Bailout Fallout: Goldman Sachs to Pay Record Bonuses, Health Care Reform on The Rocks
posted by: Tracy Viselli 186 days ago
Less than a year ago, Goldman Sachs was in dire shape--so dire in fact that the Bush Administration led lawmakers to believe that Goldman Sachs and the entire financial sector needed the largest bailout in U.S. history. The bail out effort was led by Hank Paulson, former Goldman Sachs CEO, and closely followed by Obama's financial advisers Geithner and Summer. But you wouldn't know that Goldman Sachs was once on the brink of failure today. From the Guardian:
"In Bailout Nation, we discuss the possibility that The TARP was all a giant ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks."
You'll need to read his entire post for the details but its a stunning argument, but it concludes this way:
"The hurry to repay this cheap cash confirms that the fix was in. If this banks were really in the basd shape Paulson suggested, they would hold onto this cheap source of credit. Instead, they want to throw the yoke of government monies off as soon as possible.The desire to return to their old compensation packages for executives cannot be the only factor . . ."
Click here for a stunning visualization of how the financial sector bailout compares to other large government expenditures in U.S. history. This bailout cost us more than all U.S. wars COMBINED.
And how about this for perspective....
The current cost of the financial sector bailout is about $12 trillion. The highest projected cost of health care reform is $4 trillion--1/3 of the money spent over the last year to save Wall Street. And as the Senate continues to shrink away from meaningful reform let alone the public option, it appears that health care reform might turn out to be another disappointment for the middle and working class.Â
Of course, we're not worth bailing out.
In my next post, I'll be detailing what each and everyone one of you can do to make the Senate take health care reform seriously.
"Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.
A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm."
How quickly things change. It seems that for the investment banks who received bailout funds and didn't fail as a result, now stand to reap enormous benefits thanks to the new lack of competition. In fact, Barry Ritholtz, the author of Bailout Nation, has argued that the bailout was a ruse perpetuated by Hank Paulson to save CitiGroup. From Ritholtz's blog post "Was the TARP a Ruse?" (Hat tip FireDogLake):"In Bailout Nation, we discuss the possibility that The TARP was all a giant ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks."
You'll need to read his entire post for the details but its a stunning argument, but it concludes this way:
"The hurry to repay this cheap cash confirms that the fix was in. If this banks were really in the basd shape Paulson suggested, they would hold onto this cheap source of credit. Instead, they want to throw the yoke of government monies off as soon as possible.The desire to return to their old compensation packages for executives cannot be the only factor . . ."
Click here for a stunning visualization of how the financial sector bailout compares to other large government expenditures in U.S. history. This bailout cost us more than all U.S. wars COMBINED.
And how about this for perspective....
The current cost of the financial sector bailout is about $12 trillion. The highest projected cost of health care reform is $4 trillion--1/3 of the money spent over the last year to save Wall Street. And as the Senate continues to shrink away from meaningful reform let alone the public option, it appears that health care reform might turn out to be another disappointment for the middle and working class.Â
Of course, we're not worth bailing out.
In my next post, I'll be detailing what each and everyone one of you can do to make the Senate take health care reform seriously.
Read more: record, tarp, politics, goldman, bonuses, bailout, goldman sachs
comments
War Monger...the name says it All. Of course you love capitalism. Capitalism funds Wars.
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why is this inappropriate?
If we hadn't allowed Bush to deregulated the financial industry, we wouldn't be in this predicament now.
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why is this inappropriate?
We have not had true capitalism since before the Great Depression. After the crash the government continued a slow process of making incremental regulatory advances into the free market under the guidance of progressive ideologies. Slowly the government grew to the monstrosity existing today. Claiming capitalism is to blame for this mess is short-sighted at best and ignorant at worst. This country hasn't seen capitalism as it was intended to be since the late 1800's. Our founding fathers were done in by the philosophies of Immanuel Kant and Georg Hegel that US students of the era brought back from Germany after touring Europe. These philosophies were transferred to our universities and began the growth of the progressive movement in the US. This is the movement that has led us from the prosperity of the 1900's and our economic growth into the downward spiral of decay we are experiencing now. And in regards to comments regarding why socialism is sooo bad (Hawaiian S)? If you read history outside of an academic, progressive controlled environment like those existing in the USA you would get a true portrait of the epic failures and inherent dangers of socialism. Dangers to individual liberty and freedom. What we are experiencing now is a result of 100 years of progressive influence against our wonderful Constitution.
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If they are financially out of control what merits a bonus? If we the people are bailing out "they" the monopolies why are "they" being rewarded. As citizens we have been quiet too long and allowed the "free market" and "capitalist" philosophies to be ruined by large corporate monopolies. We can whine, complain and blog all we want, we are not in control of our government. There are no checks and balances. The very fundamentals of our democracy has been bastardized and we all turned a blind eye while it happened. Did you know China owns 43 billion in US Treasury Bonds? Who is running our country? Not us. It is very scary and it isn't even at its worst yet.
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I read where people are blaming capitalizm for this waste, Wrong. Under true capitalism we would have kept government out of interfering and bail outs. The TARP idea began under a Democratic controlled congress and is still going hog wild with that is yours and mine. Stop th TARP program, hold the money not given out, and freeze all that has not been spent. Who can do this, Obama, you illegal President, but he has no desire to do anything buy but play the big boy, and spend like no man in history of the world.
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I think it was idiotic not to get a signed contract showing where every dime was going befor money was given to all these buinesess.
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The film "Disguised as Paupers" seems appropriate to mention after reading about all of this... if you have a chance try to get a copy.
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I am not from the US of A, but reading this made me SICK!
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Capitalism, as Adam Smith warned against, has become legalized thievery. The "Invisible Hand" is the newest and latest symbol for tyrannical oppression through financial ways and means, as it strangles the many for the benefit of the very few. We live and procreate in order to pay higher taxes and higher prices for products and services. Prosperity and a better future belong to the rich, well-dressed crooks and their ilk. Hope exists only in our strength and willingness to advocate and support true democratic change.
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Tell me again why socialism is sooo bad and capitalism is sooo good?
The American Senior Executive certainly is living it up on American Tax Payers money.
I'm ashamed, and I am not even closely connected. You can be sure that if I know I will NEVER use Goldman for anything, ever.
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