“In the past 30 years, power elites (including you) drastically increased your share of America’s income by taking income from the middle class and the poor. Did you think we wouldn’t notice?” J Hightower
Lloyd Blankfein is very concerned about income inequality. With his face reflecting both worry and perplexity, he recently called inequality “very destabilizing.”
Blankfein’s concern doesn’t come from the perspective of one experiencing inequality from the bottom of the income ladder — he’s certainly not an Occupy Wall Street sort of guy. In fact, he basically is Wall Street.
Having amassed a personal fortune of nearly half-a-billion bucks during his years at Goldman, he’s literally become a gold man. But in a June 13 CBS interview, Blankfein wrinkled his brow and uttered a very un-Wall Street, populist-like thought: “Too much of the (wealth) of the country has gone to too few people,” he said, adding that when that happens, “you’ll have an unstable society.”As the big banana at the financial gambling house Goldman Sachs, Blankfein raked in a stunning $23 million for his wheeling and dealing last year. Under his leadership, the bank grabbed a $13 billion bailout from us taxpayers in 2008. Continue reading →
Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.
Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:
About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.
Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 million); the company’s shareholders saw their returns decline 9.5 percent.
Have you heard about the earthquake that has shaken Wall Street to its very core? Well, brace yourself, for this really is a shocker: Bonus payments are down.
Yes, the exorbitant bonus checks pocketed each year by the Goldman Sachers, Citigropers and other financial tinkerers have been cut by about 25 percent this year, and — oh! — you should hear the Wall Streeters moaning the hard-times, down-and-out banker blues.
“It’s a disaster,” sobbed one. “The entire construct of compensation has changed.”
Many Americans, of course, will say … “Good! About time!” And it is difficult in these times of middle-class collapse and rising poverty to get teary-eyed over a few financial swells getting a trim. But, come on, Wall Street bankers are human, too (aren’t they?) — so open your hearts to their pain.
A hedge-fund manager, for example, says he’ll now have to strain to pay his $7,500 annual dues to remain a member of the Trump National Golf Club in Westchester. Plus, he worries about food, health care and boarding. Not for him and his family, but for his two dogs — he’s been laying out $17,000 a year for upkeep of his labradoodle and bichon frise, including around $5,000 to hire a dog-walker to take them out each day. He might resort to walking them himself a couple times a week.
The crunch is so bad that one financier confesses that he now shops for discounted salmon for dinner and has had to give up his annual ski trip to Aspen, Colo. And a high-dollar accountant who does financial planning for the wealthy practically weeps for clients who are having to cut back.
Empathizing with the stress of it all, he asks: “Could you imagine what it’s like to say, ‘I got three kids in private school, I have to think about pulling them out?’ How do you do that?” Dabbing his eyes with tissues, he adds that these people have been raking in around $500,000 a year, and they never dreamed “that they’d be broke.”
by Greg Palast (In These Times) | Greg Palast November 6, 2011
Here’s what we’re told:
Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.
I don’t buy it. I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”
I’ll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children’s ears when I say this––a bank named Goldman Sachs is holding the smoking gun.
In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.
Goldman took a huge loss on the trade.
Is Goldman that stupid?
Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?
Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman’s fake loss was the Greek government’s fake gain.
Goldman would get repayment of its “loss” from the government at loan-shark rates.
The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.
Cool. Fraudulent but cool.
But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.
When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out. Investors’ went berserk, demanding monster interest rates to lend more money to roll over this debt.
Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance? Goldman.
And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds?
That’s Goldman’s specialty. In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up another half a billion dollars on their “net short” scam.
But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to — get ready for this––$14,000 per family per year.
Euro-nation, the secret Geithner memo, and the Ecuador connection
Why did the Greek government throw its nation’s fate into Goldman’s greasy hands? What the heck was in the “RESTRICTED” document? And why did I have to take it to Geneva, to throw it down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn’t bother to spit on, and then tear off to Quito to share it with the grateful President of Ecuador?
OPINION | I was at an event on the Upper East Side last Friday night when I got to talking with a salesman in the media business. The subject turned to Zucotti Park and Occupy Wall Street, and he was chuckling about something he’d heard on the news.
“I hear [Occupy Wall Street] has a CFO” he said. “I think that’s funny.”
“Okay, I’ll bite,” I said. “Why is that funny?”
“Well, I heard they’re trying to decide what bank to put their money in,” he said, munching on hors d’oeuvres. “It’s just kind of ironic.”
Oh, Christ, I thought. He’s saying the protesters are hypocrites because they’re using banks. I sighed.
“Listen,” I said, “where else are you going to put three hundred thousand dollars? A shopping bag?”
“Well,” he said, “it’s just, they’re protests are all about … You know …”
“Dude,” I said. “These people aren’t protesting money. They’re not protesting banking. They’re protesting corruption on Wall Street.”
“Whatever,” he said, shrugging.
These nutty criticisms of the protests are spreading like cancer. Earlier that same day, I’d taped a TV segment on CNN with Will Cain from the National Review, and we got into an argument on the air. Cain and I agreed about a lot of the problems on Wall Street, but when it came to the protesters, we disagreed on one big thing.
Cain said he believed that the protesters are driven by envy of the rich.
“I find the one thing [the protesters] have in common revolves around the human emotions of envy and entitlement,” he said. “What you have is more than what I have, and I’m not happy with my situation.”
Cain seems like a nice enough guy, but I nearly blew my stack when I heard this. When you take into consideration all the theft and fraud and market manipulation and other evil shit Wall Street bankers have been guilty of in the last ten-fifteen years, you have to have balls like church bells to trot out a propaganda line that says the protesters are just jealous of their hard-earned money.
Think about it: there have always been rich and poor people in America, so if this is about jealousy, why the protests now? The idea that masses of people suddenly discovered a deep-seated animus/envy toward the rich – after keeping it strategically hidden for decades – is crazy.
Where was all that class hatred in the Reagan years, when openly dumping on the poor became fashionable? Where was it in the last two decades, when unions disappeared and CEO pay relative to median incomes started to triple and quadruple?
The answer is, it was never there. If anything, just the opposite has been true. Americans for the most part love the rich, even the obnoxious rich. And in recent years, the harder things got, the more we’ve obsessed over the wealth dream. As unemployment skyrocketed, people tuned in in droves to gawk at Evrémonde-heiresses like Paris Hilton, or watch bullies like Donald Trump fire people on TV.
Moreover, the worse the economy got, the more being a millionaire or a billionaire somehow became a qualification for high office, as people flocked to voting booths to support politicians with names like Bloomberg and Rockefeller and Corzine, names that to voters symbolized success and expertise at a time when few people seemed to have answers. At last count, there were 245 millionaires in congress, including 66 in the Senate.
And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that’s just the problem. These guys on Wall Street are not winning – they’re cheating. And as much as we love the self-made success story, we hate the cheater that much more.
In this country, we cheer for people who hit their own home runs – not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.
That’s why it’s so obnoxious when people say the protesters are just sore losers who are jealous of these smart guys in suits who beat them at the game of life. This isn’t disappointment at having lost. It’s anger because those other guys didn’t really win. And people now want the score overturned.
All weekend I was thinking about this “jealousy” question, and I just kept coming back to all the different ways the game is rigged. People aren’t jealous and they don’t want privileges. They just want a level playing field, and they want Wall Street to give up its cheat codes, things like:
FREE MONEY. Ordinary people have to borrow their money at market rates. Lloyd Blankfein and Jamie Dimon get billions of dollars for free, from the Federal Reserve. They borrow at zero and lend the same money back to the government at two or three percent, a valuable public service otherwise known as “standing in the middle and taking a gigantic cut when the government decides to lend money to itself.”
Or the banks borrow billions at zero and lend mortgages to us at four percent, or credit cards at twenty or twenty-five percent. This is essentially an official government license to be rich, handed out at the expense of prudent ordinary citizens, who now no longer receive much interest on their CDs or other saved income. It is virtually impossible to not make money in banking when you have unlimited access to free money, especially when the government keeps buying its own cash back from you at market rates.
Your average chimpanzee couldn’t fuck up that business plan, which makes it all the more incredible that most of the too-big-to-fail banks are nonetheless still functionally insolvent, and dependent upon bailouts and phony accounting to stay above water. Where do the protesters go to sign up for their interest-free billion-dollar loans?