Random Rants about Bonuses

So when I started this blog, I wanted to raise discourse. I promised not to be angry.

Now I break that promise, and I deeply apologize.

The ceremonious event is the Goldman Sachs bonus fiasco. Last week, Goldman reported record profits. They also then paid their employees bonuses of $700,000 a piece. Now, I understand that the top marginal rates that these people have reduce it, let's overshoot to 50%. That still is $350,000 a piece take home.

Both Ezra Klein and Matt Taibbi point to what is going on, with Taibbi, closer to the anger. They essentially point out that Goldman Sachs returned to profitability only on through taxpayer dollars. They helped to create the mess we are in, and now they are being rewarded.

It is worth noting that according to IRS data average and median income (indeed adjusted gross income, or AGI) for a family of four hovers around $45,000 a year. So this is a fair amount of money that they are taking from us. It may be the largest upward transfer of wealth I know of.

Klein also points to the counterfactuals. I agree with him too, that the counterfactual scenario is difficult.

For me though, my anger comes from betrayal in many ways. I supported the stimulus and the bailouts, because I realized that these were institutions that were too big to fail. I knew that we needed liquidity.

However, they never came through on that. They hoarded. They managed to further concentrate, so they are now even bigger and more indispensable. They never restored liquidity. And now they pay the bonuses.

The betrayal comes because I once attacked my more progressive friends who screamed against bailing out the banks and the "rich." I supported this, because I saw the intervention of the government as necessary. I responded with horror that Members of Congress I knew initially voted against the bailout to my friends who all supported it in the financial world.

And what do I get? Nothing. I, and our policy-makers, whom I do think were acting in good faith, instead get this betrayal. The anger is yes based on class matters. But, it is even more the broken trust.