A big huzzah! to the Brits for placing a 50% tax on 2009 bonuses of more than $40,800 paid to bankers. Finally, somebody is landing on these guys that screwed up the world’s economy but continue to award themselves with huge paydays.
” The levy represents the most direct attack on bank bonuses anywhere in the world. All banks in Britain – including the London-based subsidiaries of foreign banks — will be affected, whether they took government funds or not.” -NY Times
In the U.S. meanwhile, Treasury Secretary Timothy Geithner has announced an extension of the 700-billion dollar “TARP” bailout to October of 2010. “History suggests that exiting prematurely from policies designed to contain a financial crisis can significantly prolong an economic downturn. The government expects up to $175 billion in repayments from rescued companies by the end of next year,” Geithner says.
Gee, that’s great Tim, they’re paying back $175 billion on the $700 billion in TARP money that was handed to them because they’re too big to fail. To be fair, the guys at the Treasury Department think they’ll eventually be able to recover all but $42 billion of the $370 billion they gave to Wall Street. So we’ll only be out a measly $42 billion. What the hell is that? Next to nothing, right? And is that projection based upon reality or is it just something they’re hoping for, while the boys at the top continue washing down their Beluga with the finest champagne?
According to a piece in the NY Times, big government can do just so much when it comes to pulling in the reigns on all the money the financial wizards are awarding themselves in spite of their monumental failures.
“And the American International Group is contractually obliged to make bonus payments of nearly $200 million in March 2010. The company has promised to try to reduce that amount by 30 percent. But once again, there is nothing Mr. Feinberg can do because those bonuses were already written into contracts — and there is a high likelihood that the bonuses will create another furor in Congress, just as they did earlier this year.” -NY Times
Oh really? Why not follow suit with the British, and impose that same 50% tax here in the United States? Now that would have some real meaning. It would definitely prove to all those regular work-a-day American taxpayers that the Obama Administration is taking their side in this as opposed to simply funneling more money to the greed-driven fatcats on Wall Street with their history of treating hard earned tax dollars like monopoly money and then paying themselves off when they fail.
Of course it probably wouldn’t work here in the U.S., because all of this falls under the category of economic theory which is something most of us regular non-economist folk will never be able to understand. Or at least that’s what the high rollers want you to believe. It makes it so much easier for them to continue getting away with economic murder. Looked at the interest rates on your credit cards lately?