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Lehman Brothers, Merrell Lynch, Goldman-Sachs, unless one has been living in the State of Denial, which I think may be somewhere in the mid-west, are well recognized examples of the corporate excesses that marked the virtual collapse of a substantial portion of the U.S. economy, are to be the object of unprecedented financial infusion of taxpayers’ money, the decision to take over extra-risky and failed loans made over the past few years, and, perhaps, most significant, the tacit admission by Republicans that they had appointed foxes to guard hen houses.
One result is the public’s being made aware of the high-rolling culture of Wall Street, with its seven-figure bonuses and lavish perks for even midlevel executives. As Charles Geisst, a professor at Manhattan College noted, “The kind of bonuses you saw on Wall Street over the last five years are not something you are likely to ever see again, not in our lifetime”
The scope of these excesses borders on the unreal, especially to those on far smaller incomes or to retired persons whose pension plans were often funder by the very companies on the verge of absolute closure.
As Stephen Foley of the London based The Independent wrote, “They call it Goldmine Sachs. And well they might. Because the Wall Street giant has become the first major investment bank to see its average salary top half a million dollars.”
Last year, Goldman Sachs paid out $11.7 Billion to its 22,425 employees. Hank Paulson, the chairman and chief executive, was paid $38 Million in salary, shares and options - a 21% increase over 2004. Taking all employees into account, executives, sales personnel, and secretaries, everyone, received an average figure per staff member of $521,000. This average is a12 % increase over the preceding year!
However in the Chutzpah Department, that information pales in the face of the announcement (admission?) that up to 10,000 employees of the collapsed Lehman Brothers in the New York office will share a bonus pool set aside for them that is worth $2.5 Billion. This was confirmed by Barclays Bank, which is buying the business. Lehman’s staff in London, about 5,000 people, is especially angry they have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash in Great Britain and Europe over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.
These companies are the recipient of Federal welfare payments. Make no mistake, if the recipients were single mothers receiving Food Stamps or people receiving state or Federal public assistance, they would be held up to scorn and ridicule by the very people who now need assistance.
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