The Cuomo Report-Big bank execs make out like bandits

by: Tom B

Fri Jul 31, 2009 at 22:13:16 PM CDT

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I just finished downloading the file PDF File HERE: and haven't gotten that far into it yet but a quick look at the first page says all I need to know that this may bring on the big one as far as I'm concerned.

According to the report, three of the largest banks "earned" 9.6 billion bucks between them.  They also took 45 billion in TARP funds.  In a sane world there would have been no executive bonuses for any company that had to beg for taxpayer money to make up for what we're supposed to think was the rampaging stupidity of it's upper level execs.

But this ain't a sane world and those execs received as bonuses... 18 billion smackeroos.  That's god damned near twice their combined earnings for the period covered.  Once again slowly... the executives and upper level managers of these banks received bonuses of nearly twice the amount their companies earned.

How in the HELL does any bunch of people manage to "earn" a bonus twice the earnings of their companies?  That's simple.  They don't earn it.  That doesn't stop them from feeling that they're entitled to it however, and as long as they feel they're entitled, they'll just take it.

As one would expect, in describing their compensation programs, most banks emphasize the importance of tying pay to performance. Indeed, one senior bank executive noted recently that individual compensation should not be set without taking into strong consideration the performance of the business unit and the overall firm. As this executive put it, "employees should share in the upside when overall performance is strong and they should all share in the downside when overall performance is weak."

Imagine that... an honest bank exec.  Somebody needs to catch that sucker and put him into an exhibit of animals thought to be extinct at the damned Smithsonian or something.  Of course there's a huge gap between what they SHOULD do and what they actually do on a day to day basis.  Never has that gap been so great as it is today.

But despite such claims, one thing is clear from this investigation to date: there is no clear rhyme or reason to the way banks compensate and reward their employees. In many ways, the past three years have provided a virtual laboratory in which to test the hypothesis that compensation in the financial industry was performance-based.

Bullshit.  There is no hypothesis amongst the commoners that compensation in the finance industry is performance based.  The only ones that seem to think there's the remotest possibility of it are the analpundits in the financial media and the right wing talking heads.

But even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance. Thus, when the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.

But that's not the worst of it as far as I'm concerned.  Some of these corporate welfare queens didn't earn anything or even lost big bucks and their honchos STILL got the big payday as if they'd done something to earn it.  

An analysis of the 2008 bonuses and earnings at the original nine TARP recipients illustrates the point. Two firms, Citigroup and Merrill Lynch suffered massive losses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion in bonuses and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TA~ bailouts totaling $55 billion.

This has nothing to do with performance.  This has nothing to do with earning your pay.  This is about entitlement gone totally out of control.  These sleazy con artists have simply come to feel that they are entitled to the huge bucks whether they do a fricking thing or not.

As I said, that's all from the first page of the thing.  There are twenty more that I'm almost afraid to look at.  What you're looking at today is the ultimate culmination of what Bush Senior accurately called "Voodoo Economics" and everyone else just called "Reaganomics".

I seriously doubt that Reagan himself ever expected that total deregulation and free market forces would provide a workable system and I question the notion that the system was ever designed to be workable.  I believe it nothing more than the greatest heist in history designed only to move the greatest amount of money out of the US economy and into the offshore pockets of the one percenters in the shortest possible time, trying to stay one step ahead of the public while doing so.