Must be nice to be in the high-fidelity first class traveling set:
Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street’s pay culture.
Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal.
Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year’s $117 billion — and to top 2007’s $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels.
It is kind of funny how acrimonious our current politics is, with everyone yelling and screaming at each other over little shit, when the truth of the matter is politicians don’t run the country at all.
David
That sounds sort of shrill.
Zifnab
Thank god we’ve got those Bush Tax Cuts (not to mention those Reagen Tax Cuts). Imagine if all these hundreds of billions of dollars were being taxed at an astronomical 36% rate.
What would our yawning deficit look like then?
Irrelevant,YetPoignant
Why isn’t everyone angry?
Why aren’t we rioting in the streets?
BloodRush
I don’t see why we should be outraged over something we’ve known all along, that the banking industry is and has always been above the law and above the government. We can scream and yell that they took our money, so they can gamble a bit in the sub-prime loan fiasco, and yet they are back to their old tricks, without ever contemplating the wreckage they left behind. I’m not even sure that if Barney Frank is able to get decent baking regulation through it would even make a difference with these guys, they’ll just find a different way to get around it.
MNPundit
@Irrelevant,YetPoignant: Obama hurls himself in front of pitchforks and we are reluctant to riot against him yet.
Also, I would be okay with corporate overlords if they weren’t a pack of short sighted idiots. How much brain power does it take to realize you need a sustainable consumer base (and thus universal health care and good wages etc.) and a planet continuing to function properly (avoid nukes, fix climate collapse etc.) to be able to make money hand over first forever?
But then I’m authoritarian–I remain convinced if I could order the world by fiat it would be fixed in 6 months.
EdTheRed
Les Grossman: The universe… is talking to us right now. You just gotta listen.
[turns on Flo Rider’s “Low” and begins to dance to the beat]
Les Grossman: See, this is the good part, Pecker. This is when the job gets fun! Ask… and you shall receive!
Rob Slolom: [dancing along] Right…
Les Grossman: You play ball… we play ball. I knoowwww… you want the goodies!
Rob Slolom: Welcome to the goodie room!
Les Grossman: You paying attention? I’m talking… G5, Pecker! That’s how you can roll. No more frequent flyer bitch miles for my boy! Oh yeah! Playa… playa! Big dick playa!
Rob Slolom: Swinging past ya knees!
Les Grossman: Big dick, baby!
Rob Slolom: Yep.
Les Grossman: [turns off the music] Or… you can grow a conscience in the next five minutes and see where that takes you.
Rick Peck: Now let me get this straight. You want me to let my client of 15 years, one of my best friends, die in the jungle alone, for some money and a G5?
Les Grossman: Yes.
Rick Peck: [pause] A G5 airplane?
Les Grossman: Yes… and lots of money… playaaaa!
[turns on the music and dances again]
Punchy
That average is a nothingburger. The CEO’s are making 8 or 9 figs and skewing it. What’s the median and mode salaries?
PeakVT
Bring back the Eisenhower-era tax rates.
MNPundit
http://www.instantrimshot.com/
That button might be helpful.
David
@Punchy: The news stated yesterday that a chef or waiter working there got a $7k bonus.
Not a nothingburger for him and a lot more for everyone else.
El Cid
Remember, to systematically analyze the role of upper class individuals and institutions in influencing and/or controlling our political system is “leftist” and fringe and extreme. Sure, some alien extraterrestrial visiting sociologists might think it a bluntly obvious thing to study, but then, they’re probably communist fag Europe lovers who drink fancy coffees.
Waynski
@EdtheRed — Nice Tropic Thunder reference. You m-m-m-m- make me happy Simple Jack.
Montysano (All Hail Marx & Lennon)
@Irrelevant,YetPoignant:
As soon as “Oww, My Balls!1” is over, I’m gonna chug some Brawndo and take to the streets.
The Moar You Know
Truth.
Tear down the Statue of Liberty, replace it with one of Gordon Gekko and engrave this at the bottom in letters tall enough to be visible for 10 miles.
liberal
@BloodRush:
While BF is a liberal Democrat, AFAICT he’s also pretty much a tool of the banking industry.
CynDee
We should all be screaming at the misuse of the word “earn” and also be screaming at the administration for not investigating and regulate these blatant skimmings of the national treasure. They need to be taxed like those of us else who really EARN our money.
El Cid
Questions and Answers
Q: So, who does rule America?
A: The owners and managers of large income-producing properties; i.e., corporations, banks, and agri-businesses. But they have plenty of help from the managers and experts they hire. You can read the essential details of the argument in this summary of Who Rules America?, or look for the book itself at Amazon.com.
Q: Do the same people rule at the local level that rule at the federal level?
A: No, not quite. The local level is dominated by the land owners and businesses related to real estate that come together as growth coalitions, making cities into growth machines.
Q: Do they rule secretly from behind the scenes, as a conspiracy?
A: No, conspiracy theories are wrong, though it’s true that some corporate leaders lie and steal, and that some government officials try to keep things secret (but usually fail).
Q: Then how do they rule?
A: That’s a complicated story, but the short answer is through open and direct involvement in policy planning, through participation in political campaigns and elections, and through appointments to key decision-making positions in government.
Q: Are you saying that elections don’t matter?
A: No, but they usually matter a lot less than they could, and a lot less in America than they do in other industrialized democracies. That’s because of the nature of the electoral rules and the unique history of the South.
Q: Does social science research have anything useful to say about making progressive social change more effective?
A: Yes, it does, but few if any people pay much attention to that research.
liberal
@Zifnab, @PeakVT:
While I support raising tax rates (though don’t forget that the definition of “income” is just as important, as is the fact that currently cap gains are taxed differently), I think a better way than either taxing or regulating salaries is to emasculate the financial sector (via regulation) so its share of GDP is about the same it was before it started climbing (1980 or so, IIRC). That way, the bite out of their ass would be so large the total comp would have to come down; and more importantly the sector’s ability to screw up the real economy would be mitigated, if not eliminated.
I think John had a post about the fraction of GDP a few months ago.
liberal
@CynDee:
But…but…but…as many posters have pointed out in other threads, Obama can do nothing about this! Only Congress can legislate such changes! /snark
The Moar You Know
@Irrelevant,YetPoignant: Although the rich have taken a lot from us, they haven’t taken everything; and the math of this particular equation is obvious to all:
Riot in the streets and they’ll take what little you have left; your job, your car, your income, your kids…hell, they’ll lock you in prison, where the only freedom you’ll have left is the freedom to get repeatedly ass-raped, if you riot enough.
Only when people literally have nothing left to lose will they riot. I’ll bet most posters here have plenty to lose. I certainly do. We won’t riot.
liberal
@El Cid:
Which is yet another reason why there’s no land value tax.
The mystery to me is why those on “the left” tend not to support it, even when it’s explained to them.
The Moar You Know
@El Cid: That’s awesome. I had a class with him many years ago during my stay at that fine school.
Irrelevant,YetPoignant
@The Moar You Know:
We have nothing to lose but our jobs.
Oh, wait . . . .
HL_guy
“Compensation is rebounding.”
Umm, from what “drop” is it rebounding? The markets didn’t tank until 1/2way through 2008. It is now 2009.
I remember hearing about everyone getting their “contractually set bonuses” at the end of ’08, amongst all the other dismaying market news.
Was there a ‘down month’ for these poor saps when they made < $200,000 apiece, when I wasn’t looking?
El Cid
@liberal: I’m not familiar with that policy recommendation.
FWIW, the above source would distinguish U.S. growth politics from many other nations by the fact that there are no large scale (i.e., state or federal) property use regulations, so it all comes down to local manipulation and local cross-border (i.e. county to county) competition and threats and influencing and bribes.
Dale
Why is this a bad thing? If the banks can keep turning a profit and can repay the loans they took from the Govt., that’s a net gain for everyone. The fact that some in the financial services industry are doing well shouldn’t get you down – that’s just envy. Keep in mind too that many of these folks are the ones who bankrolled the Obama campaign, and who actually back their progressive values up with financial donations to the Democratic party in general and usually to progressive members of the party and to Obama in particular. The blog rants are cool and everything, but they don’t pay the bills.
Chances are these highly paid traders, lenders, and managers share many of your values and aren’t the ones who oppose a marginal rate tax hike – if you want to cast blame or show your disgust it’s better to look down than up in most cases. It’s the salt of the earth hicks who go to tea parties, oppose gay rights, any form of stimulus, any tax increase, withdrawal from Iraq/Afghanistan, and usually anything else that stands a chance of improving this country. It’s the same pretty much across the world – those who get lucky and do well are usually personally progressive and not opposed to taking a hit if it helps someone who hasn’t gotten so lucky. And it’s usually the bottom feeders that drag things down.
liberal
@El Cid:
You should be.
A geolibertarian FAQ
Are you a real libertarian or a ROYAL libertarian?
While I’m not a geolibertarian myself, these essays are good. They show (among other things) that government actually redistributes wealth up the ladder, from the productive to the owners of land and other rent-producing assets. (Read: from the productive to parasites.)
The beauty of taxing land value in particular and rents in general is that (a) it’s efficient (no economic distortions—unlike taxing income, where disincentives can be created) and (b) equitable, because rent collectors don’t earn their income, they just seize it from others.
A classic example of land value economics is a government decision to build a subway stop. Land values there skyrocket. Why should landowners collect that value, when government created it?
ksmiami
What’s worse is that these guys don’t um actually DO ANYTHING but push money around
liberal
@Dale:
LOL! The value of what the government has given the financial sector exceeds the value of the formal “loans” by at least an order of magnitude, probably two.
It’s not envy when they’re stealing the money from the taxpayer, whether directly via the Treasury or indirectly via the Fed.
Please don’t post about issues you clearly know nothing about.
LOL! They steal the money from us, so we can’t criticize them because some of them contribute to the Democratic Party.
Pathetic, unless intended as prime spoof.
El Cid
@liberal: I’ll look this over. Philosophically, I’m just not a libertarian in that I do not view private property, even if metaphorically redefined as self-property, as the basic and logical functional unit. I think the basic functioning property is democratic participation in decisionmaking, even when regarding matters considered as the common property of all. On the plus side, they recognize the conflict between use value and exchange value.
The Moar You Know
@Irrelevant,YetPoignant: 85% of the populace is still employed. Call me when it’s down to around 40% and we can do your street riots then.
Don’t forget, we didn’t have riots even during the Great Depression; and we had people starving to death in the streets for real back then. Now, not so much.
Seanly
@Dale:
They can make all the money they want. However, their shareholders might like to see some of that come their way in dividends and increased share price.
Also, let’s be honest and call it all income. We’ll tax it as income and let the tax rates go back to pre-Bush levels.
WyldPiratd
MN Pundit sez:
You forget the principle ethical mindset of the titans of business {and most of the American people sadly}:–Fuck you, I got mine.
El Cid
@The Moar You Know: It’s always an odd question about the relation between popular protest / revolts and changes in political activity, because it’s always (almost always, at least) a tiny minority which engages in protests or riots but occasionally this does correspond with social change.
At least, the constant protests, strikes, wildcat strikes, vandalisms, etc. of the 1930s were viewed as important social indicators by the powerful and the establishment, and thus another impetus for reform. Certainly there was no widespread, majoritarian revolt, yet what activity there was was viewed as extraordinarily significant.
jcricket
We need three things:
1) Higher taxes, at least back up to Clintonian levels, if not more. Perhaps it’s time to erase the differential between capital gains taxes (at least for individuals) and regular taxes. I seriously doubt it will have negative side effects – as most people who get the cap gains rate are big money winners already.
2) Higher corporate taxes. Corporations pay less of the tax burden than ever, basically. Individuals, even the rich included, can’t make up all the tax gap.
3) Serious financial sector regulation. A lot of the “profit” these companies are making, allowing them to pay super-fat-cat salaries, is through BS like overdraft fees and the crap fees they tack on to all the actively managed/loaded mutual funds. Cap the amount the credit card companies can charge for each transaction. Enforce sane leverage/debt limits. Pass regulations that prevent private equity firms from raping the companies they take over (special dividend payouts) even as they shut those companies down. Etc. Pass maximum interest rate caps (hell, get rid of the entire payday industry).
I’m so sad for America sometimes. On one hand we have a party that truly seems to believe no regulation is good, low taxes are the ultimate goal (damn the consequences) and health care is a privilege that the market best addresses (oh, and gays and muslims suck!). On the other hand we have a party that’s too meek to even mount a defense most of the time.
I don’t give a rats ass about the first party (aka the GOP). They’re a lost cause. But if Dems can’t start playing offense (articulating to the public that taxes need to go up, and why; and why regulating corporations is a good thing) we’re fucking doomed.
Zifnab
@liberal: I don’t know. Adding regulation is good when you’ve got something to regulate. Split up the investment banks from the savings banks again. The Graham Bill was a shitty piece of legislation. Consolidate the agencies and the rules, so a business can’t just classify itself as a different entity to get more favorable regulations. But regulation to “emasculate” seems pointless.
Likewise, I don’t mind “better than 1980s growth” because – hey – sometimes a sector has a good run. Before the financial giants went sub prime, their collateralization of prime mortgages might not have been such a bad idea if the mortgage issuers were better held accountable for their products and the Moody’s index wasn’t one giant pay-to-play scheme. Maybe we could have seen better than average growth without going completely insane.
What really horrified me in the run up to the meltdown was the complete dissolution of the social safety net. Medicare was privatized under Bush, the SEC was blinded and gagged, the FDIC stopped taking in premiums, and everyone started making noises about scaling back unemployment insurance and food stamps and privatizing social security.
It’s like they were prepping the next recession to be as big as possible.
aimai
El Cid!
Now that you’ve ripped my lizard people mask off you must die. Just a second while I down my latte and pick up my blaster.
aimai
Sanka
More Obama administration awesomeness:
Thank goodness Democrats are in charge and looking out for the little guy.
Those damn greedy Republicans and their fat-cat Wall Street cronies always screwing us over.
slag
The Quiet Coup, And then, Capitalism: a love story followed up on that theme. If you haven’t seen it, you should. Like all Michael Moore movies, it’s emotionally manipulative at times and not nearly as rigorous as I would like, but it was a nice sweeping description of how we got where we are. And it was less depressing than I thought it would be because it highlighted some successful activism and some honest-to-goodness heroes. Which has always been one of Michael Moore’s strengths.
Montysano (All Hail Marx & Lennon)
@Dale:
So: causing a worldwide panic, a 50% drop in the stock market, millions of jobs lost, that’s all just the cost of doing business? Creating a $40T-$70T Gordian Knot of securitized debt (which is still hanging over our head, waiting on someone to figure out how to “deleverage” it) is a good thing?
Fuck that. I’m for draconian regulation. Reinstitute a Glass-Steagall-type separation. Get credit default swaps back under the oversight of the SEC. Dial leverage limits back to a sane limit.
I’m in the J.H. Kunstler school of thought: a nation whose main “product” is making fictitious dollars appear out of nowhere is a nation that’s doomed. We have to find a way to once again produce things of real value or we’re fucked.
Leelee for Obama
No offense BloodRush, I am equally guilty of typese dyslexia, but since there is lots of possibility that the big money is cooking the books, it just made me giggle.
Leelee for Obama
OT slightly-just saw that former Reagan money guy hawking his gold company-is never dropping to zero in value a really great selling point? I mean-just how great is that as a protection against anything?
ericblair
@Montysano (All Hail Marx & Lennon): I’m in the J.H. Kunstler school of thought: a nation whose main “product” is making fictitious dollars appear out of nowhere is a nation that’s doomed. We have to find a way to once again produce things of real value or we’re fucked.
This is the main issue: since Saint Ronnie moved into 1600 Pennsylvania, the financial system in this country has been steadily deregulated in the name of efficiency and free market dogma. The result of all this has been a massive investment of capital into rather shoddily built houses in the middle of nowhere and huge luxury condominiums with capacity far exceeding local demand. Plus, a huge leveraging of this capital without normal safeguards and an enormous industry of making side bets on all this activity without capital reserves against losses. Free market capitalism was allowed to do whatever it wanted, and this is what it did.
Gus
That’s not a bug, it’s a feature. The acrimonious bullshit over nothing keeps us distracted from the fact that politicians don’t run the country.
GranFalloon
This is not evidence of free-market capitalism gone wrong, it is evidence of republican socialism gone wrong. Bush and Co., and the top-tier banking executives whom he propped up, remind me more of Mother Russia – or, more specifically, Brezhnev-era Mother USSR.
Is anyone surprised that, when Bush doled out free money to the same bankers who mismanaged money in the first place, the bankers acted irresponsibly. It’s just like the Dear Party Leaders in USSR. They don’t participate in the whole “communism” thing – at least not while fondling their Faberge eggs and eating caviar and drinking Stoli by the barrelful.
Ditto here – State-funded financial institutions, salaries and bonuses guaranteed by the state in 2008; state-guaranteed obligations; while the individuals reap the profits from their ill-advised Five-Year Plans to screw over americans.
And Obama is called Socialist?
Martin
Time for Holder to start dropping anti-trust on these guys and blowing them into a million pieces.
Comrade Dread
They can afford this since they have both our tax dollars and are quite busy screwing their customers by raising rates on loans and credit cards even for customers with great credit who have never been a day late on any payment, even through their own personal problems with a pregnant spouse being laid off for four months and they cut back on personal expenses because they believe strongly in living up to their contracts…
Not that I’m still bitter about that or anything, Bank of America…
Comrade Dread
In other news…
Dow nears 10,000
I’m sure any of you out there still looking for a job feel really f***ing great that the stimulus and recovery have been such a success for Wall St.
MarkJ
Other than repealing Glass-Steagal, I don’t think we need more regulation. We need to enforce the regs on the books. If the SEC were enforcing anti-trust regulations in good faith, they would be breaking up BOA, Citigroup, Capital One, and several of the Wall Street investment banks precisely because they have gotten too big to fail. Do that and most of our problems are solved. What’s the likelihood that Treasury will have the balls to do it? Not high, given that a Wall Street guy is in charge.
I’m in favor of establishing higher tax brackets with higher rates to deal with the deficit – the call to return to Eisenhower era tax brackets sounds reasonable to me.
bago
It means I got a job doing medical software. Can’t complain about that.
bill
“Regulatory scrutiny”: today’s most egregious oxymoron.
Lupin
What surprises me is that there aren’t more cases of medium-level kidnappings for ransom (one of the oldest biz), as there is in Central and South America.
You could easily squeeze a modest $100K, $150K out of these people in exchange for a loved one, with little likelihood of them calling the FBI if the ransom amount is reasonable and if body parts are delivered on schedule to reluctant buyers.
There is a reason why this is a thriving business south of the border, and I’m sort of surprised we haven’t reached that point yet. Has our entrepreneurial spirit gone?
Stefan
What’s worse is that these guys don’t um actually DO ANYTHING but push money around
Not to defend each individual trade, but pushing money around is doing something. Pushing money around allows capital to be allocated to be taken from where it is sitting idle to where it can be most productively employed, thereby allowing businesses to expand.
That’s the theory, anyway. In practice the markets have proven to be not that great at allocating capital, but it’s still necessary to have people pushing money around so we can have things like mortgages, car loans, school loans, lines of credit for businesses, etc.
Stew
I have no property and resent those who do. I will vote myself some. Problem solved.
BloodRush
liberal
<blockquoteWhile BF is a liberal Democrat, AFAICT he’s also pretty much a tool of the banking industry.
Well, that problem has to do with campaign financing, which allows these banks to buy their way into influence with politicians. I think few can resist the kind of money that’s going around.
Leelee for Obama
Ha ha! That is funny, perhaps a freudian slip? no…