Bank execs get bailout bucks
Banks have been at the top of the list for taxpayer funded bailout money, and what did those banks do with their newfound cash stream? You might be shocked. According to an AP story on Yahoo News, $1.6 billion of the funds went to ‘salaries, bonuses and other benefits’ for top executives. Last time I looked, the money was meant to restore consumer lending to pre-crisis levels.
According to the AP study, the cash we towards; ‘cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management.’
I have nothing against pay for performance, but many of these banks were failing and the bosses were getting big paydays despite dismal performance. On principle, this would be bad enough, but toss taxpayer money into the mix and you have a real reason to complain.
A return to the auto bailout – part deux
When this blog left off in early December, the American car company bailout was in the headlines. It still is. Some progress has been made, despite some disagreement in Congress. The current ‘bridge-loan’ offered by president Bush will give the automakers a brief reprieve. The writing on the wall is there though. The Detroit car companies have to get their acts together. High labor costs and gas guzzling cars just won’t cut it. Wage concessions and reengineering are both in order to satisfy the administration, as well as the new occupants of the White House.
In the meantime, labor is crying foul, as the government loan money comes with strings attached. The UAW claims that their membership should not have to sacrifice too much. The growing problems with GM, Ford and Chrysler have been mounting for at least three decades and any quick fix is going to require a miracle. Many in Congress have suggested Chapter 11 as the preferable course of action, since the bridge-loan is just that; short term by definition. The automakers need permanent reorganization.
