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Pork Good, Bonuses Bad

That's the official word from President Obama.

It's awful when the financial sector gives its employees $18.4 billion in bonuses. It's inexcusable when Merrill Lynch CEO John Thain spends $1 million to redecorate his office. And when CitiGroup wants to buy a $50 million corporate jet, they must be stopped.

But ...

$400 million for HIV and chlamydia testing, $20 million for off-road trail maintenance and restoration, $600 million for new Federal government cars, $527 million to the Coast Guard to create 1235 new construction and acquisition jobs (that's $460,000 per job), $75 million for smoking cessation programs (how will we pay for SCHIP then?), $7 billion to modernize Federal buildings and other facilities ... that's all perfectly okay. Just your tax dollars at work.

As our own Baron von Ottomatic recently explained, the Federal Budget has nothing on Monty Python's infamous Mr. Creosote.

I'm not going to defend the bosses in the financial sector who recklessly loaned money and bet the bank (literally) that the stock and real estate markets would always be up. They blew it big time, and their greed destroyed tens of thousands of jobs in the banking sector and cost the American people trillions of dollars in lost savings.

But what business does the Federal Government have telling banks how to spend their money? Oh, that's right -- the banks are now being propped up by the government, so all of the sudden they've got to be "responsible."

Yet when the government wastes money on pork, who's going to stop them? From what experts say, at least $54 billion of our "stimulus" money is going to programs deemed ineffective or unable to pass basic financial audits by the OMB. Responsible? No, but it keeps the folks in DC smiling. After all, employees of mismanaged, inefficient, or ineffectual government agencies should never lose their jobs or bonuses, should they?

If you want to know the true value of those evil financial industry bonuses, just as the city government of New York, which is in full panic mode right now in anticipation of a catastrophic multi-billion dollar budget shortfall in the wake of the carnage on Wall Street this past year. As Rush Limbaugh correctly pointed out, even the $1 million Merrill Lynch extreme makeover* put money into the pockets of interior designers, furniture manufacturers, and precious blue collar transportation and construction workers. Further, how many pilots, maintenance personnel, and facilities workers lost contracts or jobs because CitiGroup won't be buying that jet?

Maybe it's time for government bureaucrats to do a little navel gazing and ask some serious questions, namely whether or not their insatiable appetite for pork might be one of the root causes of the painful series of market bubbles and meltdowns that have crippled us financially during the last ten years.

It seems that while profits are high, tax revenues are rolling in, lobbyists are flush with cash, and campaign coffers stay full, government doesn't give a damn about the private sector or how it makes its money. The only thing that matters seems to be making sure that there will be more money available next year for even bigger spending programs. It's a bi-partisan effort, too. Greed knows no party lines. Republicans stood by banks; Democrats defended the mortgage giants. The Clinton Administration excused the excesses of Enron and flimsy dot-com companies; the Bush Administration allowed energy futures to be manipulated.

Yet the excesses of the banks and mortgage lenders pale in comparison to the amount of money spent at the local, state, and Federal level by lawmakers with money burning holes in their pockets. But that ship has sailed. What happens now, since the bottom has dropped out of their biggest source of revenues -- wealthy professionals in the top income tax brackets?

News reports state that President Obama celebrated the passage of his gargantuan stimulus plan by throwing a black tie cocktail party at the White House, including a gourmet meal that featured $100 a pound Japanese wagyu beef. And they want to lecture others about fiscal responsibility?

I know, I know ... at least they didn't serve pork.
__________________________

*Again, I'm not defending John Thain. He pulled some serious financial shenanigans that justifiably cost him his job as Merrill Lynch CEO.


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Comments (37)

Oink, oink.... (Below threshold)

Oink, oink.

To quote Nancy, "We won". ... (Below threshold)
GarandFan:

To quote Nancy, "We won". Unless the Republicans in the senate can get major concessions on this current pig bill, every damned Republican in both houses had better vote NO! Let the Democrats swing in the wind because this pork fest will solve nothing. Remember the hyperinflation of the late 70's, you ain't seen nothin' yet. And Nancy and company can take credit for that as well.

More money for contraceptiv... (Below threshold)
hyperbolist:

More money for contraceptives and STD testing a) makes good fiscal sense and is b) the right thing to spend money on from a moral perspective, economics aside.

But Republicans hate sex so it's no surprise that some amongst the disproportionately vocal minority will decry such expenditures. Thankfully nobody has any reason to listen to them.

hyperbolist, you are... (Below threshold)
MPR:

hyperbolist,
you are soooo funny! I posted what you said on a few other sites and we are laughing our asses off. You got to stop your, killing us!! You really are!

"More money for contracepti... (Below threshold)
JB:

"More money for contraceptives and STD testing a) makes good fiscal sense and is b) the right thing to spend money on from a moral perspective, economics aside."

That's nice, hyperbolist.

What exactly does it have to do with stimulating the economy, though?

WELL BILLY BOB ITS TIME TO ... (Below threshold)
Flu-Bird:

WELL BILLY BOB ITS TIME TO SLOP THOSE DEMACRATIC HAWGS AGAIN AND JUST LOOK AT THE SIZE OF THEIR TROUGHS DONT YOU RECON THAT PAW IS SPOILING THEM TOO MUCH?

MPR, you forgot to say "Oba... (Below threshold)
Brian:

MPR, you forgot to say "Obamalala". Please don't forget again; I really miss it.

"More money for contracepti... (Below threshold)
syn:

"More money for contraceptives and STD testing a) makes good fiscal sense and is b) the right thing to spend money on from a moral perspective, economics aside."

If this were true how come NYC (which provides some $600,000 per year on free condoms) not only has a STDs and abortion rate higher than the national average but is also in dire financial doo-doo.

Considering the fact that NYC just lost $1 Billion in tax revenue from the wall street fallout, I think Mayor Nanny Bloomberg is quite unhappy about the president condemning those bonuses.

I love sex especially when it is Democrats royally screwing Democrats.

"Yet the excesses of the ba... (Below threshold)
Bob:

"Yet the excesses of the banks and mortgage lenders pale in comparison to the amount of money spent at the local, state, and Federal level by lawmakers with money burning holes in their pockets" The problem is, the money is not in their pockets; we have to borrow the money from the Chinese, Japanese, etc., and it will have to be repaid by our posterity. Or, as Dick Morris is saying today, we will simply print more money and then experience runaway inflation. In either case, the irresponsibility of our lawmakers is truly staggering.

The only bonus should come ... (Below threshold)

The only bonus should come from kick-backs to politicians, after all we care so much about you.

Funny how those bonuses are... (Below threshold)
hermie:

Funny how those bonuses are so bad; but when they go to members of his staff and cabinet departments, there is not a whisper of disapproval.

NYT reports<blockquo... (Below threshold)
hcddbz:

NYT reports

The state comptroller, Thomas P. DiNapoli, said it was unclear if banks had used taxpayer money for the bonuses,

All told, bonuses fell 44 percent last year, from $32.9 billion in 2007, the largest decline in dollar terms on record.

Even though Wall Street spent billions on bonuses, New York firms squeezed rank-and-file executives harder than many companies in other fields. Outside the financial industry, many corporate executives received fatter bonuses in 2008, even as the economy lost 2.6 million jobs. According to data from Equilar, a compensation research firm, the average performance-based bonuses for top executives, other than the chief executive, at 132 companies with revenues of more than $1 billion increased by 14 percent, to $265,594, in the 2008 fiscal year.

The comptroller said the reduction in bonuses would cost New York State nearly $1 billion in income tax revenue and cost New York City $275 million.

It is unclear if Taxpayer money was used for the bonus, yet we do know that taxpayer money will be used to fund ACORN.

Overall Bonus payments were down by 44% which means over compensation was down. (On Wall Street most people get a bonus as part of their compensation, package then there is also a performance bonus and sign on Bonus)

Congress who has overseen this disastrous economic down turns received a 2.5% pay hike in 2008.

Their peers at other NY firms received bonus payments increase of 2.6%.

The State and City of NY would be in worse economic shape if Wall Street did not pay the bonuses this year and would then require more federal money.

Bottom Line is if you want companies to change the way they do business then.
Let them fail. The ones that take the right about risk would remain. Startups with new compensations packages would replace the old way. Government funding failure has one goal and that control.

I will believe BHO when the Ponzi Scheme that is SS is addressed.

Hyper again wows the crowd.... (Below threshold)
WildWillie:

Hyper again wows the crowd. You go girl. ww

MPR, you forgot to say "Oba... (Below threshold)
MPR:

MPR, you forgot to say "Obamalala". Please don't forget again; I really miss it.
7. Posted by Brian

Hey Brian,
Now you're getting it.

And wildweenie thinks about... (Below threshold)
max:

And wildweenie thinks about hyperbolist as he types with one hand.

hyperbolist:I'm re... (Below threshold)
Rhonda:

hyperbolist:

I'm republican & I love sex

To all you right wing blogg... (Below threshold)
jomo:

To all you right wing bloggers-yup, let's give 'em bonuses so they can pump them into their offshore accounts, fancy foreign cars and vacations to Puerto Vallarta or Ibiza, that'l help the local economy real good. While we're at it, let's bring the Bushies back so the can go through another 10 trillion, those poor VIP's at Hallibuton and Carlisle gotta have their hard earned Beluga egg lunches ya know, and government seed money is wasteful, FDR was wrong with the New Deal. He shoulda' let the bums starve, then we could all happily be speaking German and raising our right arm. We can also drop S.S. Let the old farts work 'till they drop, then we can use 'em for fertilizer to plant corn for gasohol and tobacco, that'l make the farm lobby smile.
Republicans...wheww.

Jomo -Without thos... (Below threshold)
JLawson:

Jomo -

Without those bonuses New York City tax revenue's dropping like a rock. The city depends on lots of people spending lots of money.

Without the 'rich' people, without the money, the city is pretty well screwed. They're going to HAVE to cut back on all the goodies they've been passing out for decades.

(It'll be even more screwed once the big firms realize they don't need to keep their main offices in NYC - with the internet information and people don't need to be so centralized, so they can spread things out considerably.)

I see nothing commendable a... (Below threshold)
Ken Hahn:

I see nothing commendable about some activities by corporate executives. But so long as they're not asking for a bailout, it's between them and their shareholder. The shareholders can lynch them if they so desire.

The "stimulus" package is to be paid for by taxes. As a taxpayer, I have a stake in the government. My money is being spent to provide funds to ACORN, which will promptly use them to find more nonexistent Democrats. My money is being used to fulfill the fantasies of every leftwinger in Congress and to buy the votes of the ignorant and stupid who think someone else is going to pay for this monstrosity.

The far left is in complete control of the government. This is their work and its disastrous effects are their responsibility.

Honest Democrat is a contradiction in terms.

But what business ... (Below threshold)
Marc:
But what business does the Federal Government have telling banks how to spend their money?
There's two parts to that question:

1. As we've seem with TARP I the taxpayer has every right considering TARP I was a boondoggle with zero oversight and banks still aren't lending and some are taking the cash and buying offshore properties to punch-up there bottomlines.

2. However, Barack Hussein Obama, along with his new TS Timothy "Lobbyist What Lobbyist" Geitner are clearly looking at limiting CEO and other corporate honchos bonus' and similar types of remuneration via laws and regulations.

As much as I dislike some of the outrageous money scooped-up by some of the CEOs the Feds have no business stepping that deep into corporate America.

hyper - "More money for... (Below threshold)
Marc:

hyper - "More money for contraceptives and STD testing a) makes good fiscal sense and is b) the right thing to spend money on from a moral perspective, economics aside."

Well then, just how many jobs do you think will be created if this money is allocated for the purpose expressed?

If it makes sense morally and also good economics then you and the social engineers from both parties shouldn'tshed one tear if it was stripped out and presented as a separate bill to be debated on and given the thumbs up down.

Greed, Greed, Greed. Bank ... (Below threshold)
SixPointSteve:

Greed, Greed, Greed. Bank Executives are entitled to their bonuses but really how much is enough? Aren't bonuses performance related? They should be handing millions back to shared holders. How about they get their bonuses in all the bad mortgage debt they took on? It's worth nothing now, but I bet giving them the bad debt they could figure out how to make it worth something and without our tax dollars.

Perception-wise, the bonuse... (Below threshold)
BeanerECMO Author Profile Page:

Perception-wise, the bonuses are not good. However, there were contracts written for those 'executives' that contained what they would get for certain performance as defined by the two contractual parties. The boards of directors need to write better contracts that are performance-based as how the company is performing over longer periods of time; e.g., 12 months, vice 3 or 6 months. They should NOT be based solely on assets acquired or sold unless they positively affect the performance for the stockholders. Remember, businesses are in the business of making a profit for their shareholders AND the company; they are not in the business of providing jobs for everyone. Employees are there for the success of the business. The business is not there for the success of the employees. What happened to all of this hope we were hearing of BEFORE the election? Obama and the dems are depressing the economy on purpose so people will rely on the government even more and lose confidence in themselves. Well folks, you wanted Carter II, you got 'im.

Well then, just how many... (Below threshold)

Well then, just how many jobs do you think will be created if this money is allocated for the purpose expressed (money for contraceptives and STD research)?

Marc, I imagine the Dems are banking on a prostitution boom, especially among middle-class suburban mothers looking to make ends meet in some way.

But Republicans hate sex... (Below threshold)

But Republicans hate sex...

Aren't Democrats always quick to point out how hypocritcal Republicans like Larry Craig, Mark Foley, Bob Packwood, Rudy G. etc. (just to make sure I'm covering both heteros and homosexuals here) are about sex and moral values.

Hypocirtical about sex? Yes. Hate it? You've gotta be kidding me....

Perception-wise, t... (Below threshold)
hcddbz:
Perception-wise, the bonuses are not good. However, there were contracts written for those 'executives' that contained what they would get for certain performance as defined by the two contractual parties. The boards of directors need to write better contracts that are performance-based as how the company is performing over longer periods of time; e.g., 12 months, vice 3 or 6 month

It not always about Executives.

This was done by tax returns.
One thing about wall street firms is that almost all employees get a bonus. It is part of the total compensation package. Even IT folks who were not part profit centers would get 5 to 6 figure bonus. Some operators total comp package would be 35K a year where 25K would be base and 10K bonus. Then a performance bonus as to how well they were rated compare to others would come into affect. For some people they manage there finance based on that bonus coming in at the end of the year.

Having been in the NAvy where you got a re-enlistment bonus of 30K. Which was half up front and rest paid of the remaining enlistment. After having a low base pay in the Navy. I always went for a higher base for my total comp rather than a large end of year bonus. I was also a hard worker and got a decent performance bonus.

And don't forget the $1 tri... (Below threshold)
Wakeup:

And don't forget the $1 trillion that the big fat pig spent on the Iraq war!

2/3 of this economy is prov... (Below threshold)

2/3 of this economy is provided by the consumer. This so-called "pork" package will send money from Washington back to where it came from, the people of the United States, not to fat cats and corporations. The best way to stimulate business is to buy their products, not give them tax cuts. Tax cuts to the rich only become investments. Tax cuts to corporations fuel LBO's. Tax cuts and jobs for the consumer provide real stimulus by moving merchandise off the shelves of American companies, who then have to hire more workers and expand operations to make new products. If you want to stimulate GM, the most effective way is to move cars out of the showroom into the hands of the consumer. You supply-siders still don't understand the difference between a recession caused by shortage of products, and a recession caused by lack of demand for good and services. We're in a demand recession, so we must stimulate demand to stimulate the economy.

PS It's Republican economi... (Below threshold)

PS It's Republican economic policy that got us into this mess. 8 years of borrow and spend have taken their toll. The last president who had a decline in the growth of national debt was a Democrat.

"As Rush Limbaugh correctly... (Below threshold)
sherlhlms:

"As Rush Limbaugh correctly pointed out, even the $1 million Merrill Lynch extreme makeover* put money into the pockets of interior designers, furniture manufacturers, and precious blue collar transportation and construction workers. Further, how many pilots, maintenance personnel, and facilities workers lost contracts or jobs because CitiGroup won't be buying that jet?"
That arguement is absurd, if the whole point is to put money into pockets of interior designers and pilots, how about give me 25 trillions and I'll decorate my house and spend money to buy a new airplane, that would serve the same purpose right? Also, yes pork is bad and Obama spend too much money on party, so what?!! Limiting CEO pay for bad performance is a good start and just because we can't fix all our problems doesn't mean we shouldn't fix anything at all.

It would be nice if some of... (Below threshold)
Dean:

It would be nice if some of the people who post here actually understood economics, or at least the difference between gratuitous spending and actual investment.

Wall street executives are entitled to whatever bonuses they like, as long as it comes out of the profits generated by their performance. But taking a bonus out of taxpayer dollars for failing to do their job and needing assistance from the government is outrageous.

Much of the planned Federal spending is actually long term investment. If the government buys more fuel efficient cars and upgrades buildings to higher energy standards, they will SAVE money in the long run. If they invest in STD testing, birth control and smoking cessation, they will reduce long term health care costs, and again, SAVE money.

The comment that the original poster made parroting Rush Limbaugh regarding the jobs made available to the interior decorators of one office at Merrill Lynch is naive beyond imagination. It ignores the fact that if Merrill Lynch had simply spent a few billion less on an already priveleged few, they could have kept a lot of the people they fired on their payroll, and all of them together would have been able to hire a lot more designers, manufacturers and construction workers than ONE executive can. Get real, folks, and stop listening to multi-millionaire talk show hosts who really just tell you what's best for themselves, wrapped up in some spin that you obviously can't see through.

I read this article and I f... (Below threshold)
Daniel:

I read this article and I found it quite entertaining. Correct me if I'm wrong and I don't mean to sound naiive, but I don't think anybody truly knows the definition of PORK. Last time I checked, which was a few seconds ago to make sure I'm right so as not to make myself look like an idiot, PORK [BARREL] legislation was legislation passed for political and personal gain rather than for the public good which is what the government is supposed to keep in check. Sorry if I've mistaken that the billions of dollars that Obama wants to spend on our crumbling infrastructure, education system, healthcare system, etc. etc. is for the public good. I didn't realize spending all that money on things that could be beneficial to our country as a whole was so selfish. Even if it all this ultimately IS for political kudos on the part of the Democrats I still don't see why somebody's personal gain can't also be a good thing for the public as a whole. I'm not at all denying that excessive amounts of spending is rampant in our federal, state, and local governments and that pork is a real problem, but I think in this case this particular ham is big enough for everyone to get a piece.

I want to post another comm... (Below threshold)
Daniel:

I want to post another comment because I just read the comment above mine and I want to applaud that person for realizing the difference between excessive spending on Wallstreet and excessive spending on Capitol Hill. Also I want to clarify what I had said earlier and let it be known that I am totally appalled by the big spending of the executives and CEOs of these supposed "failing" companies and I don't view their spending as being beneficial to the public at all.

One trillion dollars amount... (Below threshold)

One trillion dollars amounts to 54 bonuses of $18.4 billion. That's one for each state, Guam, Puerto Rico, American Samoa and the U.S. Virgin Islands. Spare me the faux outrage Fauxbama, you arugula eater!
http://www.rightklik.net/

No one on wall street deser... (Below threshold)
Patrick Neptune:

No one on wall street deserves a bonus. We want our Money BACK. We don't neeed banks. Put your money in Credit Unions.

No one know if TARP mon... (Below threshold)
hcddbz:

No one know if TARP money was spent on these Bonus payments
NY state reported on the Bonus money from the TAX money they colleted at state and city level which means Federal Taxes were collected on this money. So a % of the Bonus money was already collected by Washington.

If people do not like the way that the investment banks do business then they should have thought about that before TARP.

This is all political theater to get one thing done that is to have federal control over pay.

This is why the government should have let these firms find their own bottom.

Now every act like spending 1 million dollars 8 months before TARP occurred will be linked to it.

Pork is
4B for Community Redevelopment aka ACRON,
Money to support Abortion Groups
Money for Green Energy
It all to pay back groups that supported BHO.

Terry Kelley, you really ar... (Below threshold)
SPQR:

Terry Kelley, you really are quite wrong, the current recession has nothing to do with the amount of deficit spending by the government. There is no way to conclude that such was the cause of the financial crisis except by completely ignoring the events of the past year.

But if you were correct, then you have only made the case even more stronger that Obama's faux "stimulus" program is the exact wrong thing to do.




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