Bailout Money for bonuses
Taxpayer bailout money made Government to own majority stakes in banks like Citi Bank, Bank of America, Fanny Mae, Freddy Mac, AIG and a few more. However the board members who have presided over these disastrous institutions should have been fired. Unfortunately that’s not the case! Thousands of innocent employees of the firms are losing their jobs, while top managers may stay on. And receiving five times the average annual workers’ salary as part time (bonus) compensation. Isn’t that a shame?
Unfortunately the average taxpayer has no idea how these bailouts work. He may be willing to believe that giving Wall Street hundreds of billions of his money would somehow make his own house going up in price and saving the economy to be back on track soon. Probably not understand macroeconomics, but by now having a grasp how the old guard spends his bailouts.
Today, under pressure, AIG revealed what it did with the bailout money. Everyone is shocked, outraged, or furious about it. Last week it originally was understood the amount in bonuses paid out was $160 million. The real amount appears to be $450 million, says the Wall Street Journal, and one member of Congress charges that many bonuses were disguised as other expenses and the real total sum more likely amounts $1 billion.
It came as no shock (see below) to discover that Goldman Sachs is at the top of the list of recipients. Goldman's main man, Government’s treasurer was in the room with the feds – as the only representative of Wall Street - when the decision was made to rescue AIG. What's more, the feds' main man at the time - Hank Paulson - also used to be the top boss at Goldman was present as well. So the fix quickly was made. The government gave money to AIG and AIG gave it to a long list of speculators, including Goldman and Merrill.
As I wrote on March 11, in my article ‘Bankers Bonuses and More’
“Policymakers now have spent Trillions of dollars for these fraudulent bailouts. AIG, for example, has been described the place 'where taxpayers' money is going to die.' However it doesn't die in AIG, it goes to pay off debts to the biggest creditors called Merrill Lynch and Goldman Sachs. Because Goldman with Tim Geithner now Treasurer in Obama’s Government and the FED were present when the decision was made to 'rescue' AIG. Goldman may not have mentioned at the time that AIG owed Goldman billions of dollars. With the consequence that taxpayers’ bailout money to AIG ends up at Goldman. Doesn’t that smell bad?”
A final suggestion to think about: The prudent savers are paying twice, first for bailing out the imprudent bankers and their cohorts with their tax money and secondly by having their interest income reduced by the rate cuts from the FED. It would be nicer to get the imprudent pay for the prudent people.