How Palin Paves the Way for Bloomberg 2012 by Mark McKinnon
Hot Topics: Galleries, Sarah Palin, Big Fat Story, Giving Beast, Hungry Beast, Art Beast
Enter your email address:
Enter the recipients' email addresses, separated by commas:
Message:
Charles Dharapak / AP Photo With bonus season beginning, Charlie Gasparino talks to pay czar Kenneth Feinberg about limiting executive compensation, how Congress will manage risk, and why CEOs are scared.
Goldman Sachs CEO Lloyd Blankfein is a very worried man, but not for the same reasons as his counterparts at Citigroup and Bank of America, who, a full year after being bailed out by the government, still wonder whether their firms can survive in the long run.
No, Blankfein’s problem is different: Goldman is making a lot of money these days, having amassed a bonus pool of $20 billion. Normally that would put Blankfein in line to earn around $60 million for 2009, and his senior staff not much less. But given that Goldman Sachs was bailed out as well—with a $10 billion government loan during the meltdown days —reasonable people are asking a reasonable question: Is it fair that Goldman showers so much money on its senior people who, but for the grace of the American taxpayer, would be working somewhere else?
House Speaker Nancy Pelosi is now in charge of risk? That can’t be so. But it is. “She has one vote,” was Feinberg’s reply.
That question is a hot topic in Washington these days as lawmakers are weighing various proposals to rein in such lofty compensation packages in the future. Blankfein, according to friends and colleagues, knows he can’t pay himself or his top people as he would normally would.
For all those reasons, Blankfein is worried. He’s told other top executives that he’s now concerned that if he can’t pay his management team, they might leave the firm. The senior team that made Goldman the best on Wall Street (even if it was bailed out last year) might be leaving for greener pastures in places the government has less stroke, namely in the private-equity business or at hedge funds.
Of course, it’s hard to feel too sorry for Lloyd Blankfein. The very fact that’s he’s complaining about making $10 million this year as opposed to $60 million in the first place makes me ill—even more so than his recent bizarre pronouncement to the Times of London, that he does “God’s work” at Goldman.
And while he’s working for the Lord, the firm still benefits mightily from being officially classified as a commercial bank, instead of what it really is, a big risk-taking hedge fund. Because the feds think Goldman is so important to the financial system, it gets to borrow as if it were a bank, from the Fed during times of stress, but more cheaply in the open market. This borrowing makes its risk-taking more profitable, thus the $20 billion bonus pool that being amassed with a taxpayer subsidy.
But the main reason I don’t feel sorry for Goldman is that the firm has managed to pay back its loans and, as a result, put itself outside of the purview of Kenneth Feinberg, the “Special Master for TARP Executive Compensation.” (Essentially, any firm that hasn’t returned the bailout money must answer to Feinberg. He determines how much is too much when it comes to paying top executives, hence his moniker, Pay Czar.)
I had a chance to interview Feinberg Monday night during a dinner sponsored by Directorship magazine, a trade publication that covers boards of directors and corporate-governance issues such as compensation. Feinberg is an interesting character in that he really believes that by limiting the pay of top executives on Wall Street we can prevent another financial meltdown.
At least that’s what he suggested throughout his speech as he described his job, mainly how he determines how much is too much when it comes to paying people at TARP-affected banks, particularly Citigroup and Bank of America, both still owned in large part by the federal government.
View as Single Page 12 Back to Top November 17, 2009 | 11:50pm Facebook | Twitter | Digg | | Emails | print Charlie Gasparino Kenneth Feinberg, Kenneth Feinberg Tarp, Lloyd Blankfein Goldman Sachs, Lloyd Blankfein Wall Street, Kenneth Feinberg Bonuses, Kenneth Feinberg Wall Street, Kenneth Feinberg Pay Czar, Kenneth Feinberg, Tarp, Bank Of America, Goldman Sachs Bonuses, Citigroup, Lloyd Blankfein, Business, Goldman Sachs, Wall Street (–) Show Replies Collapse Replies Sort Up Sort Down sort by date: magicman
Blankfein should be worried simply because he knows how he is earning this money and is simply not telling the rest of us. HE IS EARNING THIS INCOME AT THE EXPENSE OF EVERYONE ELSE. This is, in fact, what TREASON means. When an individual or a firm put their own selfish interests ahead of the group, in this case that group being the American Society, he does so at the expense of this very same group. How is this any different than spying for the enemy, or being the enemy of Society to begin with? It isn't. It is exactly the same. And yet Blankfein is grasping at "God's Will" straws in order to justify his own existence. The pattern behavior of the Goldman wives speaks volumes when they trample ahead in line past 'the little people' AT A CHARITY AUCTION. How are the morals any better at home than they already are at work? This is what mimiced behavior is all about. It is also the fine art of self incrimination that is unfolding here. There is simply nothing holy, or "God's Will", about stampeding past others, whether it is in financial markets using flash trading techniques and HFT Computers or through lines at charity events. The pattern behavior reveals exactly the same deficiency of thought for the rights of others. How no one can manage to see the obvious nature of this behavior can only be attributed to wishful thinking, the result of payoffs and bribes to those in regulatory agencies who routinely display a form of public callousness to the financial health of the body politic collectively. This is exactly the same behavior exhibited by Fannie Mae and Freddie Mac for nearly a decade. The ethos is known widely and from History as simply "The Public be damned". How is this not evidence of Treason? It is my sincerest wish that H.R. 1586 will be passed in the U.S. Senate, and if necessary for Constitutional purposes, that a Trial be held, in the Grand Watergate Tradition, to get to the bottom of a crime perpetrated by exactly the same folks who are receiving the benefit...that being Goldman Sachs itself, and to the exclusion of the rest of society. Why we are off fighting the Taliban in Afghanistan, risking life and limb to our sons and daughters, while this American Taliban Chief is allowed to roam free throughout our fair land? This is the simple proof that our system is designed purposefully for the benefit of those who 'service' investors, at the expense of the rest of us. If this is "God's Work", Blankfein either believes Americans are so stupid that they simply do not understand what God's Work actually entails, or his concept of God has been twisted by his devotion to his work at the expense of his God. God cares not a whit about money. If he did he would say so in Scripture. The words are simply not there. It should be obvious to anyone that had Blankfein ever stepped foot in either Church or Temple, that he would know this, and clearly he does not. There simply is no Feast Day for three-card-monty players, though there is a Day of Atonement.
The banksters have fixed the wheel, and they know it. If it weren't for the AIG bailout, Goldman would have been toast, just like all the other too big and well connected to fail. The only reason they pulled the plug on Lehman and not Goldman was that no one wanted guys who worked for that fucking idiot Fuld to work in government. So the "smoother" Goldman crooks, like Rubin, Paulson Timmy G and their enabler Summers, run the show from DC. Here's hoping those Goldman guys (and gals) end up where they belong, doing hard time with Madoff. George Patton
Just wait the results on 2012, then they and this administration will understand clearly who cares for the tax payers money !,...
Lloyd Blankfein is worried about what, these guys will pick our pockets while taliking to the pay czar. It's the your shoe is untied Jeffery theory.
The emptiest threat on the planet is Wall Streeters saying that if they get a super-fat paycheck, they'll quit and go to work for someone who'll pay them properly. Let them quit. A handful might land on their feet at another firm. But the vast majority will end up delivering pizza and collecting carts in a supermarket parking lot. Goldman could lose their third most well-paid employees and not miss them because the firm's bench is so deep. For most Goldman employees, the size of their paycheck is due to the overall quality of the firm, not because of their own intrinsic abilities. And they know it. So if they leave, they're probably going to end up either unemployed or working for a firm that's nowhere as good as Goldman. Feinberg should call their bluff.
There can't be any sympathy at all for Goldman. Should have been nationalized and broken up into a million pieces. Don't the door hit you in the ass you thieves.
Clawing back bonuses is the least of it. It's pretty clear that Goldman was playing both sides--they were betting against their mortgage tranches while selling them as safe investments. In the absence of Goldman people going to jail for this (or better yet, Goldman being forced to buy back its bad paper), nobody there should see a bonus.
Did anyone who has left comments here even read the entire article? This article is not about the greed of Wallstreet, but rather how the policies of Washington has created the low risk environment that allows for corporate greed. Wallstreet will only risk what it deems prudient, and without the security of government bailouts, much less risk will be prudient. Less risk usually equals less returns which equals less bonuses. In response to the comments however, please review basic economics. Money is not a pie where if one person has more of the pie then others must have less. Money is created all the time, in fact creating a bigger pie. Just because someone is earning a large sum of money does not mean they are taking money out of the pocket of others. In fact, like the case of Bill Gates, they might be filling the pockets of others at an astronomical rate.
Thank you. As a first time user, your comment has been submitted for review. It can take anywhere from a few hours to a day or two for your comment to be reviewed, depending on the time of week and the volume of comments we receive.
Please log in to leave comments.
China's Upper Hand
Peter Beinart, senior political writer for The Daily Beast, is a professor of journalism and political science at City University of New York and a senior fellow at the New America Foundation.
Obama's Bad Trip
Richard Wolffe is Daily Beast columnist and an award-winning journalist, and senior strategist at Public Strategies. He covered the entire length of Barack Obama's presidential campaign for Newsweek magazine. His book, Renegade: The Making of a President, was published by Crown in June.
The Assassination of Greg Craig
Steve Clemons is Director of the American Strategy Program at the New America Foundation and publisher of the popular political blog, The Washington Note.
Clinton Goes to Afghanistan
Arrives for Karzai's inauguration.
Obama 'Angrier than Bob Gates'
Afghanistan leaks are a "firing offense."
Holder: No Need to Fear 'Coward' KSM
Attorney general, Obama defend trial.
Wall Street Will Walk
Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
What Obama Should Tell Wall Street
Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
Behind Ken Lewis' Panic
Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
Sign me up for The Daily Beast's morning email and breaking news alerts.
Sign me up for The Yes List, weekly cultural recommendations from The Daily Beast.
I'd like to recieve e-mail notifications as:
Sign me up for occasional special offers sent by The Daily Beast on behalf of select sponsors, and for occasional special offers from IAC companies.
Partner Sites: Expedia| Hotels| Hotwire| Urbanspoon| Vimeo
Sign me up for The Daily Beast's morning email and breaking news alerts.
Sign me up for The Yes List, weekly cultural recommendations from The Daily Beast.
Read Full Article »