Americans are outraged at Wall Street and the country’s big banks for several reasons, the least of which is the latest report that bonuses for financial execs increased 25 percent in 2009. Millions of Americans are out of work, unemployment is at the highest it’s been in a decade and the country continues to suffer economically. Yet, an industry that had to be bailed out by taxpayers can afford to reward its top officials. Americans have a right to be outraged.
It wasn’t that long ago – just over a year – that the United States government offered up $700 billion of taxpayer money to prevent the financial industry from collapsing. Years of unregulated financial dealings and the purchase of faulty credit assets by the banks led to that moment and, without the bailout, our economy would have suffered tremendously.
Now, it seems the financial industry has not only “recovered”, it is benefiting from the loan. The dollars use to save the industry were utilized to generate historic profits for the big banks…they in turn gave themselves both cash and non-cash bonuses.To be fair, when a company does well it should reward it’s staff. But when a company is just coming off of one of the biggest financial disasters in history, profits should be reinvested to ensure future financial stability. They should not reward leaders for short-term success. Instead, long term stability should be their reward. Reinvesting in the business and industry includes hiring more staff. Most economists think the huge profits are a result of the banks laying off staff or terminating jobs and giving more work to the employees that remained. Less staff and overhead costs equal bigger profits.
We should all write legislators and advocate that the government tie financial sector pay to the long-term financial success of the firms. These short-term gains are great, but are not indicative of the overall health of the industry. Critics argue that government should not intervene and has no place mandating how banks pay staff. I disagree. When the taxpayers are responsible from saving the sector from collapse then the government, as our representative, does and should have a say.
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Judge Mathis,
I completely agree. This concern doesn’t even mention the already overpaid annual salaries these coprporate executives get for themselves. The whole situation feels like one big scam led by politicians who either came from the private corporate sector or plan to enter the private corporate sector after their public service. The “Rich” protect their own kind.
I’m afraid that while making complaints to our political leaders is the “American” thing to do, it would be a moot exercize because we’d only be complaining to the greedy monsters that have already sold out to their own personal interests. I’m sure there are a few politicians that are not crooks, but it is very difficult to find an honest politician who sincerely wants to FIX America. What can we do?