This is simply outrageous. Even as the rest of the nation continues to suffer from rising unemployment and severe hardship, the same banks that we bailed out at enormous taxpayer expense one year ago are handing out record pay and bonuses to its employees.
Nobel Prize-winning economist Paul Krugman spells it out:
What’s wrong with financial-industry compensation? In a nutshell, bank executives are lavishly rewarded if they deliver big short-term profits — but aren’t correspondingly punished if they later suffer even bigger losses. This encourages excessive risk-taking: some of the men most responsible for the current crisis walked away immensely rich from the bonuses they earned in the good years, even though the high-risk strategies that led to those bonuses eventually decimated their companies, taking down a large part of the financial system in the process.
New York Times columnist Bob Herbert adds:
We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted.
And we still don’t seem to have learned the proper lessons. We’ve allowed so many people to fall into the terrible abyss of unemployment that no one — not the Obama administration, not the labor unions and most certainly no one in the Republican Party — has a clue about how to put them back to work.
Meanwhile, Wall Street is living it up. I’m amazed at how passive the population has remained in the face of this sustained outrage.
Even as tens of millions of working Americans are struggling to hang onto their jobs and keep a roof over their families’ heads, the wise guys of Wall Street are licking their fat-cat chops over yet another round of obscene multibillion-dollar bonuses — this time thanks to the bailout billions that were sent their way by Uncle Sam, with very little in the way of strings attached.
Whether it's the Savings and Loan scandal of the 1980s or the Dot.Com bubble of the 1990s or the Enron collapse or the mortgage meltdown last year -- it's always the same old story. The rich and powerful Wall Streeters take huge risks and when all hell breaks loose, they get bailed out by the taxpayer, while needy individuals get little social protection. In other words, losses are socialized and profits privatized; it's socialism for the rich and capitalism for everybody else.
When do the Obama administration and the Democratic legislative leadership begin to address the underlying problems of the economy and reform of the seriously broken financial system? Tough talk is not enough, Mr President.
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