Wall Street Bonuses Should be Used to Invest in Small Business and Re-Employ the Sacked Workers

The financial wizards of Wall Street and the “to big to fail” bankers are about to reward themselves with money created mainly from taxpayers bailouts. It is unbelievable that this is simply accepted. I hear on Fox and other channels the rationalisation that those corporations that have paid the government back the tax payer money should be allowed to pay bonuses again.

This is not right and is highly immoral.

It is a known fact that wealth creation and destruction moves in waves. When the great financial crisis began the focus was on the “too big to fail” institutions and they were rescued by Paulson and Bernanke using tax payers money.

As wealth destruction moved through to the”real” economy unemployment was the result. Private business suffered enormously because of what the financial industry did. So did their ex- employees.

Paying bonuses now just because they have paid back money to the government does not even begin to address the real wealth destruction. Once again this is the short term response when the long term issue is what matters. They need to be held accountable for what they did and be made to put it right. This could take years.

But if they were put under the gun to perform and be accountable we may find there are some great minds amongst them 😉 and they might actually get the economy moving again far more quickly than government stimulus packages. Instead they are using money they have begged, borrowed or stolen to bet on the stock market and have deposited the rest with the FED to get paid interest – all as far as I am concerned at the world’s expense.

It should be the responsibility of the financial industry to provide unemployment benefits to the people who lost their jobs due to their negligence. The bonuses should be used for this task. All bonus money should be paid into a fund charged with the responsibility of getting all those who lost their jobs as a result of Wall Street’s stupidity, back to work and to compensate them for lost income.

If these financial wizards are such great creators of wealth then it should be a “no-brainer” for them to invest in the small businesses they wrecked and help ensure those business grow and survive and take back their employees.

There should be no bonuses until they have righted the wrongs they have committed. The only measure is unemployment. When the unemployment percentage is back to what it was BEFORE the financial crises then they can go back to their bonuses.

But those bonuses should never again be determined by anyone except the shareholders, the rightful owners of a company.

A law should be passed that if any financial person who was employed in activities that caused the financial crises leaves the US to take a higher paying job in the same industry overseas, they will be taxed as if they are working in the US, but at a rate enough to deter them from such low-life practice. In fact if they don’t stay and rebuild the financial industry it is almost an act of treason. If they try to “sneak out” then they should lose their citizenship and/or never be allowed back into the US. There has to be a cost to them for what they did. (This should apply to all nations too)

Some will say this is unfair. I say what about all the unemployed? Is it fair they lost their job when they might have been a thousand miles from Wall Street just doing their job? They were looking after their families, paying their taxes and being good citizens. If anyone in the financial industry where high risk business was being conducted says they were not responsible, I’d say they are liars. If they did not “feel” what was being done by themselves or others was not right then they have a serious ethics problem and should be barred from the financial industry for life.

The shareholders – YOU should have a vote on how much the bonuses should be. That does not mean the fund managers who hold your retirement money and have invested it in a corporation. It means you. The technology is there to make this very easy to do. You are disenfranchised as a share holder if your fund manager votes on your behalf and often doesn’t even notify you they have done so. This is criminal.

The management will tell you, you are not qualified to determine the salary and bonus of the managers of your own company. Yet you are qualified to lose your money when the management destroys the company through high risk financial dealings. When was this allowed to happen? Have the management done such a good job of protecting your company? The answer is a resounding NO!

If you were a share holder in many of Wall Street’ failed banks you LOST your money. The government were very quick to say the shareholders would NOT be bailed out. As if they were the culprits and as such the evil capitalist owners and should lose their money. Don’t you know that is YOU, you are the evil capitalist? You were probably a shareholder through your retirement funds. Why did you not march in the streets and demand a bailout of your shares as the owner of the company?

Share holders are the legal owners and have been disenfranchised from controlling their own company where the managers hold sway and appoint “independent arbiters” to determine their compensation packages. You have no rights but take all the risks.

Bonuses for the financial industry are perverse.

The financial industry is not like a manufacturing company. For instance a commercial bank has the right to create wealth out of thin air using the fractional reserve banking system and should not be rewarded for leveraging your bank deposits up to 10 times their value and receiving a bonus for each loan they make.

If I could build a car and then somehow create nine more out of thin air then I too could garner enormous unearned bonuses.

There is nothing right about being employed as a financial trader and then being given the latest technology at shareholder expense to then, with a few keyboard entries, loan out billions of dollars, or sell billions in collateralized debt and three months later get a fat bonus for being a glorified typist.

Now some will tell you these people are worth every penny but in the scheme of things very, very few have what it takes to create real wealth. Most just catch the momentum of financial leverage and take risks they would never take with their own money.

As a Baby Boomer you need to realise that nothing has changed. Even if Bernanke regulates it will be a regulatory sieve. There is a revolving door between Wall Street and the Governments. They won’t want that destroyed. It’s the FED that has to go and Banks should be allowed for real change.

Also how do you expect a finite number of tax payer funded regulators on government wages to police the Wall Street wizards being paid $500,000 to $10Mn just in bonuses this year even after all the wealth destruction they caused? These wizards are paid to find ways around regulations. Many will have worked for the government to establish the regulations and then will be poached by Wall Street to work around the very regulations they created.

Leave a Reply

CommentLuv badge