Topic: Disposession of Wealth
- 9 Wall Street Execs Who Cashed In on the Crisis, Mother Jones
Despite engineering the financial crisis and being bailed out by the government, Wall Street executives continued to receive massive bonuses and failed to discover a change in attitude.
Great charts comparing bailout amounts to executives’ personal gains.
“[The autumn 2009 pay cap] capped salaries for only 25 executives, kept big stock bonuses in place, and did nothing to address the culture of rewarding folks who sowed our economic destruction.”
“Vikram Pandit, Citigroup CEO, 2007-present: Ordered a $50 million private jet, announced huge layoffs, and jacked up credit card APRs—after getting bailed out. His haul in 2008: $10.8 million”
2. How Wall Street’s Bankers Stayed Out of Jail, The Atlantic
Bankers were not arrested for a myriad of logistical reasons, including statues of limitations, and acting recklessly, while not technically illegally. At the end of the day, most justice efforts ended in settlements.
“In early 2014, just weeks after Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department, the bank’s board of directors gave him a 74 percent raise, bringing his salary to $20 million.”
One banker was jailed after the 2007 crisis (Kareem Serageldin). In the 1980’s, over 1,000 bankers were jailed after a crisis.
What happened for most Wall Street Banks: “Threaten public disclosure of behavior that looks criminal and then, in exchange for keeping it sealed, extract a huge financial settlement. No one individual, or group of individuals, is held accountable. No predawn raids of Park Avenue apartments are made. No one gets arrested. No one gets publicly shamed.”
“Instead a very different message is being sent: for financiers, justice is just a check someone else has to write.”
3. Bankers Reaped Lavish Bonuses During Bailouts, New York Times
Wall Street banks traditionally operate by rewarding valued employees with bonuses, rather than paying all employees according the success of the firm. This trend did not change during the financial crisis, and individuals continued to receive inappropriate bonuses while the institutions were being bailed out by the government.
“…that compensation for every employee in a financial firm should rise and fall in line with the company’s overall results — is not shared on Wall Street, which tends to reward employees based more on their individual performance.”
“…’If the bank lost money, where do you get the money to pay the bonus?’ he said. All the banks named in the report declined to comment.”
”Incentives that led to large bonuses on Wall Street are often cited as a cause of the financial crisis.”
“The report suggests that those roughly 5,000 people — a small subset of the industry — accounted for more than $5 billion in bonuses.”
“All told, the bonus pools at the nine banks that received bailout money was $32.6 billion, while those banks lost $81 billion.”
Despite engineering the financial crisis, individuals on Wall Street were rewarded with huge bonuses and avoided arrest. While explanations for this can be found within the complex justice system, it still reflects the inappropriate and reckless norms prevelant on Wall Street.