BANK BONUSES WHILE KILLING GROWTH, GOOD JOB!

Written by Jim McGrath Thursday, 07 January 2010 19:15

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THEY EARN BONUSES AT TAXPAYER EXPENSE, BUT WILL NOT GIVE!

WHY SHOULD THE PAY CZAR APPROVE ANY COMPENSATION PLAN?

We see that pay czar Kenneth Feinberg will review AIG and others' business plans for executive salaries, in the article below.  There should be virtually no bonuses for these banks and firms that have sunk their companies into the ground and ruined the economy, or pensions and savings.  Why would the pay czar even consider such a move? 

Feinberg Says Lack of Pay Authority Is Disappointment (Update1)

By Ian Katz

Jan. 6 (Bloomberg) - Kenneth Feinberg, the U.S. special master on executive compensation, said he's disappointed he lacks authority to have greater influence over Wall Street pay.  "The biggest disappointment, I think, is that under the statute my jurisdiction is so narrow, and so circumscribed, that I have no real direct mandatory power over other Wall Street or other national companies,"

Feinberg said today in an interview with Bloomberg special contributor Judy Woodruff. The entire interview can be seen this weekend on Bloomberg Television's "Conversations with Judy Woodruff," airing Jan. 8 at 6 p.m. New York time.

Feinberg in October ordered pay cuts averaging 50 percent for the top 25 executives at Citigroup Inc., Bank of America Corp. and five other companies that took U.S. bailout money...American International Group (A.I.G.), Chrysler Group LLC, Chrysler Financial Corp., General Motors Co. and GMAC Inc. must submit 2010 pay plans for their highest-paid 25 employees by Jan. 15. Feinberg, 64, said he will rule on those proposals in the first quarter.

"I have my fingers crossed that we have developed some guidelines, some compensation prescriptions that will be emulated," Feinberg said...

WHILE RECEIVING PUBLIC LARGESSE, BANKS CONTRACT CREDIT, CONTRARY TO THE BAILOUTS MANDATE TO LEND TO THE AVERAGE CONSUMER TO STIMULATE ECONOMIC GROWTH

....WHILE WE PAY HIGHER FEES, NONEXISTENT SURCHARGES, OUR PENSIONS AND SAVINGS TANK...WHY?

Because we have become accustomed to giving business everything it wants.  This sacred cow must be slain, lest it block the train of true economic progress, where government does not allow firms too big to fail to remain economic giants with great sway over us, only for their own profit.  These firms and banks were preserved in order to revive the economy through lending but the figures show the complete opposite. Credit keeps contracting, as these zombies eat up and hoard everything in order to survive and grow fat, devouring government bailouts in the form of pay and bonuses, devouring the consumer by increasing fees and costs of doing business, and tanking the economy by starving small business with refusing to lend and thus spark business revival.  To see how credit is precipitously contracting, see the graph accompanying the article below at:

http://www.businessinsider.com/rosenberg-the-economy-still-sucks-credit-is-tight-and-banks-are-hoarding-cash-2010-1

ROSENBERG: BANKS ARE HOARDING MORE CASH THAN EVER AND IT'S KILLING GROWTH  by Vince Veneziani, Jan. 7, 2010

In this morning's Breakfast With Dave newsletter, Street favorite David Rosenberg discusses at length the troubles that still exist in today's economy and financial markets. One topic Rosie touches on is how despite continued government intervention, growth and credit remain stagnant.

It says, "Look at the charts below and you will see how little effect the policy stimulus is exerting leaving the government continuing with demand-growth policies, such as extended and expanded housing tax credits, and the Fed, Treasury and the FHA doing all it can to keep the credit taps open ... and for marginal borrowers at that. So the charts below show what, exactly? That the transmission mechanism from monetary policy to the financial system and the broad economy is still broken fully 2½ years after the first Fed rate cut. Cash on bank balance sheets as a share of total assets is at a three-decade high.

Bank lending to households and businesses has contracted more than 7% from a year ago, an unheard-of rate of decline unless you want to go back to Japan in the 90s or the U.S.A. in the 30s."