More on the Bonuses

Alan Feuer and Karen Zraick write in the New York Times that Wall Street isn’t apologizing for outlandish bonuses.

“People come here because they want to work hard and get paid a lot for working hard,” one investment banker said Friday as he wended his way, lunch bag in hand, through the World Financial Center. “I think there’s a disconnect between Wall Street and Main Street.” …

… “My bonus is ‘shameful’ — but I worked hard to get it,” said John Konstantinidis, a wholesale insurance broker, lunching Friday at Harry’s at Hanover Square.

The idea seems to be that because they work very, very hard, they deserve enormous amounts of money. The thing is, normally the economy doesn’t reward a person based on how hard he works. It rewards people for producing something that has value to other people. The fact is that America is full of people who work very, very hard and who are not paid well at all for it.

I can understand a financial industry executive receiving a bonus for bringing more money into the company than the other executives. But these guys seem to think they are entitled to bonuses for breathing. They argue that if they don’t make so much money, New York doesn’t collect as much in income taxes. However, as James Ledbetter points out in Slate, “Paying pedophiles billions of dollars in bonuses would also have ancillary economic benefits—that doesn’t make it a good idea.”

Dan Gross, also in Slate, says,

The rationalization is that the bonus is the salary. The paycheck they get every week, which might add up to $150,000, is nothing. Without the bonus, [they get] no private school tuition, no mortgage, no nothing. Not getting a bonus is like getting fired. It’s as if you’ve worked all year for nothing.

Well, some people do work all year for nothing, or at least a whole lot less than $150,000.

Another argument is that companies have to reward their people generously or they will move to other firms. And what firms will they move to, pray tell? Bear Stearns? Lehman Brothers? Oh, wait …

The idea seems to be that people who do the money handling should be insulated from the nation’s financial problems. I think the opposite is true — people who do the money handling should be the first ones to take a hit when money is mishandled. I argue that it is this very sense of living in their own universe that lured so many of these people into such bad decisions.

12 thoughts on “More on the Bonuses

  1. It’s so interesting watching the worldview of the clueless, money-obsessed banksta (I love that term) Republicans being turned inside-out at this point in history. A few years ago, everyone in the country was cheering them on, grooving on the filthy rich CEO mentality, lapping up the right wing everyone-can-get-rich-if-they-only-try BS as the stock market climbed ever higher into nose-bleed territory. Now that the bubble has popped, the whole social mood has shifted, and these bankstas are finally exposed for the grasping ninnies they always were. Same for the hard right GOP holdouts in Congress who are still smugly urging Obama to get with their program. These fools haven’t realized that train left the station months ago. They’re still partying like it’s 2001.

    I recently saw an extremely worthwhile video about Cuba – how it survived its own version of Peak Oil when the USSR collapsed and cut subsidies to Castro’s regime. It took about 5 years for the country to transition away from petro-agriculture to small organic farms. The average Cuban lost 20 pounds of weight during the first year. Now, farmers are now one of the highest paid professions in Cuba, because they produce something that everybody needs.

    One of the lessons from the Cuba experience is that mindset is everything. It was relatively easy to convince Cubans to make certain changes in their lives to get past their own oil shock. I suspect it will be orders of magnitude more difficult in this country, even when oil (eventually) becomes expensive. As GHW Bush once said, “The American way of life is non-negotiable” – a statement from the mentally rigid, dinosaur side of our country if there ever was one. On the other hand, Americans are adaptable, and can learn, if we can get the dross of right wing stupidity out of the way.

    There’s such a thing as working hard versus working smart. The bankstas might’ve been working hard and maybe smart back when paper profits meant something, but those days are over. One of the best things Obama could do to get people to begin thinking constructively about the future is to normalize relations with Cuba. More Americans need to see what they did in the face of Peak Oil.

    And I’d extend that to normalizing our view of the whole of Latin America. Politically the whole region has been moving leftward – from well knowns such as Castro and Chavez, to Lulu in Brazil, and Bolivia, where someone from the indigenous peoples there now leads the country. Our media demonizes this region, but they have much to teach us, in the wake of ruinous neoconservative policies.

    Our country has paid a huge price in opportunity costs over the last couple decades of conservative rule, particularly during the last eight years. Problems like global warming and peak oil, which would’ve been much easier to solve when times were good, have gotten worse due to denial and neglect, and will be extremely difficult and painful to deal with now that times are bad. This is what happens when a country is ruled by people who are delusional, reactive, and backwards looking.

  2. “My bonus is ‘shameful’ — but I worked hard to get it,” said John Konstantinidis, a wholesale insurance broker.

    Dude, tell some single mom of three who works an 8-hour shift on her feet as a supermarket checker, just how freaking hard you’ve been “working.” That is, if you can catch up to her at her second job delivering PennySavers, or while she’s taxiing her kids, or buying groceries, or doing housework and yardwork.

    To borrow a phrase from commenter Tom at a post from yesterday, what a mothercheneying icehole. (And why am I not surprised that Rudy Giuliani is in the iceholes’ corner?)

  3. I think there’s a disconnect between Wall Street and Main Street.

    What incredible hubris, using that phrase in support of outlandish bonuses. It is, at least, a true statement. I guess that counts for something.

  4. “I deserve a bonus, I worked hard to get it”. Hmm…what does that remind me of? Oh, yeah, the undergrad who believes that because they “worked hard” they deserve an A – despite the fact that they submitted D-quality work.

  5. Rudy is a lascivious money grubbing icehole. He’s like puke city. But ya gotta hand it to him..Him and his buddy Bernie of little substance cornered the market on Homeland Security stun gun purchases.

  6. There’s always a disconnect between Wall Street and Main Street. And despite my pcifist ideals, I gotta admit I love it when Main Street gets riled and slaps Wall Street silly, then gives its worst narcissists wedgies.

  7. As I recall, France ran into a disconnect between Wall Street & Main Street (or its Parisian equivalents), and they answered by storming the Bastille. While I don’t expect Madame Guillotine to be set up on New York street corners, a few cartoons showing appropriate heads on the sidewalk and blood running down the gutter might get the point across. Or not.

    Prior to setting up the cure to excessive height (which also cures arrogance), Congress might pass legislation with TEETH, that sharply curtails all executive compensation, and mandates fresh management at the top when taxpayer funds are requested (or the government has to take over a failed institution).

  8. “I deserve a bonus, I worked hard to get it.” Ian, that statement does remind me of someone. It was George W. Bush during the 2004 Presidential campaign, how many times did we hear, “this is a hard job and I’m working hard.” At least a dozen. Anytime he had to respond to something negative (i.e. everything) he would just say, well, I’m working hard.

    To Moonbat, peak oil is real and its beginning to happen in America. We need to all read “The Long Emergency” by James Howard Kunstler to learn more about this important subject. I hadn’t ever read about Cuba’s response to peak oil, thank you for the information.

  9. I’ve read that the real ‘skinny’ behind those obscene bonuses/perks/pay is that the people who benefit from (and award them) are on a sort of conveyor belt running between the big firms. In other words, it’s a I’ll-scratch-your-back-if-you-scratch-mine setup – or – one day a benefittee and the next day a benefitter.

    I’m really more concerned, however, with the widening gap between the cost of living and average pay. For example, as a movie-going kid in the ’30’s a ticket cost me 10 cents. Today it costs me 10 bucks. All things being equal, average hourly wage today should be 100 bucks. How’s that for a gap.

  10. Yes, yes, I’m sure the Big Money Men worked hard, but your average panhandler on the street could have achieved the same end result–and for considerably less money.

  11. Yeah, the people who cause the financial messes should definitely be the first hit. The idea of merit pay is seen as foreign or dangerous by most of Wall Street.

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