Wall Street compensation

I don't know how I feel about bonuses. Especially for low to mid-level employees I don't like them being such a huge part of their annual income. You obviously have a different pension and healthcare system than us but over here bonuses almost never figure into your pension. For example if you make 40k a year on salary and another 20k on bonus come retirement your pension will only be analogous to your salary not your whole income.

As for the top level people make the bonuses transparent and directly tied to the company's performance and health. Even give them every three years after an actual evaluation. Is the company better than it was three years before? Have a bonus. Is it worse? Fuck you. And the situation being what it is now, the top level guys, the decision makers, really don't deserve anything.

I don't think this will work ultimately. The best fix would be to roll back the Reagan tax cuts. If the top marginal tax was 74% there wouldn't be the kind of excess and dynastic accumulation that we're seeing these days. It would bring back the middle class and end our journey toward serfdom at the hands of greedy plutocrats.

Considering we're seeing what happens to our economy when wealth is concentrated in the upper 1%, why is that such an outlandish comment?

Considering the disproportionate usage of the commons by the wealthiest in terms of our banking system and all the services used by those who make them wealthy, yes. Also, we're not talking about earned income salaries -- we're talking about money they are making with their money and assets.

What's the top marginal tax rate in most of Europe, Taiwan, South Korea, Japan, etc., The Closer? What was it in the USA between Roosevelt and Reagan? And prior to downward spiral that heralded the beginning of the previous great depresion?

And on the other side of things, how does the economy do when there's a healthy middle class? It's better for our country.

Besides: the Founders put our country together to prevent the dynastic plutocracies they were running away from. That's what we have today, and one of the reasons is because the rich have the ability to create powerful dynasties that have hopelessly rigged the system to engender permanent serfdom for everyone else. The heart of "conservative" ideologies is that there's an anointed few who deserve the right to control things and that democracy is "mob rule." The great swindle is that idiots like Joe the Plumber think they're included in that equation.

True, but I'd argue that Clinton's economy wasn't sustainable. It was based around the internet bubble and increased spending on IT projects. The pieces of legislation you mentioned did help, but without the runaway spending in the IT sector, I don't think we'd have the same growth during the Clinton years.

What we need is sustainable growth in our economy and a strong middle class. That can't happen when there is no significant wealth creation.

stelios, most of us over here don't have pension plans. Pension plans are a dying breed of retirement planning in the states. While many large corporations do still have them (especially those with Unions and the Government) they are often frozen to older employee groups. Very few, non-Union companies offer them to their new and younger workforce. Instead, people are either fully dependent on Social Security(God help you), have a 401k or IRA plan (which the market crash decimated), a regular Savings Plan or a combination of these. So bonuses have little impact on Pension plans.

Many US companies are pushing for more bonus based plans. The reason is because they can then give more money for results as these are often called "results based plans" and give more money to less people. If you reward via bonus based on results (which should ideally be aligned with tangible and measurable items like income, revenue, cost savings, etc. to be effective and accurate) then you can give more money to the superstars and less to the mediocre employees. And while it sounds mean when you plot folks out on graph employees fall in a bell curve type picture with most people in the middle. And why should the guy/gal just showing up for work and doing a meh job get the same bonus as someone working like a dog with a passion who gets results? The answer is they shouldn't....well, at least they shouldn't in the America I love.

As for the on-topic thread, I have no issue with what Obama is doing. If your firm is begging for help from the govt then you damn well don't deserve to make a bonus since your overall revenue is crap. I believe Obama's plan allows this clause to go away once the loans are paid off. Sounds fair to me. But I agree with the Closer, unfortunately many idiots who don't understand the concept of bonus plans will just yap about shit they don't know because it attacks the "evil" money makers.

How do they reinvest it into the economy? Does their investment do anything but create bubble economies? Does it create a single job?

Please don't start with corporate tax rates again. We both know that corporations have loopholes that allow them to pay nothing or next to nothing.

I know it's unlikely that Obama will roll back the Reagan tax cuts, but I could live with a top marginal tax rate of 50%, like France. Higher tax rates DOES cause more investment in businesses because it's not as easy to pull the money out for high stakes gambles and extravagances.

Check out this interesting chart I found on the internets:



Did you really just say "unfairly targeting the wealthy?" I'm not talking about unfairly targeting the wealthy, more about taking the working and middle classes out of the crosshairs.

What do you make of the fact that the top legislative priority of the CEOs is to crush unions? This is what they're spending all that extra cash on - BofA, recipient of TARP funds, sponsored that conference call. They're spending billions on lobbyists. This is how so much excess at the top distorts and corrodes democracy.

Um, present company excepted and all, but what do you call the deceptive and corrupt shadow economy that exploded around CDOs and CDSs and the collusion that went into obscuring it from view? And the feckless regulation that enabled it. And the lack of backbone in the SEC? Did you watch the hearings on Madoff? This is a sewer of iniquity. It's not your fault, or the fault of the footsoldiers you're probably referencing, but I wouldn't complain too loudly if I were you because there was malfeasance, excess and eye-watering corruption, and there will be investigations, and when this cycle is complete, history will not be kind to the greedmongering that dragged the entire world to its knees.

I didn't see anyone crying when everyone was rolling in wads of cash. The entire industry failed, The Closer. It's going to be very difficult to garner any sympathy for your cause when most people don't understand how it happened and all they see are the same people they perceived as having robbed them now taking luxury junkets, paying themselves billions in bonuses, lavishing money on lobbyists and buying corporate jets. I agree that capping executive compensation is a largely symbolic bandaid, but the excess in the banking industry is putting Obama in an untenable position. I think the top marginal tax rate should go up. Whether it will or not is anyone's guess, but it should.

Seriously, we're talking about people making over, what, $3.2m a year? Seriously.

Dems don't have a problem raising taxes, because they don't bother to pay them. You rail against the loopholes that your own team uses.

As to them not creating jobs, when they buy products, or go on these "lavish" junkets, they are paying people in those industries for services and products.

I know people in these tax brackets, and when they spend their earned money to do things like build their houses, or condos to sell, or other projects that they start, they are creating jobs. Thousands of jobs that pay decent wages to hard working middle class people. I'm one of those people and the richer people are going to be in a far better position to hire people like me and to create opportunities for others.

The idea of taking 75% of their wealth because you don't think they deserve it, or have earned it, is just wrong headed. For every person you sight that came by their wealth in so-called nefarious ways there is a person who has built it from next to nothing. You rail against the wealthy, yet the darling Dem Kennedys and tons of others are just as wealthy, if not more, than their Republican counterparts.

Okay, you're acting like a fucking idiot. Drop that bullshit GOP speak/culture war nonsense and actually discuss this issue.

At a time where the entire world is in trouble because the actions of a few handfuls of people went unchecked, I find it irrational to want to remove even more checks from the system.

I don't know how it is in the US but as far as I know knowing the right people is as much if not more important than one's actual merit when it comes to really high levels of management.

Not regarding the present crisis. But they can make sure that the current situation will not be used as an excuse to roll-back rights that have been achieved all these decades. And even philosophically speaking it's good having someone to bust your balls from time to time. Keeps you from feeling too much like the king of the world.

Nonsense, yet true. And I'm not the robot that you guys are.

Wrong. It's totally independent. If you can prove this, I'll accept it, but I totally reject it.

In the market, sure. But it stops there.

Really? Because it looks to me like they either find more ways to increase their stock price -- like outsourcing jobs to third world countries or importing cheaper workers through special visas (your industry is currently applying for 20,000 such work visas) to increase profitability and the stock price and give themselves another round of bonuses for doing so.

I totally reject that this idea that stock price drives the robustness of the economy.

Demand drives the robustness of the economy. And demand is created by the middle and working classes. And when the middle and working classes have been screwed six ways to sunday by the ruling class, demand goes away and the economy goes into freefall. That's where we are now, and that's why.

As I've noticed recently, when a stock rises, the company lays off employees also.

I'm totally for lowering the rate if the loopholes are going to be closed, like JFK did during his presidency on income taxes. But I wouldn't lower it to miniscule levels. Why should corporations be coddled more than salaried workers?

Maybe it's me, but when Reagan dropped the top marginal tax rate on from 76% to 27% (on people making over $3.2 million) and doubled the FICO tax on the middle and working classes, then raised taxes on the middle class every year of his presidency, followed by Bush I who did the same, and Bush II who made it far worse, is unfairly targeting the middle and working classes.

These presidents who lower taxes on their rich buddies are not actually lowering taxes, they're migrating those costs to the poor and to future generations. Period.

I'm for finding middle ground, but you have to quit it with the "unfairly targeting the rich" argument. Wall Street has been a Wild West for too long and there is a new sheriff in town. The balance has to shift. If it doesn't and we slide into a Depression, the rich will be just fine and ride it out. It'll be people like us who will have to fight for roadkill to feed our children, because once the government is bankrupted, no more safety net, no more social services. Ta da! A "conservative's" dream.

Oh really? So everyone in this forum -- none of whom I'm assuming is a millionaire or billionaire -- has equal power as a corporation? Interesting idea, but totally false. Our only power as individuals is when we band together. That's the function of unions. Without a union, we might as well be living in China or Russia -- again, these CEOs are trying to create a two class system of the very rich versus the working serfs right here in the US and A.

Judging from the billions that corporations lavish on lobbyists and politicians, I think you're dead wrong here. Money corrupts democracy to the degree that you have a totally lopsided legislative body only paying attention to the concerns of the rich and the corporations.

No, but the financial services industry convinced the legislators to let them regulate themselves. They stole billions of dollars and racked up a bubble in the CDO/CDS world that's three times the US GDP, and then -- because people's life savings and retirement were tied up in these octopus conglomerates and they were "too big to fail" -- the tax payers had to borrow from future generations to bail them out. You were part of an industry that assured everyone it could regulate itself and then let the thieves take over. All of this could have been stopped before it melted down but no one in your industry lifted a finger to make a correction, and now the entire world might go down with the ship.

Wrong again. They're not stupid, but the corporate media has a vested interest in them not understanding the seedier and more underhanded side of corporate greed.

This is a much longer conversation and all I can say to you with that kind of attitude is, "Go with God."

In five years time there could be Americans who have to watch their children starve to death. It's hard for me to feel sympathy for you. We have seen an economy that lets people like you make your millions while everyone else can earn what Teddy Roosevelt called a "living wage," but greed among the nation's richest found ways to destroy that and now we dangerously close to a very scary edge.

Your continuing rationalizations for this kind of conservative republican ideology, for one thing. As for the hundreds of thousands of others in your position, I hope they are starting to see the writing on the wall.

What you wrote is complete bullshit and doesn't suggest any independent thought on any matter. But never mind that...what did El Rushbo tell you guys to say today?

Electrichead, I have no idea what you're saying. You mean, rich people hire you therefore they should pay fewer taxes than you do? You realize I'm talking about people making over $3.2 million a year, right? The people hiring you are probably not even the people I'm talking about. The people hiring you are probably more in the upper middle class, and they're also a disadvantage compared to the uber-rich.

74% is what the richest Americans (again, those making over $3.2 million a year) paid between JFK and Reagan. Before that, they paid 91% between Roosevelt and JFK. The US economy was incredibly strong during those years - we were more of a world power, a creditor nation rather than a debtor nation like we are now. Our country was modernized and fully functioning. Now, it's degraded and falling apart. It's a national security issue as much as it is an economics issue. Just shut off Limbaugh or whoever you're listening to and read about the history of this stuff.

And you get to tend the rabbits, Lenny.

So, leveling the tax code to not punish the middle and working classes is class warfare, but slicing the top marginal tax rate by 2/3rds and enacting the largest tax hike in history on the middle class isn't, right?

Unfortunately, you're right on this one. But I'm hoping that changes. FDR entered office as a fiscal conservative, and when faced with the Depression, he changed course to save the country.

You're going to hurt yourself if you keep doing that.

Defensive much? No, that's not what I'm getting at, but arguing the nuances of our difference of opinion is like arguing the abortion debate. There will never be agreement between us, so I'm not even going to lob an opening salvo.


Your response and cutting of my original post leads me to believe you missed the point I was making, so here it is again:

You mean back when I was saying the smart money was in treasury and you were defending the market? Just kidding. Good for you.

I think we go around and around on this because our perspectives on the economy are diametrically opposed and will never meet. I try not to vent on you because I respect you for articulating that point of view, but nothing you've posted has moved my bull$#!& meter out of the red, not because I don't think you're being genuine but because I think that worldview in general is full of $#!& and has been deeply destructive to this country.

I am not against people making a good living at their chosen profession, but I do grow frustrated with cynical egocentricism in social policy. We are all in this together, and as the quality of life among the many is destroyed, it will ultimately affect the few, just not right away. My stake in it is I get sickened when people who are vulnerable and weak are exploited or mistreated by those with power, and that's what I am seeing and reacting to.

I think society, probably as a product of its size and the resulting sea of money, tends to overcompensate for certain products and skills. I thinks it's as natural in large capitalist economies as recessions. Professional athletes are a prime example of this. It ought to be the place of government to help fix that overcompensation via tax.

The people that I have worked for are worth in the neighborhood of $600 million plus. I would suspect that they are wealthy.

I am not saying that they should pay less taxes. I am saying that they should not be excessively taxed. What I am saying is that people with this money spend it. They build things, they buy cars, they hire people to do things in their businesses. That's what I am saying. You propose that they just horde their money and don't do anything with it. I am suggesting that they do, and they inject it into the local economies of where they live and have their businesses.

I wish you guys would stop painting me as a Rushbo freak. That guy is as much of a nutjob as the people you guys slather over. I don't like Bush or any of the people that have been around. I really don't like or trust any politician, I am just disagreeing with your notions of taxing the rich over and above just because they have the money and your opinion is that they don't deserve. I am just stating that your team has had a hand in a lot of the crap that is gone down here, and they are as of yet just attempting to pile more debt on.

It's complete bullshit, yet it's all over the news about how they didn't pay their taxes. They lost cabinet posts because of it, yet it's made up bullshit. They admitted to it, yet it's made up bullshit.

It's bullshit because it's a tempest in a teapot. Yeah, Daschle's a prick, but Geithner made and honest mistake. It happens. That's why we audit. And besides, considering the people making the biggest stink of this hate taxes, I don't see why they're bitching about it. They're just trying to make political points without actually coming up with an agenda. It's fucking stupid, it's fucking immature, and it's not what we fucking need right now.

If you want to get zealous about tax compliance, let's talk about the corporations that pay no tax (roughly the first two corporate tax quintiles), or shutting down the "sandy beach" jurisdictions that allow companies like Microsoft to avoid paying any tax on their dividends. Or how about actually fully funding the IRS so real audits can occur (less than 1% of all personal returns are audited and corporate returns are even less).

It's hypocritical bullshit. Considering the last eight years, you'll have to excuse me if I don't take GOP hand-wringing over responsible governing seriously.

The Closer, I'm talking about the top marginal income tax -- the tax that kicks in AFTER an individual has made over $3.2 million dollars. Progressive taxation. Whether you want to debate where that should be between 50% and 74%, or whether the cap should be raised, or if you think 1/10th of 1% deserve their convoy of yachts filled with Bulgarian hookers and Prada eyewear, that's ideological and we can have that debate.

What is not a question of opinion but of fact is what happens when that top marginal tax is slashed. Historically, those excess millions are NOT pumped back into the economy, but pumped into the casino of Wall Street, creating a boom, a bust and crash. It happened when Pres. Harding did it, and it's happening now as a consequence of Reagan doing it. They also use those excesses to assert their agenda in the political and social spectrum. Hence the boom in lobbyists over the course of the Bush administration and steep acceleration of campaign financing from the private sector.

What you're talking about is whether or not a tiny percentage of the population should have a "right" to gain riches beyond anyone's most sugar-fueled fantasies, no matter the consequences for the rest of the country. What I am talking about is that a middle class is not a natural function of capitalism. It has to be nurtured, but as our history shows, having a strong, healthy middle class translates into national security, health, quality of life, innovation in education, and prosperity for the many, as opposed to the few. The next manufacturing boom is going to be in new areas of technology -- nanotechnology, robotics, etc. We will NOT be the leader in those industries without VAST improvements in our education and the food security of every child.

I'm talking about restoring America to the state at which someone can stick his feet in the dirt and point the moon and say, "We're going there." Those days are gone -- sacrificed at the altar of the very, very rich. The ONLY way to get some modicum of a middle class again is to raise the top marginal income tax.

Who do you work for, if you don't mind me asking? Kauffman & Broad?

I disagree. Your employer's excess $600 million is not going back into the country. Just look at the statistics in terms of jobs lost over the past 8 years. I will post those shortly and in fact, the figures prove we're sliding toward a Depression as we speak. No, what your employers do with that money is invest in the casino of Wall Street. This is why the CDO debacle is now in the thousands of trillions. Again, the facts bear this out.

Statistics show that the middle and working classes drive consumer spending, which is 80% of the GNP.

I'm sorry, Electrichead, but this just isn't true.

The debt that "my team" is piling on is NOTHING compared to the suffering that's coming our way, trust me. What Obama is trying to spend is a drop in the &^%$&* bucket. And yeah, the spineless and the "centrist" Democrats in Congress are a disaster, but still less myopic than Republicans.

And if you don't listen to Limbaugh/Hannity/Glenn Beck, where do you get your news? Because I've got some suggestions.

For the record, the term "casino of Wall Street" makes me cringe every time you use it, yt. It sounds like it's pulled from the same family of talking points that the GOP likes to trot out -- just different ideologically.

LOL. so noted.

Bonuses == bribes???

I think it's a very relevant question, but it ignores the tax realities of executive compensation.

The reality is that it doesn't really make sense at all to view bonuses as bribes. You can argue all you want about excessive bonuses, etc., but at the end of the day they are a common mechanism to reward employees at every level.

It almost makes it sound like Frank hasn't worked a single day at a non-government job for him to misrepresent something like this so badly.

http://www.msnbc.msn.com/id/29137662

Merrill Madness.

I think we all know by now he'd label it 'stimulus'.

These deck chairs are out of order! Fire whoever's responsible for this. This is the Titanic -- we can't have sloppy deck chairs!

yt, actually, you've described exactly what B. Franks is engaging on. Thanks.