Goldman Sachs et al. Sing “Don’t Worry, Be Happy”
By Mona
Michigan is my home state and has been for years; we have the highest unemployment rate in the country, at a time when people nation-wide are in fear that they might be receiving their last check and losing medical insurance coverage. My strapped state cut some Medicaid services several weeks ago, such as eye exams and dental care.
Ah, but our wise federal govt is is assisting the most desperate of all, my emphasis:
There was a time in this country when a company reporting a few billion in earnings could count its money while basking in polite, reverent applause.
That time ended Tuesday.
It was the morning that Goldman Sachs reported net income of $3.44 billion, a number that surprised even analysts who follow investment banking. JPMorgan Chase came two days later with news that it had earned $2.7 billion in the second quarter, even more than it earned in the same period last year, before the economy had a cardiac infarction..
Then on Friday, Citigroup and Bank of America — two of the great basket cases of the meltdown — reported outstanding numbers, too.
All of these companies were beneficiaries of gargantuan government bailouts, in assorted forms and varied sums, but if they assumed they’d hear bravos for prompt paybacks and quick turnarounds, they were in for a shock. At a time when so many people are struggling with foreclosures and are either unemployed or worried about losing a job, these earnings were bound to stir up some basic questions of fairness.
People I know who work for a Michigan office of the Social Security Administration tell me there has been a sharp uptick in disability applications, because desperate people are trying to turn that old high school football injury into a disability that doesn’t allow them to work. Of course, this is causing greater scrutiny of applications, and is bound to hurt those with true impairments. But on the other hand, it is hard to blame work-capable people for whom there simply are no jobs to be had for wanting trifles like, oh, income and health insurance.
But at least nice bonuses are going to Goldman Sachs employees, on our taxpayer dollars. And after all, regular ‘mericans are often “small enough to fail.”
Comment by Thoreau —
July 19, 2009 @ 7:12 pm
You know, I can think of plausible arguments for limiting both taxes and services, but when bailed-out millionaires and billionaires get record profits, all of those arguments go out the window, at least in the short term. There’s a powerful case to be made for a one-time windfall tax on the bailed-out to pay for social programs during the downturn.
Pingback by Max Keiser Destroys Goldman Sachs —
July 19, 2009 @ 9:17 pm
[...] Great Quarter For The Corporate Mob, Goldman Sachs bonuses, new push for “say on pay” bill, Goldman Sachs et al. Sing “Don’t Worry, Be Happy”, Too Big To Think About, Max Keiser Takes Offense to Goldman Sachs Story, Wall Street Meltdown [...]
Comment by dhex —
July 19, 2009 @ 9:31 pm
a cheery wave to those who accused bailout opponents of all manner of bad mojo. ‘ello!
Comment by Thoreau —
July 20, 2009 @ 12:54 am
Yeah, dhex, I seem to remember some people saying [note: This is not a swipe at anybody here] that bailout opponents were letting free market ideology get in the way of the good of the common man. I’m sure they’ll now explain that the profits earned by bailed-out bankers are an example of free market ideology in action.
Comment by joe from Lowell —
July 20, 2009 @ 10:02 am
As irritating as it is, preventing the financial sector from undergoing the sort of cascading failure that caused every depression in American history, including the Great Depression, really did need to be the top priority that fall and winter. There would have been a lot more people unemployed and a lot more strain on social service programs if the frozen credit markets and bank runs had taken hold.
I think Thoreau gets it right in the first comment – the proper policy position now is to look at payback. Ideally, this should go beyond just paying back the TARP funds as the recipients are able to make money again, but some additional consideration on behalf of the taxpayers.
Although I don’t expect that stance to take hold among most of those who opposed the TARP. That would socialism and class warfare.
Comment by joe from Lowell —
July 20, 2009 @ 10:39 am
Banks runs are bad for the common man. Thinking that a nationwide series of bank runs is preferable to a loan program is allowing free-market ideology to trump concern for the common man.
Comment by doubled —
July 20, 2009 @ 11:25 am
I’m sure they’ll now explain that the profits earned by bailed-out bankers are an example of free market ideology in action.
Shoveling millions of taxpayer money at a single industry is free market ideology? Creating winners and losers in the auto industry by forcing specific dealerships to close, while allowing Penske’s group to open new ones is free market. Allowing the auto unions to receive funds ahead of senior creditors is free market.
Takes quite a bit of self delusion to believe there is a free market in America (or anywhere else for that matter). Politicians aren’t about to let the ‘masses’ decide what works, or what to VALUE, only to see their campaign contributions from big biz to bastardize the ‘free market’ with special interest treatment dry up.
Comment by dhex —
July 20, 2009 @ 1:04 pm
i met the common man once. he was remarkably uncommon! i think his name was mr. mean.
I’m sure they’ll now explain that the profits earned by bailed-out bankers are an example of free market ideology in action.
perhaps. predictions about the future are notoriously sketchy except when making broad pronouncements. maybe the patriot act stopped terrorist attacks on america? maybe there would have been a great depression after all had we not gathered up under the tarp? in comparison, my saying “this will not be done particularly well” was a bit like saying “tomorrow the sky shall not fall.”
Comment by joe from Lowell —
July 20, 2009 @ 2:06 pm
I think it’s much more likely that you’ll see people explain that the profits earned by bailed-out bankers are an example of the “free market” in action, with the scare quotes emphasized, so as to make the point that the aggregation of wealth into few hands is not, in fact, usually accomplished by a free market.
Comment by PenGun —
July 21, 2009 @ 3:51 am
It’s interesting that with the present unemployment and the present rate of increase that Michigan should reach 100% unemployed in about 12 months.
Have a nice decade.
Comment by von Laue —
July 21, 2009 @ 8:36 am
joe – “Bank runs”? You’re clearly not worried that the common man would lose 30-50% of their savings, which was the danger of pre-FDIC bank runs.
There would be a temporary lack of access to credit. Maybe. And there would have been a real upsetting of bankers’ worlds.
Actually, what is your disaster scenario?
Comment by joe from Lowell —
July 21, 2009 @ 11:19 am
von Laue,
For one thing, the FDIC-insured deposits just held by Citi, BoA, and a couple other big boys were several times larger than the money the FDIC had available, meaning we would have been looking at a TARP-sized bailout just to meet the FDIC’s obligations – and we still would have had those banks fail. The failure of such large institutions could very well have set off runs on even healthy banks – bank runs are called “panics” for a reason. So, banks start calling in all of their loans to make sure they have lots of cash on hand, but plenty of them go under anyway. Now, imagine everyone who is owed money by any of those failed banks not getting it. Then put the “temporary lack of access to credit,” which very well could have gone on for a long time, on top of all of that.
The FDIC is there to make sure that the normal, run-of-the-mill bank failures that happen every so often don’t spread beyond the individual bank that went under, the way they sometimes used to. It’s very good at that. The problem we faced last fall and winter went well beyond that.