Crime of the Century Tribute - Artist: kreesor
Written by Chris Floyd
|Readers of The Guardian were greeted with this leading story -- front-page, up top -- on Saturday morning:|
Wall Street banks in $70bn staff payout
Pay and bonus deals equivalent to 10% of US government bail-out package
Having laid out the thrust of the story very plainly in the headline and sub-head, the paper then detailed the way that the Bush-Obama bailout (the most apt moniker for a scheme devised by the top echelons of the bipartisan elite) is yet another inside job by the Beltway bandits who move in and out of the revolving door between "public service" and vast feeding troughs of Cronytopia.
So while Americans looking at the nations's "leading newspaper," the New York Times, found a vast belching of psychobabble and personal gossip about Cindy McCain taking up the front page, the rest of the world was learning this:
Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.The Guardian errs a bit in that last sentence, of coure. Almost all of the "conditions" mentioned in connection with the bailout have no teeth whatsoever, no enforcement mechanism, no real penalities. They are more properly termed "suggestions," or rather, "PR exercises that we hope our Wall Street lords will deign to at least pretend to follow for a short time, until the heat is off."
But still, the meat of the story is solid indeed. And how did the British newspaper find out what America's "paper of record" -- and the countless media outlets that follow its lead -- seems not to know? By looking at publicly available documents and connecting the dots: journalism, in other words.
Pay plans for bankers have been disclosed in recent corporate statements. Pressure on the US firms to review preparations for annual bonuses increased yesterday when Germany's Deutsche Bank said many of its leading traders would join Josef Ackermann, its chief executive, in waiving millions of euros in annual payouts.The Guardian's perusal of the Big Banks' public paperwork reveal what has long been obvious to anyone with eyes: the massive bonuses to top execs and reckless traders have no connection whatsoever to the company's performance. Quite the opposite, in fact. As the paper notes in a particularly egregious example, the bonuses offered to Morgan Stanley's top dogs were greater than the entire stock market value of the entire company, after the firm's worth had been destroyed by, er, Morgan Stanley's top dogs.
The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed....Think of that: burning your company's $15 billion pile of cash down to a handful of ashes still gets you more than $6 billion in easy money.
The UK bailout plan is somewhat more rigorous: the government has actually forced a few top bank brass to resign, and has taken a controlling or substantial role in actually running several banks -- as opposed to the American plan, which consists largely of buying watered stock in a few big beasts while giving them the keys to the treasury to pay for their continuing bonus binges.
But this is not to say that the UK plan is not also a mug's game rigged for incestuous insiders. All the Nobel-wreathed claptrap about Gordon Brown as the "saviour" of the global economic system is the usual hero-worship from afar that so often afflicts Americans when it comes to the UK. (Look how Tony Blair swans around in the States, gathering honors, teaching at Yale, etc., when he hardly dares show his face in his own country.) The government's Financial Services Authority, the supposed watchdog over the British bailout, is stuffed with haughtily-titled insiders who come straight from the institutions they are supposed to be regulating -- and were themselves responsible in many cases for bringing on the crisis back when they were grazing in Cronytopia.
But, as always, the Brits are small fry when compared to the other half of the "special relationship." As the indispensible Pam Martens details in CounterPunch, the Bush-Obama bailout is an intensely incestuous insider's club made up of the very authors of the massive economic collapse. This includes -- most emphatically and no doubt deliberately -- the people appointed by Goldman Sachs gamester turned Treasury Secretary Henry Paulson to "represent taxpayer interests" in the gargantuan give-away:
...we learn from the U.S. Treasury web site that it has hired the law firm of Simpson, Thacher & Bartlett to represent our taxpayer interests going forward at a cost to us of $300,000 for six months work. But we’re not allowed to know their hourly wages; that information has been blacked out on the Treasury’s contract. Curiously, the Treasury has named in its contract the specific lawyers it wants to work for us. Two of those are Lee A. Meyerson and David Eisenberg. Mr. Meyerson has been a central player in facilitating the bank consolidations that have led to the present train wreck, including building JPMorgan Chase from the body parts of Chemical Bank, Chase Manhattan and Bank One.It is an unconscionable conflict, but as we know, "conscience" is not an operative concept on the commanding heights of Cronytopia.