Thursday, January 29, 2009

The Rich Get Richer and the Poor Get ????

Todays IHT had this piece on Wall Street. Seems the geniuses in the financial industry managed to rake in the sixth highest level of total bonus dollars in history. Not bad for a gaggle of boys who posted record losses, bankrupted many, and helped push the world into a near depression.

Granted, 2008's $18.4 billion in bonuses is down 44% from 2007. The average bonus for 2008 was only $112,000, or only 3 times the average US worker's annual wages. Three times the average worker's wages for losing other peoples' money. Or, in another perspective, it's three times the annual budget for the city of Chicago! And that's just the bonuses, not base salaries, stock options and benefits.

The firms argue that it's necessary to pay this to retain "bright, hard working employees". If they were so bright, why did they set their investors up for calamity? Perhaps they really need employees who don't work so hard, and the losses could be less?

And, many of these firms were on the taxpayer dole with bailout/TARP money. Why did I (or more accurately, my grandkids) get stuck with part of financing rewards for people who couldn't turn a profit?

WASF

Al

1 comment:

sheerahkahn said...

What I found interesting is that some guy the people on NPR doing Planet Money said that it's better to work for the bank than to be an investor in a bank.
Apparently the worker gets more money than the investor could ever hope to get.