Congressional Sound and Fury Over Wall Street Bonuses Sure to Signify Nothing

A firestorm of criticism was unleashed from Washington at bonus-reaping-while-Wall-Street-burns bankers, with President Obama deigning to join in the fray. The tone was unusually heated:

President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains mired in a recession.

The bonuses are “the height of irresponsibility,” Obama said today before meeting Treasury Secretary Timothy Geithner and Vice President Joe Biden at the White House. Firms need to “show some restraint and show some discipline,” Obama said.

And the funniest, or most pathetic, depending on your point of view, was this:

The president joined politicians such as Senator Christopher Dodd, who today called for using “every possible legal means to get the money back.” The bonus pool for 2008 by New York City financial companies was the sixth-largest ever amid record losses in the securities industry,…

“I’m going to be urging — in fact not urging, demanding — that the Treasury Department figures out some way to get the money back,” Dodd said. “This is unacceptable.”

Now this blogger is as irate about the payment of largely unwarranted bonuses as anyone. In any other industry, firms losing money on a survival-threatening scale would have eliminated them or targeted them far more selectively, well, save for the auto industry, which serves to prove the point.

However, the Congressional hyperventilating is a shameless diversionary tactic. Let us turn to philosopher Rodney Dangerfield:

If you steal $1000 from a convenience store, you go to jail for ten years. If you steal $100 million, you get called before Congress and called bad names for ten minutes.

The tongue lashing might go on a little longer this time, but the general observation holds.

If Congress wants to assign blame, it might start by looking in the mirror. It has made a ritual of occasionally getting exercised about executive pay, calling some hearings and trying to make high fliers squirm, and then proceeded to do nothing, That makes it abundantly clear that they intended to do nothing, giving the perps to continue as before.

For those who claim that big pay is needed to motivate and reward superior CEO performance, there is ample evidence to the contrary. Studies have found that companies with the highest paid CEOs tend to underperform (one theory is that the high pay is a symptom of weak corporate governance). Similarly, Jim Collins, in his book Good to Great, found that the companies that produce consistent, long-lived superior results were without exception lead by modest and not terribly well remunerated executives.

And trying to shift blame for the TARP-funding-bonuses fiasco solely to the admittedly badly behaved but completely predictable Wall Street firms is absurd. Congressmen signed off on comp restrictions that were known at the time to be toothless, mere window dressing, so they could say they had gotten concessions from Treasury on that point. As we remarked back in September, when Treasury had the temerity to have a private briefing for members of the Securities Industry and Financial Markets Association, and not the broader public:

The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes. More detail on that point, but I don’t need more detail to get the drift of the gist.

And of course, the bill’s provisions pertained only to top officers, not to the highly paid rank and file, who received the lion’s share of the bonuses.

That rather basic point in missed by commentators. Back to the Bloomberg article:

Treasury has the authority under legislation that created the TARP to issue regulations that “claw back” excessive executive compensation, said Larry Hamermesh, a corporate law professor at Widener University in Wilmington, Delaware.

“It was pretty clear from TARP I that the secretary of the Treasury was supposed to establish a provision for executive clawback,” Hamermesh said in a phone interview. “How the secretary has implemented that isn’t clear.”

The Treasury could require companies that request additional funds to repay excessive bonuses as a condition of the further financing, Hamermesh said.

Really? The TARP defines “executives” as “one of the top 5 executives of a public company, whose compensatoni is required to be disclosed pursuant to the Securites Exchange Act of 1934….and any non-public party counterparts.” So it apples to a teeny fraction of the bonus recipients in the limelight.

And even then, the clawback had little reach:

a provision for the recovery by the fnancial institution of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate

Mind you, this language originated inthe 110 page intermediate version of the TARP legislation, the one presented to the House in September in which Dodd played a major role.

No one has said that these firms misrpresented 2008 performance. They said they had dreadful years and paid bonuses anyhow.

And some of the high profile examples are beyond any reach. John Thain gave up his 2008 bonus already; his $15 some odd signing bonus was pre-TARP, so he does not appear to have gotten any TARP funds. Thain hired Thomas Kraus from Goldman to be global head of sales and trading with a guaranteed bonus of $39 million. Peter Kraus, another Goldman recruit, who joined as of September, had a clause triggered by the Bank of America acquisition that leads to a $25 million payout.

Lawyers and comp experts are welcome to chime in, but I do not know of a legal theory by which the bonuses could be clawed back. The only ones I can think of are embezzlement and fraudulent conveyance, neither of which applies (OK, maybe a very clever attorney could devise a theory that the entire bonus process 2006-2008 at big public investment banks was a conspiracy to embezzle, but it would take a ton of discovery and would be seen as striking at the heart of capitalism, such as it is, and so would go nowhere). Fraudulent conveyance in simple terms allows creditors of a bankrupt firm to challenge and recoup certain payments made shortly prior to bankruptcy. Since none of the TARP recipients are bankrupt (the whole point of TARP was to avoid bankruptcy filings) that’s a non-starter.

The best the chumps powers that be can hope for is a few ritual disgorgements. For those who aspire to a life in the public eye, that might make sense. But Dick Grasso, whose pay by any standards was grotesque (as was his self importance, claiming responsibility for getting the NYSE running post 9/11 when firefighters and Verizon technicians, many of whom ruined their lungs, played a far bigger role) still won a pitched battle with Eliot Spitzer (who had a legal theory that I thought had considerable merit: that the comp was inconsistent with the NYSE’s status as a not for profit). So if anyone decided to put up a battle, it is hard to see how they could be compelled to return the money.

Put it another way: if Congress is unwilling to find a way to intervene in securitization agreements to facilitate mortgage mods, a far more important problem, both politically and practically, they are most certainly not going to meddle here.

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53 comments

  1. Anonymous

    Great analysis Yves! Alas I agree with you. The political posturing is meaningless. The bankers are controlling the whole process behind the scene.

    P.S -I’ve come to the realization that Geithner would make an exemplary muppet. Oh, Jim Henson, where are you when we need you!

  2. Anonymous

    Hard to get tough on the guys feed your campaign contributions. If I remember right “O” himself got about 650k from these lotters while McCain got about 250K.

    This country is a banana republic where government leaders are either incompetent or corrupt. No Change.

  3. Lune

    There's only one way to "clawback" all that bonus money: restore the 90% marginal income tax rate on any earnings over $1mil. The percentage of Americans earning >$1mil who are not in the financial industry is quite small indeed.

    And to those who’ll inevitably scream that this will reduce the incentive to work hard and earn that money, I say: good riddance! We’ve seen the result of that “incentive to earn” play out on Wall St. and we’re all the poorer for it.

  4. Simpson

    RICO baby! If I was AG for SDNY I would nail them under RICO and they would be forced to forfeit all ill-gotten gains. I am sure I could prove that the i-banks were criminal enterprises under RICO. They would only have to have committed 2 offenses including: obstruction of justice, gambling or money laundering. No problem.

  5. bg

    I think Lune makes a good point. Although I think 90% marginal rates would destroy investment, they did pull off a retroactive windfall profits tax in 1980 on one industry. It seems equally (il)legal to do the same for windfall bonuses paid to companies on the dole.

    The politicians will need scape goats (and I disagree they will pound them to sand) just as they (diverted attention) prosecuted people (Treasury secretary Mellon).

    The anger against congress is going to go hot again soon, it is only the short term honeymoon of Obama that is giving them some time without pressure. But they will do something. We may like it at first, but might not like it the next morning.

  6. bg

    “P.S -I’ve come to the realization that Geithner would make an exemplary muppet.”

    No, somebody really needs to photoshop this as a klingon. It is better than Tina Fey as Sarah Palin

    Timothy Geithner

  7. Bonesetter Brown

    Forget about fraudulent conveyence, what about criminal prosecution for fraud?

    I can’t imagine the Cioffi indictment will be the only one arising from this mess.

    How about $1B of special funds for the AG? It amounts to chump change but it sure could feel good.

  8. Yves Smith

    Bonesetter,

    There should be far more discussion of fraud, particularly regarding financial statements and management presentations about the health of these companies. William Black (who lost the political fight at the FDIC to go after Charles Keating and was later vindicated) says the accounting at big financial firms is every bit as bad as at Enron.

    However, that doesn’t solve the bonus problem. Only the very top guys played a role in the misrepresenting of results (well, maybe some helpful staffers in finance function too). But the vast majority of bonus recipients did not have any corporate duty of care, only the officers do. And part of their duty is to make sure proper control and reporting mechanisms are in place.

    In other words, I don’t think it would be easy to claw the money back from (relatively) passive beneficiaries of fraud. And no one in authority is willing to use the F word.

  9. bg

    I honestly don’t know what F word you are talking about. Fnationalization? Fbankruptcy? Ftaxes? Funemployment?

  10. Yves Smith

    bg,

    My comment was in response to Bonesetter on fraud and used that F word in the text as well.

  11. bg

    Aren’t politicians supposed to refrain from public discussions of future actions on the part of the Justice department? The theory being that they might at best harm the case, and at worse embroil themselves?

    Isn’t ‘irresponsible’ and ‘return that damn plane’ pretty good for a week old president?

  12. locust

    The longer this goes on, the closer we get to a 21st century version of the guillotine. What that is, I don’t know. And I really don’t want to find out.

  13. Babe's Ghost

    Let them eat cake!

    I’ve been saying that when everything is much much worse in two years and Bam has revealed himself to be the $69 million dollar puppet of the FIRE industries, that a very angry populist movement will arise and then we’ll get a shot at RICO. We’ll target everyone up and down the origination chain and the song will be 10 years per count and triple damages.

    Keep in mind, this is the “good scapegoating” not the bad Wiemar kind. That unfortunately, is no longer completely out of the question.

    Fbankruptcy! You made me laugh out loud bg.

  14. Babe's Ghost

    Let them eat cake!

    I’ve been saying that when everything is much much worse in two years and Bam has revealed himself to be the $69 million dollar puppet of the FIRE industries, that a very angry populist movement will arise and then we’ll get a shot at RICO. We’ll target everyone up and down the origination chain and the song will be 10 years per count and triple damages.

    Keep in mind, this is the “good scapegoating” not the bad Wiemar kind. That unfortunately, is no longer completely out of the question.

    Fbankruptcy! You made me laugh out loud bg.

  15. Anonymous

    Don’t they give the bonuses so that everyone kept their mouth shut… No money, unhappiness, someone would start talking.

  16. JDM

    There should be far more discussion of fraud, particularly regarding financial statements and management presentations about the health of these companies.

    The MBS securitization process was still going on in September 2008, correct? Is there any way a jury could be convinced that these firms didn’t know the house of cards was collapsing by then?

  17. freude bud

    I forget just which Supreme Court Justice said it first, but the Constitution isn’t a suicide pact.

    As Justice Oliver Wendell Holmes Jr. said, “The law is the will of he who the sheriff will obey.” Meaning the law is whatever the judge says the law is, given that the sheriff will do his bidding.

    If things get as bad as you suggest they will, do you think the sheriffs will feel uncomfortable clawing back those monies?

    But, beyond that, Congress writes the laws. And if Congress ends up owning the banks, that particular lobby will not have all that much say.

    Playing chicken with the government is a dangerous game.

  18. Expat

    There are myriad defenders of Wall Street bonuses with similar general arguments: Salaries are low so bonuses are only fair; If we don’t pay them, we will lose our staff; It is unfair to penalize money-makers when others lose.

    Let’s demolish these one by one, shall we?

    If salaries are so that bonuses are necessary and fair, then make salaries higher. This will reduce moral hazard within the bank by preventing traders from making heads-I-win, tails-you-lose bets with the bank’s money.

    Where will traders go in such markets? To the competition? Not if all banks act in the same way.

    Much of the money made by banks over the past decades stem from the generalized credit bubble. While the MBS and CDS traders may have lost half a trillion, the profits made by a mortage broker within the bank were only possible because of the shennanigans of the MBS trader. The major problem is that blame for losses is very often shifted resulting in traders and managers receiving bonuses no matter what happens. If the company as a whole loses money, no bonuses should be paid.

    I am speaking as a trader with twenty years of experience on Wall Street and in private trading firms.

  19. Richard Kline

    It is worth noting that PresO’s comments indicated exactly _nothing_ in intended substantive actions to prevent future bonus heists or remedy past ones: it was a toothless “Don’t blame me, blame those naughty boys” rot. The man gives every evidence of active political antennae and and absence of spine. And there is no way, _no way_ O can claim to be behind the curve on this issue since he actively campaigned on it during the course of the past year. Now, when he has power he proposes nothing meaningful.

    Regarding these ‘bonuses’ themselves, look the whole FIRE sector runs on a culture of entitlement: they are the alpha class, and they are entitled to the money by class privilege. These lump sums have nothing to do with performance, nothing at all; they are the entitled perks of sinecure holding. The only problem is to find the schmoes to generate the cash flows to siphon off. Since FIRE creates _nothing_, they have to persuade or con others into giving them the money. Which others have done, but will be doing less. So Other Powers That Be are admitting now that they—i.e. We the Sheeple—will have to fork over the wealth entitlement payouts directly. Yes, yes, the visuals are, well, BAD. So a little steaming before the cameras is meant to throw the newshacks off the scat for a few hours so another multi-hundred-billion dollar increment can be transferred from our children to the present wealth class sinecure holders.

    Watching this is excruciating, and an indictment of how completely inept the American people have become at participating in their own destiny—but that’s what all the bread and circuses and Idols and purty colored jerseys of CI-altered playing fields are for, to mesmerize the rubes. However, I am willing to watch it, and moreover I also hope that it continues at levels even more egregious and public: This is the only way to generate enough popular anger to blow enough pillars out from under The Man’s System that it caves in. Insult their (admittedly scant) intelligence; insult their wallets; insult their children; and bill them by the hour for the privilige of the experience. More, bigger, and faster, sez I; America’s Americans need to be madder than they are. We no longer have Bush to blame for our failures, and for that I’m glad. He was the liberals’ stuffed dummy to blame for everything and cast tomatoes at. Now that said liberals are pursuing _exactly the same policies_ with him gone, the evidence of our one party political system is, well, more evident. . . . That’s progress, of a sort. Of course, disillusionment breeds fascism, so it would be nice to see more determined reformers and radicals in view than are evident just at present . . . .

  20. Anders

    In the news, we have an example of the difference between $100 and $500M:
    http://i41.tinypic.com/28k35ly.jpg

    Admittedly, the $500M person got sent to prison – I can only assume this is due to inflation. Friends of public order will be reassured by the $100 robber being sent away for longer than expected, though.

  21. Disappointed

    Well, one thing the outrage should do is endanger more TARP money from being approved. At this point, who thinks that it is well-spent? And the grave hypocrites, Dodd and Frank, should be leading the charge for transparency in current TARP spending and Schumer should be sent on a tour of duty overseas so he can stop his incessant lobbying on behalf of the financial industry. Try spending 1/100th of the proposed money on upstate New York, rather than just feeding it into the New York co-ops whose prices MUST be stabilized.

  22. patrick neid

    “Put it another way: if Congress is unwilling to find a way to intervene in securitization agreements to facilitate mortgage mods, a far more important problem, both politically and practically, they are most certainly not going to meddle here.”

    Congress, in its wisdom, is too busy touching itself dreaming of the trillion dollars they are about to spread around like fairy dust. 18 billion in bonuses is chump change by their standards. In fact it is very helpful in deflecting attention from the real perps—Politicians.

    I say sit back and enjoy the ride as we circle the drain. Perhaps if we are lucky as we lose our fervor for stock investing we will also come to rue government as a solution. Regrettably it is going to cost us trillions during the learning curve, as it should. After all, the madness that allows one to think that the folks in DC can solve significant economic issues should cost a lot of money—otherwise the lesson will never be learned.

  23. fresno dan

    I stand second to none in my outrage about bonuses to executives who bankrupt companies and who didn’t know or didn’t care about the financial risks they took.
    But throwing a bucket of water on a drowning man cause you say he’s on fire is not a solution.
    Stockholders supposedly own the company – they decide on the board and the compensation policies. For those who would say that the small investor has no influence on the workings of the company, I would say “exactly.” And than I would ask, “Why do you invest in such a scheme that enriches the venal and impoveriches yourself?”
    I used to believe in stocks in the long run – but investment isn’t about faith, its about reality.

  24. Anonymous

    In the news, we have an example of the difference between $100 and $500M:

    That is so totally f**ked.

    restore the 90% marginal income tax rate on any earnings over $1mil.

    Meh. I’d rather have 5 years of a 1% wealth tax (that’s the only way anything will be “clawed back”) and make effective rates match nominal rates for high earners.

    Meanwhile, the group’s average income tax rate — calculated as income taxes paid as a percentage of adjusted gross income — fell to 17.2%. in 2006 from 18.2% the prior year. That’s down from a high of 29.9% in 1995.

    But fixing the tax code wouldn’t make big donors happy – they paid a lot for those loopholes.

  25. Anonymous

    Washington never ceases to amaze me. Dodd opining on $16 billion of “bonuses,” when the government awarded over $350 BILLION in private contracts in 2008 alone(think “Bridge to Nowhere” in Alaska)is a joke. Many of these private contracts are structured as “contract-plus” agreements, where the “plus” represents nothing other than bonuses. These bonuses often award incompetence, and they have become commonplace contract provisions that are awarded regardless of the private contractors’ performance. Many of those awarding the contracts in Washigton go on to eventually work for the companies they spoon feed. It is such a racket that costs the American txpayer FAR MORE than $16 billion annually. The ire of the people is misplaced. The “sound and fury” is indeed nothing more than diversionary tactics and shameless self-promotion on behalf of Washington fat cats.

  26. Anonymous

    Yesterday I was struck by the image of tractors blocking the major roads in Greece. This demonstration has been going on for nearly a week we were told and relates to the actions of the government to the current economic crisis. Today we hear how the Turkish prime minister stormed out of a meeting at Davos and European ministers got very upset about repeated questioning about the demise of the euro.

    Tempers are running high and contracts or not if every interstate was blocked for a week then those bonuses would be recovered. The government will become much more of a slave to the whimsies of the populace before we are through. Some may say that it is about time while others will remind that there are very good reasons to uphold those protections set up in the past. Politicians ought to actually clean up their own acts with bonuses while they are at it.

    In the mean time we await the GDP figures for Q4 to be announced which we all suspect will be manipulated to show things less bad than they really are initially only to be downgraded later. From what I am hearing though Q1 is going to be a real cruncher with even the likes of Walmart starting to feel the pinch.

  27. Anonymous

    This is why, of course, so many of us LOATHED the TARP. Provisions limiting compensation should’ve been put in there, but no–it was a mad rush to get the turd out the door.

  28. Jesse

    It is time to begin serious, and significant, systemic reforms in the banking system.

    Maintaining the status quo will be fruitless because the system is broken. Trying to keep it from becoming ‘more broken’ is a nice short term fix, but we are beyond that now.

    The system is broken. We need significant changes and reforms.

    A nice short term fix would be to institute a marginal income tax rate of let’s say, 80% at the 20 million dollar level, and let the AMT reflect that, with a significant raising of the levels of income that trigger the AMT. It was always intended to be a safeguard against loopholes for the highest income brackets.

    Bring back Glass Steagall.

    Let Goldman and Morgan get into the conventional banking business after passing through receivership.

    Too radical? Then you’re not ready yet for the changes that are required to end this cycle of boom, loot and bust.

  29. donebenson

    I would like to try and take a longer term perspective on those unbelievably obnoxious bonuses on Wall St.

    I think Wall Street’s inability to realize the game has changed is similar to its response to the 1929 crash. The Great Depression ultimately left Wall St. decimated [the 1929 Dow Jones high of 381 wasn’t reached again until 1954, 25 years later].

    When I first started working in the investment community in the mid 60’s, Wall St. was just beginning to recover from decades of being a sleepy backwater of NYC.

    The gross excesses in valuations, greed, arrogance, and mendacity that became accepted practice on Wall St. have again resulted in the ‘end of an era,’ just like in the 1930’s. The gross issuance of bonuses is one of the last dying acts of a community that does not realize it is in a serious decline [one for me that can’t happen fast enough].

  30. Anonymous

    May I suggest a French-style revolution, complete with reinstatement of the guillotine?

    Vinny Goldberg (rushing to his neighborhood gun shop to buy another coupla 12 gauge pump Remingtons)

  31. Anonymous

    a guaranteed bonus

    The real problem here is the pay is spelled out in the employment contract and is guaranteed. It’s not really a bonus, it’s a lump-sum payment.

  32. Anonymous

    I would say for anyone below Managing Director level in an investment Bank, the bonus is actually an accured but unpaid overtime pay – who is going to be working for 80-90hrs a week for $100k base salary?

  33. polit2k

    Shareholders are the ones who should have some resposibility for allowing bonus schemes to get out of hand. As they obviously failed then perhaps they should be told to expect 100% haircuts when banks are nationalised.

  34. Anonymous

    I agree the liklihood of recouping/disgorging 2008 payments is quite low. HOWEVER, I think the liklihood of Congress shutting the door on high compensation in 2009 and beyond for any firms that received federal funds IS VERY POSSIBLE.

  35. Claw

    Maybe Congress could pass a law requiring any financial company that receives assistance from the federal government (including the Fed) to fire any employee who does not “voluntarily” return his/her bonus.

  36. Anonymous

    Re: Anon @ 1:31PM

    “who is going to be working for 80-90hrs a week for $100k base salary?”

    Many people in many careers including physicians who pay for the privilege of working 80+ hours per week during school and then work even more hours while compensated at roughly median income (far less that your $100k base) for years during residency training.

    The ballooning salary for some once they complete said training is nowhere near Wall Street bonus compensation levels.

    This is only one example. Bankers control the money and make sure that they take their cut up front. No other field has such outrageous compensation, regardless of hours. We should penalize this egregious entitlement.

  37. Boomka

    Yes Wall Street is overpaid.

    But look at the Bloomberg articles that Yves linked to earlier, about government contracts. I quote:

    By contrast, the government spent $368.4 billion on all contracts in 2008, and Republican Oklahoma Senator Tom Coburn estimates that about $100 billion of that was wasted.

    So Wall Street only wasted 16$ billion out of 350$ – much leaner than the government itself!

  38. Anonymous

    like an earlier post the far more sensible idea would be to give shareholders real say ( what we have right now is a joke ) with capability to claw back . make it as a matter of law .
    not some thing phoney symbolic gesture suggested by useless whore barney frank .
    or any other inept and corrupt congress critters [ totally sold out Dodd as reformer ! pleeeeaassee ] legislating it ( which would be in any case written by rotten lobbyists / lawyers in any case ) .
    not that i am holding my breath as new and improved mr.change got his big initial money and later substantial sums from wall street on his way to white house .

  39. Anonymous

    “who is going to be working for 80-90hrs a week for $100k base salary?”
    Many people in many careers including physicians who pay for the privilege of working 80+ hours per week during school and then work even more hours while compensated at roughly median income (far less that your $100k base) for years during residency training.

    Yeah, but physicians are generally hard-working individuals who have studied and worked hard, and are often driven by sound ethical principles.

    On the other hand, these Wall Street types are little more than air-headed white collar crooks who chose the easiest major in college (business), and got their job through connections, bribes, and nepotism. When Wall Street won’t be profitable anymore, it’s likely they’ll be the losers pushing drugs on your kids.

    Vinny Goldberg

  40. Anonymous

    The greedy bankers on Wall Street have no morals at all. “Hooray for me, the hell with you” is their mantra. This latest charge of excessive bonuses in the face of a bailout again paid for by the hard working citizens of this country is the final straw. We bailed them out in the eighties with the Mexico and Brazilian loans, we did it again in the S&L nightmare, and now their greed causes yet another bank crisis, only this time it’s reached an uncontrollable limit. I say, let them drown, and let the investors feel some wrath. Maybe next time they’ll think twice. These bankers have pissed away our money, made highly speculative bets, and paid themselves richly, all the time knowing that if they failed – we’d come to their rescue. I say let them hang, allow the companies to go belly up and then prosecute their greedy asses one by one. The attorneys will milk them dry in their defense – or at least make them feel the pain.

  41. Anonymous

    Republican Oklahoma Senator Tom Coburn estimates that about $100 billion of that was wasted.

    Bulls**t. Waste and Fraud™ is always a winning campaign soundbite, but nobody and I mean NOBODY has ever found waste and fraud at anything like the level politicians claim exists during campaign season.

    Besides, you’re quoting a Republican. WTF could he possibly know?

  42. Anonymous

    The outright theft of the U.S. people is shocking……and its being done right out in the open…..with no sign of shame at all. When you see such criminal behavior being perpetrated so unabashedly, you know it won’t be long before a full scale revolt is initiated.

  43. Anonymous

    Outrageous is barely descriptive of what the Wall Street Elite have done. The best I’ve seen so far is Rudy Giuliani defending the bonuses as essential for maintaining the budget of NYC. So now we MUST pay bonuses to maintain NYC. As for me, and almost everyone I know, NYC can go POOF in a giant mushroom cloud and we would hardly care. Hopefully it will only envelope the ibankers/traders and other fake money makers.

  44. Anonymous

    The Washington Post reports that the Obama administration has finished drafting the central elements of the plan, and that it is not likely to impose tougher restrictions on executive pay.

    Contact your members of Congress to support Sen. McCaskill’s bill. The speech and the text of the bill is on her website. On the right side of the screen click on watch video. At the bottom of the video page there is a link to the entire bill, which is only two pages.

    http://mccaskill.senate.gov/

  45. Cap'm

    “Now look over here, at this hand, the one I want you to watch, so you don’t see my other hand in your back pocket” should be in a dialog bubble over “O’s” head as he goes on about the bonus pay on Wall St. Please, everyone here harping on this issue; take your eyes off of this “slight-of-hand” distraction and see what this man and his congressional friends are doing with their other hand. While they go on about this populist issue, and hit us over the head with these dollar figures of $900Billion, and Trillions, so we get desensitized to them, they reach around with their magician’s dexterity and slip in this bill and that bill, taking us down a road to socialized medicine and worse. This outrage is so misplaced that “O” must be thinking that he may just be able to walk on water, just like all of the knuckle-heads that voted for him must have thought. SHIP and increases in Medicare/Medicaid are the easiest way for the socialist snake to enter our homes and coil around us in what many will think is a warm, secure embrace, but then they will not notice the incremental tightening and squeezing that will take more and more of their life, their freedom, little by little.

    The only way to have Wall Street clean up its act is to let it fail. The first step down this road I’m talking about was the TARP funds, and the misuse of those funds. We were told that “We had to pass it or we would fall off a cliff!” Well not even half of the money has been used, we haven’t fallen off that cliff, and Wall Street is nibbling at the teat for more. Haven’t we learned by now that when the Government sticks its ugly head in, nothing good ever happens. If we want to fix the bonus problem, let the SOBs fail, and get kicked to the street. It’s hard to get a bonus when you’re pounding pavement. Many times, the only way an addict realizes he is one is when he hits rock bottom. These Wall Street folks will learn if we get out of the way, let them fail and let the market buy up those assets, and there will be buyers, and create more efficient companies that respond to their stockholders. Wanting to tax high incomes at 80% or 90% won’t fix a damn thing, it will just keep these folks buying Congressmen and the loop-holes in the 18,000 page tax code that they need to keep the status quo. This administration is the best thing ever to happen to K Street, when they want to spend like there’s no tomorrow, which there won’t be for our kids of we let them.

    The only fix is a revolution, one that kicks the IRS to the curb and we have a constitutional amendment that brings in the only way to limit the power of government and lobbyists, and that is the Fair Tax. Tax relief, not spending will dig us out of this hole we’re in and free us from the heavy hand of the Federal Government. Google it, look into it and learn about it and you will find that nothing out there would have as big an impact to changing the balance of power and bringing businesses back to the US than passing this in to law. What will it take, and act of congress. Not this congress, but one that comes after, after the public has had enough of their rights and lives being stepped on by this liberal, socialist government that thinks it is the answer, when as a great president once stated, “it is the problem!”

  46. Cap'm

    “Now look over here, at this hand, the one I want you to watch, so you don’t see my other hand in your back pocket” should be in a dialog bubble over “O’s” head as he goes on about the bonus pay on Wall St. Please, everyone here harping on this issue; take your eyes off of this “slight-of-hand” distraction and see what this man and his congressional friends are doing with their other hand. While they go on about this populist issue, and hit us over the head with these dollar figures of $900Billion, and Trillions, so we get desensitized to them, they reach around with their magician’s dexterity and slip in this bill and that bill, taking us down a road to socialized medicine and worse. This outrage is so misplaced that “O” must be thinking that he may just be able to walk on water, just like all of the knuckle-heads that voted for him must have thought. SHIP and increases in Medicare/Medicaid are the easiest way for the socialist snake to enter our homes and coil around us in what many will think is a warm, secure embrace, but then they will not notice the incremental tightening and squeezing that will take more and more of their life, their freedom, little by little.

    The only way to have Wall Street clean up its act is to let it fail. The first step down this road I’m talking about was the TARP funds, and the misuse of those funds. We were told that “We had to pass it or we would fall off a cliff!” Well not even half of the money has been used, we haven’t fallen off that cliff, and Wall Street is nibbling at the teat for more. Haven’t we learned by now that when the Government sticks its ugly head in, nothing good ever happens. If we want to fix the bonus problem, let the SOBs fail, and get kicked to the street. It’s hard to get a bonus when you’re pounding pavement. Many times, the only way an addict realizes he is one is when he hits rock bottom. These Wall Street folks will learn if we get out of the way, let them fail and let the market buy up those assets, and there will be buyers, and create more efficient companies that respond to their stockholders. Wanting to tax high incomes at 80% or 90% won’t fix a damn thing, it will just keep these folks buying Congressmen and the loop-holes in the 18,000 page tax code that they need to keep the status quo. This administration is the best thing ever to happen to K Street, when they want to spend like there’s no tomorrow, which there won’t be for our kids of we let them.

    The only fix is a revolution, one that kicks the IRS to the curb and we have a constitutional amendment that brings in the only way to limit the power of government and lobbyists, and that is the Fair Tax. Tax relief, not spending will dig us out of this hole we’re in and free us from the heavy hand of the Federal Government. Google it, look into it and learn about it and you will find that nothing out there would have as big an impact to changing the balance of power and bringing businesses back to the US than passing this in to law. What will it take, and act of congress. Not this congress, but one that comes after, after the public has had enough of their rights and lives being stepped on by this liberal, socialist government that thinks it is the answer, when as a great president once stated, “it is the problem!”

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