’t see that everything will happen again. Their penchant for driving resources offshore to avoid the taxes that comprised last quarter’s stunning economic ‘recovery’ make it harder and harder to extort money from a US government with less and less of it to give. Meanwhile, all those cozy offshore havens – many of which are as friendly to America as a pack of rabid wolverines – are perfectly positioned to nationalize our money to pay for their own bait and switch schemes.

And as the macro-economic robbery continues, the bankers will again be shocked at another “completely unexpected” event. All those jobs that moved or disappeared to make companies more “profitable” steadily depleted the pool of potential customers with money for the banks to steal use to continue the ruination of their Holy Grail – capitalism.

Oh, and that’ll be a $130 million bonus for the trouble.

Where Do I Sign Up?
Bankers – in fact, almost all business US Big Wigs – receive huge bonuses if profits go up or they go down. They receive bonuses from the very companies they ran into the ground to keep their “expertise” with the company. They get bonuses because they successfully lobby each banking reform attempt into a cozier and cozier government/business alliance that – guess what – awards them bigger bonuses. Investors look the other way as long as money is coming into the Ponzi triangle and most complain for show only when the dividends come due and the banks can’t pay them. Then, they angle for a big bonus to pay their wizards of financial acumen to figure out some other way to steal twice as much money – partly used for big bonuses – next quarter.

Many supporters of corporatism über alles claim the execs deserve the big bucks because they are risk takers. The only problem with that axiom is that they take those risks with other people’s money and get paid whether the risks pay off or not.

Unbridled greed is leading them to not only kill the goose that laid the golden egg, but eat the egg, dine on the goose, and steal  their neighbor’s fowl for another mighty fine meal. One paid for with unsustainable bonuses.

Ain’t it a wonderful life?

Cross posted at The Omnipotent Poobah Speaks!

 

 

Banker Bonuses: Not Such a Wonderful Life?

Astonishingly, bankers may have surpassed lawyers, journalists, and child pornographers as the country’s most reviled people. They did this through a combination of tanking the world economy; extorting money and property from customers and the government; and downright, naked and stupid greed.

Oh, and complaining they weren’t paid enough to do it.

A recent informal Vanity Fair poll indicated 56% of banking greedheads felt their bonuses weren’t large enough. Clearly, this is indicates an IQ so low or hubris so large they shouldn’t be trusted with piggy banks, much less handle your life savings and the wealth of the world.

What’s the Big Deal?
Many have made a big deal about the unfairness of this arrangement. Many have claimed the inequities of the US corporate compensation system is making us into a country of overwhelming class division. In short, many have been right. But the emphasis on class warfare and inequality is only half – maybe less than half – of the picture.

The It’s a Wonderful Life banks of yore were paragons of charity and virtue compared to the ginormous money-maws of today. Despite bankers being beholden to no one other than their hand-selected boards and compensation committees, they make business decisions based on a monthly horizon to enhance their ‘pitiful’ quarterly bonuses. A banker looking beyond a quarter would be locked up in the Insane Banker’s Asylum for the Criminally Greedy. One looking out into the vastness of time – next year – would be executed for their danger to society.

That short-sightedness explains their Nostrasdumbassian inability to have seen the economic crash coming. That blindness to the danger of their own practices screwed their customers, the public – and not least of all – their investors. And now that they’ve good and thoroughly fu*cked their investors, they’re back to the same asinine practices as before, except – like a anitbiotic-immune bacteria – they’ve strengthened and widened the gap between what is legal and what is common sense.

Exercising their much vaunted “skills”, they’ve used taxpayer money, much of which was skimmed off for last year’s bonuses, to ‘reinvest’ and reap near-record profits this year – thereby clinching this year’s bonuses too. The only people dumber than the bankers are their stockholders. They’ve cheered as bankers laundered the money into record profits, either blindlessly stupid or so greedy they don’t recognize this as what it is…a ponzi scheme.

Bernie Madoff must be so proud.

Because they need binoculars to see the ends of their noses, they don’t see that everything will happen again. Their penchant for driving resources offshore to avoid the taxes that comprised last quarter’s stunning economic ‘recovery’ make it harder and harder to extort money from a US government with less and less of it to give. Meanwhile, all those cozy offshore havens – many of which are as friendly to America as a pack of rabid wolverines – are perfectly positioned to nationalize our money to pay for their own bait and switch schemes.

And as the macro-economic robbery continues, the bankers will again be shocked at another “completely unexpected” event. All those jobs that moved or disappeared to make companies more “profitable” steadily depleted the pool of potential customers with money for the banks to steal use to continue the ruination of their Holy Grail – capitalism.

Oh, and that’ll be a $130 million bonus for the trouble.

Where Do I Sign Up?
Bankers – in fact, almost all business US Big Wigs – receive huge bonuses if profits go up or they go down. They receive bonuses from the very companies they ran into the ground to keep their “expertise” with the company. They get bonuses because they successfully lobby each banking reform attempt into a cozier and cozier government/business alliance that – guess what – awards them bigger bonuses. Investors look the other way as long as money is coming into the Ponzi triangle and most complain for show only when the dividends come due and the banks can’t pay them. Then, they angle for a big bonus to pay their wizards of financial acumen to figure out some other way to steal twice as much money – partly used for big bonuses – next quarter.

Many supporters of corporatism über alles claim the execs deserve the big bucks because they are risk takers. The only problem with that axiom is that they take those risks with other people’s money and get paid whether the risks pay off or not.

Unbridled greed is leading them to not only kill the goose that laid the golden egg, but eat the egg, dine on the goose, and steal  their neighbor’s fowl for another mighty fine meal. One paid for with unsustainable bonuses.

Ain’t it a wonderful life?

Cross posted at The Omnipotent Poobah Speaks!

 

 

The Privatization Mania Fades

David Harvey, the noted critic of neo-liberalism, calls privatization one of the four practices that characterizes the neo-liberal agenda. He terms it "accumulation by dispossession." Since the 1970s, privatization has been a mania, a usurping of the commons for individual gain at public expense. Granted in the US, state-owned enterprises are rare but that didn't stop the neo-liberal set from setting their sights on the acquiring public airports, bridges, roads, schools, hospitals, parks, utilities and even city parking rights. The stated purpose was efficiency but the real aim was simple avarice and greed. Now thankfully, this mania seems to be running out of steam.

There's more...

Is Pakistan's Civil War a Class War?

The wily and persuasive Pepe Escobar had a column today over at the Asia Times suggesting that Pakistan is now openly being run from Washington. Mr. Escobar is, I think, half-right or perhaps more succinctly put is not too far off in his location. By Washington, Pepe Escobar clearly means the White House and the Defense Department. He's got the city right but the institutions wrong. Pakistan's fate may have been sealed back in November when the country agreed to a $7.6 billion USD bailout from the International Monetary Fund (IMF).

Pepe Escobar, who is one of a last a dying breed the hard-nosed international correspondent, writes on the elements of class struggle in the current troubles in Swat Valley.

In this complex neo-colonial scenario Pakistan's "Talibanization" - the current craze in Washington - looks and feels more like a diversionary scare tactic. (Please see The Myth of Talibanistan, Asia Times Online, May 1, 2009. ) On the same topic, a report on the Pakistani daily Dawn about the specter of Talibanization of Karachi shows it has more to do with ethnic turbulence between Pashtuns and the Urdu-speaking, Indian-origin majority than about Karachi Pashtuns embracing the Taliban way.

The original Obama administration AfPak strategy, as everyone remembers, was essentially a drone war in Federally Administered Tribal Areas (FATA) coupled with a surge in Afghanistan. But the best and the brightest in Washington did not factor in an opportunist Taliban counter-surge.

The wily Tehrik-e-Nifaz-e-Shariat-e-Mohammadi (TNSM - Movement for the Enforcement of Islamic Law), led by Sufi Muhammad, managed to regiment Swat valley landless peasants to fight for their rights and "economic redistribution" against the usual wealthy, greedy, feudal landlords who happened to double as local politicians and government officials.

It's as if the very parochial Taliban had been paying attention to what goes on across South America ... Essentially, it was the appropriation of good old class struggle that led to the Taliban getting the upper hand. Islamabad was finally forced to agree on establishing Nizam-e-Adl (Islamic jurisprudence) in the Swat valley.

Mr. Escobar's article is not the first to report some element of economic strife or class struggle in Pakistan's descent into civil war. While much of the world's attention when it comes to Pakistan has been on the situation in the FATA and the Malakand which includes Swat, Karachi has been enduring rolling riots that over the past six months have left hundreds dead. While the media often plays up an ethnic component to these riots, the rioters generally have a few things in common, they are poor and they are quite angry.

There's more...

Governor Sanford's 'Savior-Based Economy'

"We're moving precipitously close to what I would call a savior-based economy. A savior-based economy sort of is definitional of what you see in Russia or Venezuela or Zimbabwe or places like that where it matters not how good your product is to the consumer but what your political connection is to those in power.

And if you think about the power that's been granted to the Fed of the Treasury, it has savior-like qualities. Everybody knows that we're in an economic slowdown. But the consideration now is, if I can just get my word, if I can be the plaintiff to the right person in Washington D.C., I can get these things fixed.

That is quite different than a market-based economy where some rise and some fall but there's a consequence to making a stupid decision."

I suppose that I am relived to learn that the Governor of the Palmetto state isn't talking about some impending rapture which was my initial thought when I saw the headline on CNN heralding the arrival of some 'saviour-based economy'. No, instead, Governor Mark Sanford is talking about good old fashioned class rape. Imagine my relief. The Governor's thinking is classic mid to late 19th Century laissez-faire and it is little more than class war rhetoric disguised as public policy. It is as if the Panic of 1857, the Panic of 1873, the Panic of 1893, the Panic of 1907, the Great Depression of 1929 never happened. Mr. Sanford certainly has not learned any of the lessons of these.  

We don't live on farms anymore. I can't grow my own food nor make my own clothes. I don't have a horse and buggy to get around in. But that's the world that is required to survive the onslaught of a systemic crash. Avoiding a systemic crash is the purpose of government intervention in the economy.

There's more...

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