The last bite of the apple
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Reading about AIG in the paper today made my stomach turn. Then again, reading about Goldman Sachs added to the nausea. Reading about the stimulus money starting to create roads in San Bernadino made me happy.
Granted, Goldman Sachs, is a private company, at least it was. Now you and me (American taxpayers) own a piece. Private individuals kept pouring their money into Goldman Sachs for the slew of returns they received over the years. Billions of dollars were flowing through the coffers. Lloyd Blankfein awarded himself $70 million dollars in bonus money in 2007. He also gave out $20 million dollar bonuses to the his top soldiers. Why the private investors in Goldman Sachs were not outraged that those type of bonuses were being distributed instead of putting the money back into the company to insure a solvent organization is beyond me. I guess everyone was living so high on the hog that people either thought that is was okay for the masters of the universe to take a huge piece of the transaction made with their money or they thought privately, I wish I was an investment banker. Now, we are seeing greed coming to a head.
AIG, another disgusting organization. Giving out over $160 million dollars of bonuses last week to the group that was involved with the downfall of the organization. Doesn't even matter if they were giving bonuses to the people who had a profitable division, it is about the whole company. I guess that the thought going through the people who cashed their bonus check last week is that it was like taking the last bite of the apple. The party is over.
About a month ago, we took all of our money ( actually it was only Jessica and Emily ) who had their money in Apple stock. We discussed that we wouldn't invest in or keep money in an organization where the CEO wasn't being honest with his share holders. Both Fred and I have policies with AIG. The first thing we are doing when we get back is pulling our policies and putting them somewhere else. If we had money in Goldman, although we don't, I would have pulled the plug the second I was aware of Lloyd get a $70 million bonus because that is insane. It isn't like he created a cure for cancer, he just made money on the growth of peoples personal capital. Any of these companies that have taken taxpayers money and haven't made significant changes to the way they ran their business into the ground is no longer getting our cash. AIG, as far as I am concerned, will no longer carry any of our policies.
I would think, call me crazy, that the masters of the universe, once revered in their communities will now be looked at with disdain. When the people who cashed their bonuses at AIG or the people at Goldman who blew through their millions of dollars in cash, go to school events with their kids or community events, I'd find it hard to believe that there isn't a tax payer in the group who isn't taking off their rose colored glasses and seeing exactly what these people are. People who not only consider themselves entitled but people of pure greed. They haven't created anything except a big fat bank account for themself and a mess for the American economy.
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Comments (Archived):
I can’t wait for complete collapse of capitalism and the American Empire as a result. Long over-due … but better late than never. The “unabashed capitalist” husband of yours won’t be happy about it though.
i am secretly a communist so it will be ok with me
I knew it all along! Amazing cover though – congrats!
Communist megamillionaires. Got to love it.
It’s all about redistributing the wealth you create
The rabbit hole runs much deeper than AIG and Goldman. It’s easy to point fingers at them. But it’s American society that was complicit in, encouraged and rewarded this type of behavior. Personally, I don’t yet see society at large willing to modify it’s values. Change starts from within and this mess is no different.
Colin…I think you hit the nail on the head. Change must start from within.
Nice post but I think you are opting for an emotional solution that is more likely to have a negative economic impact for us all.AIG is in the midst of an asset sale. There is a reported $11.2 bn deal from MetLife to buy AIG’s life insurance unit (see http://tinyurl.com/ayxoda). The sale of a few foreign assets has recently been suspended. Many other units will soon be on the block. AIG (i.e. the United States government) has been looking to up the ante on all asset sales and this negative sentiment undermines our ability to get a better price. In other words, your proposed boycott reduces the amount taxpayers get as payback for our $85 secured loan last Fall.Forgetting about the asset sales, a weak AIG is also bad for every day Americans. The loss of AIG’s underwriting capacity decreases competition and increases the risk of price hikes. My homeowner’s policy comes due next July; the last thing I need is one less player in the market from whom I can get a competitive quote.Despite having attended my alma mater, Geitner is no genius. But, as head of the NYFed, he orchestrated the original September bailout and is intimately familiar with every aspect of this company. While I do not condone rewarding bad behavior, the $165m in bonuses was the agreed upon deal when “We the People” made the investment in AIG. Geitner’s ability to fix AIG is probably the only reason he was allowed to rise to the post of Treasury secretary. And we need to let him. The $86k hunting trip, the $400k executive boondoggle and now this $165 bonus fiasco represent but a spec on the chalkboard of lost value that will ensue if AIG and the United States government loses this PR war. In my final analysis, we need to “LEAVE AIG ALONE.” #my2cents
I would have been happy to “LEAVE AIG ALONE” some $180,000,000,000 ago. Now, not so sure they should be left alone. Isn’t the fundamental tenet of capitalism that you pay for your mistakes? ASk Fred – apparently he’s a pinko Commie and know’s how these things work.Too big to fail? My arse. They were just a conduit to funnel money to their counterparties.
nothing is too big to fail.
I’d agree that nothing should be allowed to get too big to fail, but the rest of that phrase is “too big to fail without causing incredible damage to the financial system.”The reason we, the people, had to keep AIG and the investment banks from collapsing is that they jointly could have destroyed our financial system in a way that would have taken us years and a lot more money just to rebuild to the shaky level we’re at now.I think your anger is entirely correct, and I share it totally, but your solution is terrible. AIG is owned by the government, meaning by you and me. Any action you take now to reduce its value is money that you will have to make up later, either in increased taxes or reduced government services.If you want to strike back at the problem, keep on your congressfolk for the next several years to implement meaningful and lasting reforms. Personally, I’m for progressive taxation on asset pools and corporate headcounts above a certain size, so that nothing can ever get too big to fail again.
Agreed. We need to make changes in the system so that this never happensagain. With that said, something else will happen again but in a differentform.
Wow – this is truly mind boggling. Those in glass houses! Umm – your husband is a venture capitalist. I’m not sure what he’s whispering in your ear but he’s a mini-Goldman Sachs. See those evil investment banks facilitate capital for companies so that they can grow and and invest and maybe one of them will cure cancer some day. A venture capitalist facilitates capital for companies so that they can grow and invest and maybe cure cancer some day.
Yes he does but it is far from the Goldman Sachs model. VC’s take a verysmall percentage of the overall investment to pay for running the day to daybusiness. The upside is when the companies sell but they pay theirinvestors back first. Also, VC’s are very involved with the day to dayoperations of their investments, hopefully creating growth, jobs and newindustries. I guarantee you, I don’t know one VC who takes a $70M dollarpaycheck just for running the day to day operations of the business.
Here’s where you, Gotham, are an amazing example of a truly ignorant, and possibly dangerously stupid, individual.AIG isn’t a “disgusting organization” — it’s an example of a company that should have simply been said “no” to. It’s a company that should have gone out of business. A company that should not have been taken over by a liberal government bent of the socialization of the US Economy (and succeeding).The culprit that you refuse to admit to is Congress (and the Administration) trying (and succeeding) to enter into a public sector business to “fix” it. I wonder — are you going to cancel your vote for US Senator and US Rep? They caused this mess more than AIG did (who was paying out on contracts they created — based upon, oddly enough, actual legal precedent).Are you fine with the TRILLIONS of dollars in spending that the Congress and Administration are doling out without any oversight whatsoever? Are you fine with the Dodd Amendment that allowed AIG to hand out bonuses? Are you fine with Barney Frank fucking up the housing and banking business so much that it brought down the entire industry? Are you fine with the continued screw ups by your elected officials to tax, spend, rinse, repeat?Your ignorant populism shows the fool that you are — and your little dog too!
Ouch Max. You need a time out! or a spanking. Gotham Gal is not ignorant, imho she is at worst under-informed; there is a difference. We are all under-informed; we each know a piece of the puzzle, hopefully not the same piece, but not the bigger picture. Until web 2.0 technology was commercialized, there was no way for us to talk to each other to put this puzzle together. If anything, I commend her for having an opinion and putting a literary stake in the ground.When you grow a set of ‘cahones,’ start your blog and open yourself up to the criticisms of the masses, then you earn the right to call people names. But, for as long as you insist on hiding behind a veil of anonymity, lets keep the comments constructive and civil. Jeez Loueez!
Goldman has not been private since 1999. It was the most profitable firm on the street the year Lloyd took his $70MM. Egregious number, yes. Deserved based on production, maybe. Criminal, no. Why were SHAREholders not enraged? Again- most profitable investment bank in history. AIG- “Disgusting Organization”. Wow. That’s a strong statement from someone who has demonstrated they are not finance literate. This was a Fortune 10, Dow 40, pillar of American business for 40 years. There are 116,000 employees all of whom have families and lives to support. The % earning million dollar bonuses is obviously minuscule. Canceling your insurance policy hurts no one who had anything to do with the downfall of AIG. Do some research, talk to some people in the know, and learn what is actually going on in this mess. This is by no means a defense of the situation- just a balanced commenter .
I think the world is moving away from recognizing THAT a person is wealthy, and more towards recognizing HOW they’re wealthy, and WHAT they choose to do with that wealth. This is a good thing, and we’re just ripping the band aid off now.In my neighborhood, an investment banker showing up in a Hummer gets laughed out of the party…..an entrepreneur rolling in with a Prius is the new cool kid…..both could have the same W2, but one is socially rich, the other is socially insolvent.This is good for us.
This is very good for us. Good for America. Good for our kids. There isnothing wrong with success which can come in many different forms. If youhappen to have financial success remember that with that comes aresponsibility to give back and do the right thing. Making moneyresponsibly is also something our children should learn from. I agree, weare ripping off the band aid right now and seeing the real deal.
In addition, this is really a great commentjoanne [email protected]
Bravo. I teach a course at Poly on Service Innovations and I can’t stress enough the importance of creating value over making money. As a society, we are so focused on making money, fast money, that we’ve lost our way. While I disagree with Gordon Gekko’s character in the movie ‘Wall Street,’ there is truth in the comments he made at the shareholder’s meeting.Self-interest is the foundation of a capitalistic society and there is a role for greed in the system. Sadly, speculators are a necessary evil; they keep the system honest and efficient. But we can’t be a nation of speculators and financial engineers. Somebody has to be focused on creating real and sustainable value. Enough with the transferring of risk and capital, its time to build again. Hammer anyone?
Good comment. Years ago our parents bought homes that created value overtime. That is a good thing. Making money is something that generally comesover time with hard hard work. Making $70M for one year of running acompany is not teaching anyone a good lesson.
You’ll ‘love’ this:http://abcnews.go.com/Blott…”JPMorgan Chase To Spend Millions on New Jets and Luxury Airport Hangar”