Confidence
The classic refrain from Wall Street and the Republicans, in opposition to President Obama’s $500,000 cap on the salaries of those bank executives who have so failed in their jobs that they required billions of taxpayer money, is that 1) the market should determine the salaries; and 2) the best get paid the best.
Those two excuses are, of course, wrong. Banks were failing all last year, but the market did nothing to prevent those failed CEOs and executives from receiving hundreds of millions, if not billions, in bonuses that they did not earn. Indeed, some of the bonuses paid out had the feel of a literal robbery. And if these miserable failures in life did earn that money, if they were the best, then why are banks failing everywhere? Why did they need a federal bailout?
Logic is the enemy of Wall Street now, I suppose. It has always been the enemy of Republicans. But I digress.
His rotundness, Ric Struthers, the head of Bank of America’s credit card operation, was in Wilmington yesterday to talk about irony.
Yes, irony.
In his speech, Struthers hammered away at the need to get people back on the job — and sooner rather than later.
“I think the most important thing we have to do is get people back to work. Small business will be the foundation to getting people back to work,” he said. His remarks come at the same time Bank of America is moving forward with plans to cut 30,000 to 35,000 jobs over the next three years.
Beginning Monday, an unspecified number of Bank of America workers in Delaware were terminated, according to Betty Riess, spokeswoman for the company, which is the state’s largest financial services employer. The number was less than 100, according to someone close to the situation. The layoffs will be ongoing over a three-year period, Riess said.
“We need to get people back to work, but don’t pay attention to the people we are putting out of work. Yes. Yes. Small business is the key. Big business can do nothing. In fact, we are the problem. They must pick up the slack and put the people I just laid off back to work.”
There he was lecturing us about a lack of confidence, and how that lack of confidence feeds a negative cycle that has lowered Bank of America’s profits and share price, all the while he was laying off yet more people. Mr. Struthers, what the f*ck do you think feeds that lack of confidence, you prick? Job losses.
Confidence is the key to all the locks, Struthers said, quoting Penn State head football coach Joe Paterno.
“As a nation, more than anything else we do, we have to restore confidence among the American people. This may be a pretty tall order, but it is the single most important thing that can happen to get our country growing again,” Struthers said.
Consumer confidence now is so fragile that any negative news impacts the stock market — and the prices of bank stocks, Struthers said.
Let me ask you all something. If all that is needed for businesses and the economy to do well is confidence, they why are these horrid executives paid untold millions to do their job? We can bring in Richard Simmons and Stewart Smiley for much less, and whammo, we have ourselves some confidence.
It is widely agreed the bank executives did not earn the bonuses in the minds of every day Americans.
However, if these individuals have employment contracts the bonuses have to be honored.
That contract protection is crucial for all workers regardless of income or stature.
I need to cover my eyes because I know it is only a matter of time before I read here that Delaware Liberal has an irrational hatred of rich successful people.
The Bottom Line is that banks need to fail. The people who ran those banks need to be fired and the people who invest in those banks (whether they are governments or individuals) need to lose money.
Right now Ric Struthers and other fat cats are being incentivized to do the wrong thing. To keep throwing Hail Mary passes and buy crap like Countrywide and pretend that the assets are worth something.
However, if these individuals have employment contracts the bonuses have to be honored.
Mike, let me make this simple for you. If you crashed a plane would you still be flying with your airline?
Okay then.
Restoring confidence is a big part in economic recovery, which was the main reason I hoped a stimulus bill would pass with bipartisan support. If there was ever a time to project a united front, it is now.
The American people are taking their cues from their political and business leaders, and what they are hearing/seeing is only making matters worse. Why on earth would the average American invest their money in this economy? You’d have to be crazy.
As far as Struthers… what he’s really saying is “Someone save me!” How? “By doing what I say, and not what I do.”
My confidence in the banking system won’t be restored until we get the incompetents who ran it into the ground to leave. I’m serious. I think a monkey could have done a better job.
These bank executives don’t seem to understand the concept of pay for performance. I believe they think that because they worked really, really hard probably giving up their personal time that means they deserve high pay. It doesn’t mean that at all. They gambled with money that wasn’t their own and they lost. It’s time for them to let someone else give it a shot.
I don’t think we should honor any contracts with bank executives. We should treat them how they treated us with their credit cards. That is, we can change the contract any time we want to and they can’t do anything about it.
Why do banks need to fail?
“The Bottom Line is that banks need to fail. The people who ran those banks need to be fired and the people who invest in those banks (whether they are governments or individuals) need to lose money.”
This is an un-American statement. If a CEO fails, the board of directors and the proxy vote of the shareholders determine whether the CEO stays or remains.
The financial system fundamentals are strong. They need to be stronger with significant lending of the TARP invements. Banks should not be hoarding the TARP infusion, as this is in contrast to the premise of the TARP plan.
The banks alone did not create the quagmire we are in. This was create my gross negligence of Congress, bank executivites, the Fed, mortgage lenders, real estate agents, and consumers.
The U.S. economy is resilient and will recover. This is not an overnight sensation, and the so-called Recovery Plan (spending bill) will not do what the title of the bill says it will.
The CBO says the best course is to do nothing. By nothing, they mean, the banks and the financial system need to start lending, which will lead to business expansion and the creation of jobs. The banks have the money, all they need to do is lend.
I need to cover my eyes because I know it is only a matter of time before I read here that Delaware Liberal has an irrational hatred of rich successful people.
And this criticism will come from the same people who keep calling you a silver spoon baby or whatever today’s signifier of their discontents is.
Please.
No, saying the opposite of that is unAmerican.
Let’s try it:
Bottom line is that these banks cannot be allowed to fail. The people that ran those banks should be rewarded and the people that invest in those banks need to make money.
See?
We here at DelawareLiberal hate rich people, starting with Jason.
The CBO says the best course is to do nothing.
The CBO does not say this.
Period.
This piece of new wingnut idiocy comes from that bastion of economic analysis, The Washington Times. They cherry picked out two sentences to fashion up an entire story that somehow the CBO says it will fail. That would be wrong on every count.
The question is who will be holding onto the shitpile when we all agree that it is a shit pile and not a bunch of “troubled assets.”
It is shit. Worthless.
The sooner we stop throwing money at it and praying that it is not shit, the better off we’ll all be. That means some banks will fail. That means some investors will lose money.
That means bankers should be fired. In fact, I’m starting to warm up to the Chinese system.
Cassandra,
The reason I never respond to that silver spoon stuff is that it seriously cracks me up whenever I read it.
I swear to god I laugh my ass off at Hube when he trots that lame crap out. It is like getting a little present from Hube once in a while.
I don’t blame you for not responding. It cracks me up too — they fetishisize small business people unless they don’t like your politics.
Who could have known. 🙄
I think Hube’s point is that if you work in a family business, you have to be a Republican.
Maybe if these wizards keep making what they think they’re worth, they will fix the mess they created.
For more, see:
http://www.guardian.co.uk/commentisfree/cifamerica/2009/feb/05/obama-banks-executive-pay-cap
You go Tom! Hitting the big leagues.
Great piece, Tom!