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Not sure exactly where to post this, so I'll try here.
Watching the C-Span coverage today of the bankers testifying before the Congressional panel which is trying to figure out what happened and what to do about it, I was struck by one thing (among others).
These bankers, while much of America is jobless and losing their homes, collectively earned (personal income) about half a BILLION dollars in the last two years.
Is there a disconnect here?
Hello A:
I'm not sure what you're asking. Should bankers earn so much money when lots of people don't have work? Should the government DO something about it? Should the bankers DO something different? Do YOU think there's a disconnect? Do you think that disconnect IS responsible for our economic problems?
Let me just tell you what I think. I WISH bankers would operate ethically. But, if they don't, the government should impose regulation that forces them to operate ethically.
I should say RE-regulate, because we once did have a handle on them. But during the last 30 years of DE-regulation, the problem that we regulated them for in the first place, has reared its ugly head again.
Now, is there a disconnect between the banks management and the banks customers?? Yup!! Bankers used to make money by serving their customers. Today, because the regulators let them, the bankers make money by RIPPING OFF their customers.
At some point in time, the bank managers found out they could make MORE money by hiring lobbyists to get favorable legislation passed, than they could by improving their services to their customers.
THAT is what caused the disconnect. It's still happening. I'm SURE that when a banker wants to make more money, he heads to his congressman's office, instead of his R & D department.
excon
The disconnect here is that those who caused the crisis are profiting from it - profiting in a big way.
Yes there is a big disconnect and it is called capitalism, the idea that a few should profit from the many. The pay of bankers and in fact many senior executives is obscene and nothing more than greed since there can be no justification for such payments. The pay of all senior executives should be tied to the performance of their organisations and that means if there are losses, no pay. I blame spineless investors for allowing the situation to developQuote:
Originally Posted by Athos
What was clear to me during some of the testimony of Goldman Sachs (Lloyd Blankfein) was how obvious he was about dodging very poignant questions by Senator Levin. Blankfein looked confused at times and even very elementary in his explanation of his banks practices... like a teenager trying to explain why there was a bag of pot under his bed (with his mother standing there with it in her hand). "Ma, it was for medicinal purposes due to the aggravation and stress brought on by my SATs and AP Statistics."Quote:
Originally Posted by Athos
Doesn't anyone talk straight and honestly anymore?
These people were not honest in the first place. They knew that the investments they were recommending were duds and likely to unravel at some point. They just didn't want to admit that in fact they had committed fraudQuote:
Originally Posted by jakester
In regards to bank " $ employees" (meaning anyone getting significant salaries) they are paid by the bank (ie the officers or board of directors) and paid to attract them to the bank. If they are over paid then that is something the shareholders or board of directors is supposed to be addressing, they don't because most of the interested shareholders are other banks/institutions (mutual funds/pensions).
The senate should be asking themselves why they didn't read the bailout bill and realize they were handing over money to corporations with no restrictions--that was malfeasance. What the banks did was just common sense, if someone hands you a ton of money and says hey here this is to help you out and you turn around and spend it on hookers and gambling, well that's your business (poor moral choice though).
The other point is that what GS did was offer to people high risk (potential high return) investments. Would GS invest in them, no they felt they were far too risky and likely to fail, but if the investors were looking for high risk they got it... they lost but they got what they asked for! Had the opposite occurred and the securities had doubled in value, would any of the investors be handing the money back to GS saying.. oh this is too much and since you thought they were bad investments you shouldn't be penalized.. Umm... no.
And of course anyone sitting before Congress is going to pretty much keep their mouths shut as much as possible... Congress has no real power when it comes to punishing (beyond regulation) UNLESS you lie... then your screwed, ask Clinton.
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