…the more they stay the same. It’s as if we did a Rip Van Winkle during the past six months, awakening to the Sturm und Drang of the banker’s bonus controversy, listening to the same blather from CNBC about our stalwart bankers’ right to riches as they have paid back their TARP money, the consequences of a capitalist system at work. Six months ago I noted the absurdity of Citibank’s salary increases, their logic being they were “needed” to retain the best talent. Today’s news is record bank bonuses, even surpassing those paid out in 2007 at the top of the market: “top 38 firms on pace to award $145 billion for ’09, up 18%” per the Wall Street Journal.
We’ve become a Corporatocracy – this is not capitalism, which is supposed to reward success, not underwrite failure -- and the bonuses are just another piece of evidence that the Obama administration, while talking up change, has been conned. TARP repayments is a smoke screen, masking the myriad other ways the taxpayer is subsidizing bank profits, be it AIG back door payments, federal government guarantees, or the zero interest rate environment which gives banks access to free money (buy a 6 month CD today and see what YOU get as lender). $145 billion in bonuses while unemployment is well over 10% (if you count people who are no longer part of the labor force as they’ve given up looking for jobs)? One would think banks would grasp the PR downside of the issue, or do they live in their own amoral world?
And as brilliantly noted in a piece in Naked Capitalism, Obama’s “Get Tough on Banks” Again Tries to Play the Public for Fools, Obama’s proposed tax on banks is merely a slap on the wrist, nice political fodder to appease the masses, but it clearly falls short of the reforms that are needed in the industry. Naked Capitalism contrasts Obama’s weak stance to the soaring rhetoric of FDR when he took office: “….the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”
However, all of this pales in importance to the tragedy in Haiti. Here is the site of the American Institute of Philanthropy, a nonprofit charity watchdog and information service, giving their highest rated charities that are active in Haiti.