Record pay on Wall Street as unemployment rises

by desmoinesdem, Wed Oct 14, 2009 at 07:18:21 AM EDT

Americans won't be happy to learn that Wall Street salaries may be higher this year than they were before the current recession began:

Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture.

Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal.

Ian Welsh wrote a depressing post at Open Left yesterday:

All they did was throw cash at the problem, without dealing with the underlying issues, which is why they didn't manage (as Jerome points out) to kickstart ANY net private spending.  They didn't break up major banks.  They didn't allow bankruptcy judges to rewrite mortgages.  Their mortgage program kept hardly anyone in the house.  And their money for financial firms did not increase lending by one cent. [...]

This is going to be the wost "recovery" of your lifetime, unless you're in the financial sector at a relatively high level.  Bank profits have recovered but ordinary people are not, in a generation, going to see a full recovery from this clusterfuck - employment will not recover to pre-recession levels before the next recession, and I don't expect it to recover after that recession either.

At this point, in fact, I am expecting this to turn into a double dip recession--this "recovery" will not have any significant legs.

Continuing George Bush's Wall Street bailout policy will prove to be a costly mistake for President Obama. Watch the Huffington Post Investigative Fund's interview with Neil Barofsky, who "monitors a dozen separate bailout-related programs that now account for nearly $3 trillion in financial commitments." Among other things, his research has confirmed that the bailout did not increase lending to the business sector.

Tags: bailout, Economic Policy, Economy, financial sector, Wall Street Bailout (all tags)

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7 Comments

Shadow_head_small
Re: Record pay on Wall Street as unemployment rise

They allowed Geithner and Bernanke to continue to lead the charge. Its akin to leaving the wolves in charge of the livestock. These two gusy are so entrenched in the financial industry its absurd to think they had anyone else at heart....

by BuckeyeBlogger 2009-10-14 07:46AM | 0 recs
4a2fab88-ed3b-47a4-8f14-3ec8a24504ac_normal
Re: Record pay on Wall Street

"Continuing George Bush's Wall Street bailout policy will prove to be a costly mistake for President Obama."

I don't know that Bush should get that much credit here, Obama was happy to be the face of persuasion for the bailout the first time around too, in the Fall of 2008-- he even got McCain to buckle for it.

by Jerome Armstrong 2009-10-14 08:37AM | 0 recs
97250_45
Re: Record pay

Are there any lawyers in the house? What recourse exists in current law that could set, alter or rescind the pay of these bastards? If none exists, then I suggest that that Obama BREAK the law and have them arrested and there assets seized.

Just to please me.

by QTG 2009-10-14 09:10AM | 0 recs
Partido verde
Well

To a degree it's a natural consequence of the consolidation that has taken place in the industry. I-banking has very high gross margins and deals are still getting done but there are fewer banks, not to mention that it has long been primarily a two player industry. So all that cash ends up in fewer hands. And the assets of any i-bank are their employees so all that cash gets paid out at the end of the year.

Again, I'd make the case for higher taxes and the return to Glass-Steagall. I also think that derivatives need to be regulated. The 'financialization' of the economy has been very good to a select few, but for the nation at large, not so much.

by Charles Lemos 2009-10-14 09:18AM | 0 recs
Shadow_head_small
Re: (predicted) Record pay

How does this speculation pass as news? (talking about the WSJ..Completely familiar about speculation and use of unnamed sources as grist here on MyDD)

by lojasmo 2009-10-14 10:30AM | 0 recs
Shadow_head_small
Re: Record pay on Wall Street as unemployment rise

The issue of executive pay has come up several times in the last few months, and from what is coming out of Washington, there does not seem like there will be the policies coming out that will  address it. I remember the prior skirmish over executive pay with Geithner, and his attempts to limit the impact of any legislative attempts to regulate the issue.  There are proposals here and there, but nothing so far is sticking. The mainstream of Democratic thought remains neoliberal. Thus, issues of income inequality while considered important are clearly not prioritized or are addressed through the belief that if you rise the tide, it will rise for everyone rather than a few.  

by bruh3 2009-10-14 02:13PM | 0 recs
Shadow_head_small
Re: Record pay on Wall Street as unemployment

I work for a major recipient of TARP funds.  Here's the order of events:

**Tarp funds received under Paulsen
*Geithner/Obama mention capping executive bonuses
*Company announces intention of repaying TARP funds
*Company chops bonuses and incentives for all non-contractual employees to repay TARP funds
**Contracted Executives see no decrease in their bonus structure.

by SuperCameron 2009-10-14 07:11PM | 0 recs

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