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Banks Plan Record Bonuses as Bloomberg Slams Obama's Tax
By
John Del Signore
Published Jan 15, 2010
Modified Jan 15, 2010
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By
John Del Signore
Published Jan 15, 2010
Modified Jan 15, 2010
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Today JPMorgan Chase is reporting that last year it doubled its profits over 2008, earning $11.7 billion, and generated record revenue, hauling in $3.3 billion in the fourth quarter alone. It's also reporting that it's earmarking $26.9 billion to compensate its workers, much of which will now be paid out as bonuses. You're welcome, America! The news comes as a Wall Street Journal analysis found that major U.S. banks and securities firms are on pace to pay their top employees a record sum, about $145 billion for 2009, nearly 18% more than they did in 2008—and slightly more than in the record year of 2007. But mean old President Obama wants to take that hard schemed earned money away, and that makes Bloomberg scared!
Yesterday Obama announced his proposal for a new tax on the nation’s largest financial institutions, intended "to recover every single dime the American people are owed" for bailing out the economy. The tax would apply to bank, thrift and insurance companies with more than $50 billion in assets, and would raise an estimated $90 billion over 10 years to cover projected bailout losses in the neighborhood of $117 billion. Many of these banks gripe that they've already repaid the government with interest, but Obama's describing the tax as a "financial crisis responsibility fee" aimed at those institutions whose risk-taking caused the collapse. The President brought his populist thunderbolts to yesterday's presser:
We want our money back, and we're going to get it. We’re already hearing a hue and cry from Wall Street suggesting that this proposed fee is not only unwelcome but unfair. That by some twisted logic it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses.
What I say to these executives is this: Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities.
Speaking of "responsibility," Philip Gourevitch made this modest proposal in The New Yorker: "Goldman Sachs and JPMorgan Chase should give a billion dollars apiece to Haiti relief and reconstruction efforts—and they should do it swiftly and without hesitation. They should do it today, before they start cutting bonus checks." Yeah, we're sure they'll get right on that. And yesterday Bloomberg countered Obama's populist fury with alarmist prognosticating.
Speaking to reporters, Bloomberg predicted that Obama's proposal would cut off the financial sector at the knees and create a dire ripple effect throughout the city's economy. "The way we pay our cops, firefighters and everybody else in the city is from tax revenues. [NYC] is dependent on the major industry here. When it does well, that's how we build up money to carry us through the bad times... And if you want to see what happens to a city when their major industry fails, just take a look at Detroit." Oh, somebody's going to owe Dave Bing an apology at the next mayors' retreat!
Tagged
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bloomberg
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nyc
obama
tax
wall street
John Del Signore
Originally from the Albany area, John Del Signore has called NYC home since 1995. In addition to his thousands of meticulously-crafted bespoke blog posts for Gothamist, his writing has also been published in The Awl, Deadspin, The Nervous Breakdown, and performed at The Brick Theater in Brooklyn.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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