Will the populist tidal wave drown us all?
March 22, 2009
by Amy Siskind
|
There is a fair amount of buzz swirling around the blogosphere about Timothy Geithner. Many do not expect him to last out the next month in his current position as Treasury Secretary. There needs to be a sacrificial lamb and he may well be the one. Folks in Westchester are speculating whether he and his family will be returning to his as of yet unsold home.
But Geithner is not the only scapegoat of our economy’s vicious recession. The loudest roars are for the heads of Wall Street executives. This past Friday, Congress passed a bill that would impose a 90% surtax on Wall Street bonuses granted to ANY employee who earns more than $250,000 at companies that have received at least $5 billion in TARP funding. Mind you this is not just the folks at AIG, there are tens of thousands of employees that count of their bonus to meet their financial obligations. Recall, costs of living can vary widely around our country.
As their groundswell for the heads of anything Wall Street continue, are we missing the point? I wrote this past week about AIG and the royal mess that Larry Summers and the rest of President’s economic staff has let occur on their watch. But the real mess is not the $165 million (millions, not billions) in bonuses that were paid out to AIG Executives. There travesty is that over $30 billion (yes billions) in funds were sent on to both domestic and foreign banks to honor counterparty obligations that allowed these counterparties to avoid a true mark to market.
But beneath the loud chants of “off with their heads”, there is a less publicized story unfolding. The Wall Street folks aren’t traveling so much anymore so hotels around the country are having trouble filling rooms, so employees are being let go. Homes aren’t selling so real estate agents are losing their jobs. People are shopping less and spending less money so folks in the malls are laying off jobs. Slowly but surely, an economic crisis that started off by disproportionately impacting men in the construction and transportation, is now creeping into important fields dominated by women.
To see real life examples of the impact, I need look no further than my own home town. Our revenue from NY State is down as are tax receipts. We had a first crack at a budget last week and teachers in all schools here are going to lose their jobs. Our children will suffer as class sizes increase and services are cut. Let us also remember that women comprise 75% of workers in education fields. This trend is happening all over the country.
It is high time that we become constructive instead of destructive. We have let our government change the subject. Taking all the income of Wall Street executives is not going to get jobs back for our teachers, our realtors, our shop owners. We need leadership and idea folks to take the lead – folks such as FDIC Chairperson Sheila Bair. Or Elizabeth Duke who was the only Federal Reserve Board member to boldly vote against taxpayer funds for GMAC. Time for some of our talented women to take the helm!
Amy – what you describe happening in NY is exactly what is happening in CA – especially the schools. Small business owners will be choked with the new increase in taxes imposed by the state, in both income tax (especially S Corporations) and sales taxes. Our lawmakers are just all to eager to point fingers every which way but themselves as to why we are in this mess and how to get out of it. Our state and federal budgets are a joke – we spend way more than we can ever hope to receive – and it makes no difference. I say we pass a law to tax them at 90% also….
It is clear that Obama wants to displace anger that we should have for the government onto private citizens. This is outrageous. And it saddens me to see people buy into it. But I shouldn’t be surprised. People bought into so much during the election.
And yes, the economy. Thanks for bringing up the local issues that you see. I was very surprised to here you say that teachers are losing jobs…. And I had always thought k-12 jobs were safe. And funny, all that is going into the stimulus yet losing teachers…
Amy, please keep writing about this. This is indeed a woman’s issue. Women could have stopped this from happening and are now going to pay dearly for the mistakes that were and are being made.
Let’s remember also that jobs were lost in order to pay those bonuses. Follow the money—that’s the game that gets played.
Companies lay off staff so they can show their shareholders that they are making efforts to cut costs. But where does some of the money go? Bonuses! How many women were fired so some guy can get paid millions in bonus?
Making the bonus lists public will confirm my suspicions.
I don’t think any firm that lays off staff in this economic downturn (and, never mind, takes govt money) should pay bonuses…
I read recently that CIT Group paid their Head of Human Resources a bonus of $450,000 cash. The reason?
He (yes, a guy) laid off 1400 people! Tough work if you can find it!!
MaryL:
Making the bonus list public will only increase class warfare during this time. Barney Frank knows that AIG employees (and their children) are receiving death threats, but he doesn’t care. He wants the names and he wants the total blame of our financial chaos put on those who walked away with bonuses.
I agree, a 450k bonus is extreme in the scenario. But I also don’t like being manipulated by the government. Perhaps we should fire (and tax 90 percent) government employees who fail at their jobs.
As long as bonuses are being paid with taxpayer money, there will be class warfare. These are public companies who took govt money and all information should be disclosed and made public.
I’d like to see a list of the people who were laid off, too. These people were sacrificed, in part, so they could pay bonuses to a select group.
Anyone who returns their bonus, their name comes off the list…Pay the taxpayer back–and you can pay bonuses again.
Life is full of choices.
My guess is that when bonuses are eliminated, many employees will start complaining that they are “over-worked” and “underpaid” and then, magically, the company will start hiring again…Funny how that works..
“Perhaps we should fire (and tax 90 percent) government employees who fail at their jobs.”
Agreed–but, somehow, we got the government we deserve…
MaryL,
The point is that the bonuses are a drop in the bucket and a huge distraction away from what is truly going on. That the men running our economy are failing miserably. We need leadership not scape goats!
I’m really concerned about the way people’s rage is being directed towards AIG. C’mon, those people’s children are now being threatened. This is not the American way! What really makes me angry is that congress and the Obama administration are pointing fingers at the recipients of those bonuses in order to deflect attention from themselves and the fact that they authorized that money. They’re stoking the fires of outrage without giving any thought to the consequences of their actions. That’s not leadership, it’s sowing the seeds of hatred.
The bonuses ARE a “drop in the bucket,” but how many (women’s, in particular) jobs could have been saved if bonuses were NOT paid? This country desperately needs jobs right now.
The billions in bailout money is GONE—we will never recoup that money, but the bonus money CAN be clawed back and SHOULD be.
I agree, Amy, that the FRATERNITY of leadership is failing but, have we heard ANYTHING from Jarrett/Women’s Council on ANYthing at all? (crickets chirping) So, let’s work on the issue at hand. If the bonuses are made public, we will see the pay inequities (men vs. women) confirmed. Let’s push for that info to be revealed—the names themselves can be redacted—it’s the male vs female info that is helpful.
Death threats?—now THERE’S a distraction!
I still don’t understand why bonuses were paid to start with. In every job I have ever had bonuses were paid relating to profit and exceptional performance. How can a failing company be profitable?
Aflac Insurance has never had a layoff in their entire history. Even though they were profitable last year, their stocks took a hit. The CEO of Aflac refused his bonus because he didn’t think it was fair, since the stockholders had lost. That is called fiscal responsibility.
I am never for violence as a solution in any situation. But to the average American these bonuses were the equivalent of that famous quote, “Let them eat cake!”
Death threats to families (and children)… I say we call the spade a spade and tell our lawmakers to stop this right now. Every female lawmaker should be called on this….
I agree, Carolyn.
And, things are getting worse:
“Tim Geithner has finally revealed his plan to fix the banking system and economy. Paul Krugman, James Galbraith, and others have already trashed it.
Why?
In short, because the plan is yet another massive, ineffective gift to banks and Wall Street. Taxpayers, of course, will take the hit.”
http://www.businessinsider.com.....ons-2009-3
Wow. I can’t believe anyone would call death threats toward children a “distraction”. Also with Carolyn’s “let them eat cake” quote…. We TRULY are summoning the French Revolution, aren’t we????
Quite a good title for your article, Amy.
I think the reports of “death threats” are WAY overblown.
I place them in the same category as those that were supposedly said against Obama by Palin supporters.
MaryL
Why do you think that? That the death threats are overblown? And why are you putting private citizens (and their children) in the same category as people who run for public office?
Also, I might add, the “death threat” by Palin supporters was found to be false. It was a story invented by a journalist and investigated fully by the FBI.
I sincerely hope that rewarding incompetency is not the American way either. It is extreme to imply that because some of us are against rewarding incompetency that we automatically want children to die.
Quite frankly it would have never crossed my mind that a failing company bailed out by the government would have the audacity to pay bonuses.
People who think in terms of violence will always rise to the surface when there is controversy. Every single person I have talked to is outraged, but I have yet to hear anyone say someone should die.
I feel bad if there really are death threats agains the AIG execs’ kids. The execs, not so much. I’m sure the police are taking any threats seriously, and they can afford to hire protection. Angry working stiffs don’t have a lot of access to their gated communities.
The financial mess these guys created is not harmless shenanigans. With the social safety net so badly frayed, job losses and reduced income and benefits among lower income people can KILL. It means no heat, no home, poor food or no critical medicine for many.
Seems to me I’ve heard some meme about working class people stuck in bad mortgages. Oh, yeah. Poor people shouldn’t have taken on the obligation if they couldn’t afford it. Well, maybe these execs shouldn’t have depended on bonuses in making their financial commitments. I’m sure there’s plenty they can cut back on before they’re reduced to eating ramen noodles.
Have we heard of these “death threat” reports from anyone other than Liddy and the media? Where did the (2) letters that Liddy read to Barney Frank come from? Did he give them to the police? Is the FBI investigating?
If Liddy didn’t pass them along to law enforcement than he didn’t think they were credible.
I think the threats are overblown because they were vague (no names were mentioned) and seem to be more hate mail than anything else. Would I take precautions if I were in their shoes? Sure, I would. And I would return the bonus money—if I were really worried…
There is disagreement on this issue to be sure, but I hope all of us here can agree on one thing. With a fair representation of women in governement and corporations, I don’t think any of this would have happened to begin with because we do tend to see the big picture, we do tend to have more compassion for the less fortunate, and we are less defined by our egos. And while women can be extremely competetive, I believe we are less likely to see a win or loss as being the measure of who we are as human beings.
Carolyn – you are spot on!
“The attorney general noted that about 47 percent of $165 million in retention bonuses was awarded to Americans, accounting for nearly $80 million, and he said he expected to get that money back.
Mr. Cuomo acknowledged that some bonus recipients declined to give back bonuses, especially those overseas who are outside the jurisdiction of New York State.”
Only 47 percent went to Americans??
MaryL,
A lot of the risky business conducted by AIG in the derivatives area was done out of London. But let me tell you this – $80 million is peanuts compared to the billions that were sent to foreign banks such as Societe Generale and UBS!
But think how $80 million looks to someone if $25,000 would keep a roof over their head for a few years.
Better yet Carolyn – think about how many rooms $30 billion would put over heads. That’s the amount that AIG gave to counterparties like Goldman Sachs and foreign banks of our taxpayer dollars. If the markets just did their thing, GS and gang would book a loss. We were supporting them!
I don’t get it….. Why the lack of interest in the billions the governent has thrown out the window? Is the government too abstract an image? Is it easier to get angry at evil, greedy corporate executives?
I think it all goes back to what I posted way back. To the average working American the term “bonus” means that due to everyone’s hard work the company was profitable, or a department was profitable. It is a payment for a job well done. It just looks like a reward for incompetence. As for the billions, do you mean government should not have bailed out AIG to begin with?
Just a quick response….
First, I never implied that anyone here wanted children dead! I would never think that about anyone here! I mean, this discussion isn’t THAT heated, is it;)
Also, I have a lot of questions in regard to 1. how this whole mess happened and the government’s involvement and 2. how the TARP money and stimulus money is being doled out and what is happening with it. After working for the government myself, I am someone who does not trust government and in these scenarios there’s a lot going wrong to make me think that the government is not exactly innocent.
Last, I hate corporate greed as much as anyone. But I still think this AIG thing is a witch hunt. Because 1. I think the gov. is trying to distract us and make us hate other Americans instead of the government! 2. In terms of the AIG bonuses…. I live on the “gold coast”, my life is affected by bonuses and as I’ve stated before on this blog, my life is totally NOT glamorous. Really, a lot less glamorous than most people I know. Still, that tiny bonus we received this year (we do not work for AIG!) was really important in helping us pay bills. It did not go to a yacht. I mean, we do not even have a backyard! So the culture of bonuses out here (big corporate execs withstanding…. a lot of people out depend on SOME sort of bonus to help them pay the bills. It is really, really expensive out here…. I don’t think the average American can even comprehend how stressful it is to live on the gold coast. For most of us…. 3. The AIG bonuses were already in contract for many AIG employees. When a bonus is in contract, again, it’s like part of the salary. What is the salary? Is someone who is contracted to do work for a year and has a PHD from MIT, is 100 K a reasonable salary? No. And this is where the bonus comes in.
I’m not saying there is no greed here…. but the AIG story is more complicated than any witch hunt can comprehend.
to Carolyn on 3-23 3 pm
“With a fair representation of women in government and corporations, I don’t think any of this would have happened to begin with because we do tend to see the big picture, we do tend to have more compassion for the less fortunate, and we are less defined by our egos. And while women can be extremely competetive, I believe we are less likely to see a win or loss as being the measure of who we are as human beings.”
may be. let’s hope. however, you can find examples both ways.
I think it is dangerous to bring in, how much better women would be in government and how selfless they would be.
1. Being honored for being altruistic is the trait that keeps us from winning.
2. we need equal rights and equal representation and equal protection, because we are human beings and not inferior.
3. as American citizens we have the same obligations as men and need to be represented equal for being treated equal.
4. fine, if women do better, but there is no requirement for doing the job better.
Ali,
Your response brought clarity in that we all see things through the lens of our personal experience.
My husband works for a commercial bank and for several years now they have been chipping away at his compensation and benefits because, according to them, they could see what has happened in our economy coming. It has been several years since he has received a bonus, nothing but a very tiny raise and all the while more work is piled on until he can hardly take a day off. They are weathering the storm well and have had very few layoffs.
I had never even heard of a bonus being a contractual obligation until the AIG thing. Ours was always solely at the company’s discretion and we never depended on it. It was just langiappe. I think this is the way a large part of the population viewed the bonus issue.
Marille,
My favorite quote is Rollo May, “The definition of insanity is doing the same thing over and over expecting different results.” The only common denominator I see in most of the issues plaguing us is patriarchy.
Some of the poorest, most violent countries in the world are the ones where women have no voice at all. I do not think like a man and I do not act like a man. I believe the best success for all concerned lies in the balance of strength and intelligence both genders bring to the table. When we achieve this balance and we are as bad off, or worse off, I will back down from this statement. I imagine Alice Paul was considered dangerous.
This letter was published in the New York Times, written by an AIG exec who made and is keeping his huge bonus (although he has stated that he is going to give his entire post-tax bonus to charity). Note that his salary is 1 dollar per year outside of his bonus. He is obviously not in the situation that I have described in regard to many on the gold coast, who are kinda just getting by, paying taxes and mortgage after bonus…. but his perspective is interesting nonetheless.
http://www.nytimes.com/2009/03.....wanted=all
Ali,
You and I clearly disagree on this but I am much more sympathetic to those at AIG who were fired in order for bonuses to be paid. And I expect that many women were fired, leaving even fewer women working at the company.
In addition, I have no doubt that most of the bonus payments were made to men, creating more pay inequity.
Maybe Jake’s position can now be filled by a woman?
Carolyn, I am not saying there would not be a difference if women’s representation would be 51%. We just can’t tell yet. And my point is, we need equal rights and equal representation for the sake of equal rights and representation. What the change will be and how long it takes to see the change we will see. Doing the job better backwards and on high heels should not be the requirement.
of course we need not do the same thing over again. but equal representation and rights are a just cause without outcome predictions.
Marille,
We both want equal representation in government. Is it so important to agree on why we want it?
MaryL,
I understand where your sympathies lie, but I don’t quite understand your position.
In the case of Jake, whose negotiated salary is 1 dollar per year meaning all of his income is really in the bonus, are you saying that he should not have received any bonus? Or that he should receive a smaller bonus than he did?
Ali,
I never saw anything anywhere, either from AIG or government that this was simply these people’s paycheck. Don’t you think that would have been relative? I agree there has been a lot of squirrely shenanigans, but it doesn’t even seem like congress would have expected these people to work for $1 per year! And AIG asked for the return of the bonuses! I wonder what else about all this we do not know?
Ali,
I think Jake’s salary is $1 IN ORDER to receive the bonus he initially received.
Yes, I don’t think any “bonuses” should have been paid. A “market” salary is fine.
[...] millions of dollars in bonuses. We wrote how Larry, Timothy Geithner and President Obama had used the political outrage to distract from a bigger issue: our government’s failure to properly police tens of [...]
Leave your Response Want an avatar? Get a gravatar!
Community Room
February 6, 2012 at 4:25 pm
January 30, 2012 at 2:36 pm
January 26, 2012 at 4:38 pm
January 23, 2012 at 1:04 pm
January 15, 2012 at 11:37 am
January 9, 2012 at 6:36 pm
January 7, 2012 at 10:10 pm
January 5, 2012 at 9:31 am
BUILD your NETWORK
Our Network of College Women
Protecting our Teenage Girls
We’re in the Media »
Click to see our latest stories in the media
More Stories »Recent Comments
The Latest from our Blog
Archives
Pioneer Mentors
Blogroll
Find us Online
Subscribe Entries (RSS) | Comments (RSS)
The New Agenda is a 501(c)(4) organization dedicated to improving the lives of women and girls by bringing about systemic change in the media, at the workplace, at school and at home. More...