As millions of American families face the future with tears in their eyes and dread in their hearts, a privileged class will enjoy a very merry Christmas. Like the Cossacks, the Vikings and the Reivers of old, these latter-day raiders seem to pillage at will without fear of reprisal. But nowadays the pillaging is legal.
For the life of me, I cannot figure out why these folks are so privileged. Is it just that they know the right people? That they have “connections” in high places? Or is there a hidden quid-pro-quo that rewards politicians for allowing raiders access to the public coffers?
Congress has not been able to find out what happened to the first half of that seven hundred billion dollars Treasury Secretary Hank Paulson demanded in order to “save the financial system.” But the Associated Press has dug up some facts and figures that may shed some light on the matter.
According to the AP analysis, nearly 600 executives of the banks that benefited from the “bailout” shared about $1.6 billion in salaries, bonuses and other benefits despite their institutions’ pathetic performance. Here are a few examples:
John A. Thain (photo at right), chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings for the year. Thain could have raked in even more but withdrew a demand for a $5-to-$10 million bonus following a public outcry. Merrill Lynch got $10 billion from the bailout.
Lloyd Blankfein (photo far right, above), president and chief executive officer of Goldman Sachs, took home nearly $54 million in annual compensation. The company’s top five executives received a total of $242 million. Goldman Sachs also pocketed $10 billion of the bailout money.
Banks that got bailout funds also paid millions for such extras as home security systems, private chauffeured cars and club dues, AP reported
Goldman Sachs’ tab for leased cars and drivers ran as high as $233,000 per executive.
JPMorgan Chase chairman James Dimon (photo below, right) spent $211,182 on private jet travel because his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.
At Bank of New York Mellon Corp., chief executive Robert P. Kelly’s allowance for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly (photo at far left) also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan.
Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.
The bailout was intended to flood financial institutions with money so they could lend it to you and me. But credit remains frozen. And despite the Fed’s drastic interest rate cut – to nearly zero per cent – lending has not taken off. Indeed, some credit card companies have raised interest rates.
It seems that the only effect the bailout has had so far is to enrich the people who ran the financial system aground. Of course we do not know who else might have filled their pockets. Congress is still waiting to find out.