Bonus Penalty – UPDATED10.16.09
Goldman Sachs is recording massive profits this quarter and now they’re looking to reward their employees with equally large bonuses. Many will be getting as much as $700k, others in the million-dollar-range.
And the general public is upset.
It seems that this is one of the backlashes of the recession and the fact that it started with the meltdown of the financial industry. Regular working folks who have yet to get back to work find it a tough pill to swallow that a corporation in the very industry that caused them to lose their jobs has recovered quicker and better than they have.
I can’t say that I blame those people who are bitter toward the high-earners of Goldman Sachs. But, at the same time, it’s not the bankers’ fault. The corporation paid back the billions in taxpayer bailout money. They used the money to get back on their feet and now they look as strong as ever. This is a good thing for the economy, assuming that the financial methods of success aren’t based on cataclysmic derivatives or other scams. And, according to the article, most of their profits were in the “fixed income and equity markets,” not high risk loans and mortgages.
Let’s hope that this is a sign that the economy is indeed turning around, that the bailout did help these corporations stabilize, and that our financial district is strengthening to the point where it will actually be able to support growth across the country. Strong banks mean increased lending again, more homes being built, and then we can hopefully enjoy a bull market for another decade or two before corruption brings it all down again.
News like this is most likely the reason the general public has such disdain for rich bankers getting even richer. Not that the employees of Goldman Sachs were doing anything remotes similar to that of Raj Rajaratnam and his associates. The thing is, regular people lump big-money bankers and financial managers into one big group, even if their work is vastly different from each other. And for a while, before the crash, it seemed that those in the supposedly low-risk banking areas were acting just like those crooks like Rajaratnam and Madoff.
The trust is gone. Hopefully more of this governmental crackdown will clean up more of the corruption that has turned Wall Street into something more resembling the high-stakes room at the Bellagio in Vegas.