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When confronted about these numbers, the executives will always claim that the bonuses are paid out of other funds and company earnings. This completely ignores the fact that without the taxpayers’ bailout money, there would be no earnings! If there was anyone left who still felt like the bailout was a good idea (besides the executives who directly benefit), this should be the final nail in the coffin that we were just robbed blindly while the politicians patted themselves on the back.


The election results pretty much confirmed the extent to which Main Street is rightly livid about the Wall Street mentality that led to our financial crisis. During his historic victory speech, President-elect Barack Obama told supporters, and the rest of the world, “If this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers.”

But, it seems that Wall Street didn’t get that memo. It turns out that the nine banks about to be getting a total equity capital injection of $125 billion, courtesy of Phase I of The Bailout Plan, had reserved $108 billion during the first nine months of 2008 in order to pay for compensation and bonuses (PDF).

Paying Wall Street bonuses was not supposed to be part of the plan. At least that’s how Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson explained it to Congress and the American people. So, on Oct. 1, when the Senate, including Obama, approved the $700 billion bailout package, the illusion was that this would magically loosen the credit markets, and with taxpayer-funded relief, banks would first start lending to each other again, and then, to citizens and small businesses. And all would be well.

That didn’t happen. Which is why it’s particularly offensive that the no-strings-attached money is going to line the pockets of Wall Street execs. The country’s top investment bank (which since Sept. 21 calls itself a bank holding company), Goldman Sachs, set aside $11.4 billion during the first nine months of this year — slightly more than the firm’s $10 billion U.S. government gift — to cover bonus payments for its 443 senior partners, who are set to make about $5 million each, and other employees.

Two of those firms, Bear Stearns and Lehman Brothers, went bankrupt this year. Bank of America is acquiring a third, Merrill Lynch. Shares in the remaining two, Morgan Stanley and Goldman Sachs, took a 60 percent nosedive this year.

Yet, that didn’t stop their campaign contribution money from spewing out. Goldman was Obama’s largest corporate campaign contributor, with $874,207. Also in his top 20 were three other recipients of bailout capital: JP Morgan/Chase, Citigroup and Morgan Stanley.

Read the full article here. It’s worth also noting that Goldman Sachs was John McCain’s 4th largest contributor, just behind Merrill Lynch, Citigroup, and Morgan Stanley (source).

I’m ready for some “Change we can believe in”, but I doubt it will come from those in Washington who are bought and paid for.

 

9 Responses to 86% of Bailout Money Used for Executive Bonuses

  1. weizbox says:

    It’s worth also noting that Goldman Sachs was John McCain’s 4th largest contributor, just behind Merrill Lynch, Citigroup, and Morgan Stanley.

    Don’t forget about Obama, who got nearly 4x as much from Goldman Sachs than McCain (874,207 vs 228,695).
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

    Ron Paul 2012? :)

  2. [...] When confronted about these numbers, the executives will always claim that the bonuses are paid out of other funds and company earnings. This completely ignores the fact that without the taxpayers bailout money, there would be no earnings! If there was anyone left who still felt like the bailout was a good idea (besides the executives who directly benefit), this should be the final nail in the coffin that we were just robbed blindly while the politicians patted themselves on the back. [...]

  3. Mahlon Nobles says:

    So, sticks and stones may break their bones, but these words will never do them harm…..Shucks, what’s new?

  4. meneame.net says:

    El 86% del dinero del plan de rescate de Bush recivido por los bancos irá a pagar bonuses a los ejecutivos…

    (c&p) Cuando señalas estos datos a los ejecutivos, siempre dicen que sus bonuses se pagan de otras partidas y de los beneficios. Pero eso esconde que sin el dinero de las ayudas del gobierno no habrían beneficios. Si queda alguien que pensaba que e…

  5. [...]   As if that’s not enough, today you will go to work to pay legal fees for these mortgage execs who covered up the truth about the financial sustainability of their corporations as well as: 86% of Bailout Money Used for Executive Bonuses.   [...]

  6. Jim Perry says:

    Why wouldn’t it be MORE noteworthy that Goldman Sachs was Obama’s 2nd largest donor, with far more given than to McCain? Both candidates took huge sums from all the investment banks, which is all the more reason there should be no bailouts. Talk about a conflict of interest.

  7. sarah palin says:

    Ron Paul is to blame for the financial crisis and bailouts.

  8. jes Jones says:

    Not surprised. Nothing like FREE MONEY at main Street Americas expense. Well done Dictator Bush!

    jess
    http://www.privacy.mx.tc

  9. [...] Currently, the federal government has plans to weatherize only 140,000 homes–a drop in the bucket. President Obama has said he’ll raise that to 1 million. That’s nice, but it’s still nowhere near enough to make a real dent in carbon emissions. Congress has added $250 million to the current budget for weatherization. That’s million with an “m”–not anything like the hundreds of billions taxpayers have poured into the pockets of the banks this year. And those billions ended up not as loans to businesses and consumers, but as dividends and executive bonuses. [...]

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