Curious about what’s been happening to the money you loaned to all of those big financial institutions? Today’s Washington Post contains a story entitled “Waxman Seeks Bank Data on Use of Bailout Funds” that should engender justified indignation.
One of the keys to the story is revealed in the paragraph that indirectly quotes banking industry officials justifying the paying of bonuses. These unidentified officials note “that bonuses are a normal part of compensation packages. The fact that the allocations on compensation so far in 2008 are identical to last year suggests that the bailout money will be not used to boost bonuses.”
Wait a minute: The bailout funds “will not be used to boost bonuses,” but they will be used to pay bonuses at the same rate as the year previous? Did I understand that correctly? It’s been a disastrous year for banks, but they’re still paying bonuses at last year’s rate? Why are they paying bonuses at all? And banking institutions “fully intend to use the money to start making loans”? Right, they’re not going to hoard it; they’re only using it as a “substantial cushion against the adverse effects of the weakening economy,” as the last line of the story reveals. In other words, taxpayers have forked over hundreds of billions of dollars to pay bonuses at last year’s rate, as if bonuses should be paid at all, and to provide cushions against a failing economy. Lord, it is fun to be taken to the cleaners, isn’t it?
As emseyb, I wrote a slightly different version of this post in the comment section to the article at the Washington Post.
Image (modified) of Congressman Waxman by Bridgette Blair in Public Citizen’s photostream at Flickr and used under Creative Commons license.
Posted by soberingnews 
