Archive: News

President Obama, backed by financial analysts, Congress, and his own cabinet, declared that many of sectors of our economy were “too big to fail.”  So the Great American Giveaway (GAG) was set in place earlier this year.  Essentially, we were told that our tax dollars would rescue the ailing auto industry, the financial industry and the banking industry.  Anything short of a bailout would result in a global economic collapse and complete chaos.

With grimaces and some arm twisting, we went along with the plan hoping for the best. Americans from all walks of life have had to sacrifice much and endure daily uncertainty during the economic crisis.

Signs of recovery are emerging in some sectors of the economy.  As a nation, we are beginning to regain confidence with such prominent indicators as the Dow climbing above the 10,000 mark for the first time in over a year.  And just when you thought those responsible for this economic mess had experienced a real change in the way of doing business, we are shocked back into reality.   They, along with the corporate boards of the financial institutions which took funds from the bailout program, are preparing billion dollar bonus packages for the top executives.

When used properly, bonuses are indeed a well deserved reward.  Once upon a time, a bonus was awarded to an individual in the financial sector for his or her performance in long term financial stability and growth not some short term gain based on risky investments, instability, and negative growth.

The public outcry over these bonuses has not gone unnoticed.  Some institutions, mindful of the popular resentment over the government’s $700 billion bailout of banks and other financial companies, have eliminated certain perks.  And a few executives have voluntarily given up benefits that lawmakers have criticized as excessive.

For example, senior executives at Bank of America will no longer use corporate jets for personal travel.  We the people bailed out this institution with a $45 billion loan.  How can these multi-millionaires, who caused the financial crisis in the first place, think for one minute that we, the tax payers, will view this and similar acts of self sacrifice as nothing more than mere window dressing?

The real story exposes a more sinister side to the buildup of bonuses.  One study reported that chief executives at 29 of the largest financial companies that have taken bailout funds received, on average, perks and benefits worth more than $380,000.  The study also discovered that half of the banks participating in the bailout increased their fringe benefits to top executives.

These executives are already well compensated.  The notion that these folks need more incentives and bonuses to keep highly qualified individuals is clearly a smoke screen.  In many instances it was these same top executives who charted a course for financial ruin based on an insatiable appetite of greed without any concern for the welfare of our nation and its citizens. With unemployment at 9.8 percent and projected to go higher, our nation will continue to face economic uncertainly for months to come. Labor Department statistics show that there are about six unemployed people for every available job.

Wages are at a 19 year low.  States like Michigan, Nevada, and Florida have unemployment rates above 15%.  The very least that top executives can do is to place their bonuses into a fund that will create new jobs, offer education and retraining opportunities for those in industries hit hardest by the crisis, and rebuild confidence in our economic system.  And that is to the point.

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