In this video President Obama lambasted corporate executives for accepting very tasty bonuses while simultaneously begging their customers (taxpayers) to shore them up so they can sell more stuff to them later. Prior to that I read this optimistic Yahoo article claiming that corporate fat cats may soon be starved of such bonuses.
Anyone reading this blog lately knows I have been in full-bore cynical mode and nothing I have read has dimininished that one iota. A large part of that is due to a Techpulse piece revealing how Yahoo’s current CEO is receiving an 8 million dollar “grant” in February 2009 even as the company flounders close to nonviability and employees see their pay frozen. Sure, this is an old story we’ve seen play out countless times but the distance between CEO arrogance and employee hardship hasn’t been this great since 1929.
But the icing on this sour cake is Rudy Guiliani’s unsurprising defense of disproportionate bonuses. He’s trying to make the case that it is those awards that will trickle down on the disadvantaged to keep an economy afloat:
“Those bonuses, if they are reversed, are going to cause unemployment in New York,” the self-described fiscal conservative said. “I remember when I was mayor, one of the ways in which you determine New York City’s budget, tax revenue is Wall Street bonuses.”
Hang on Rudy– again, those bonuses are nothing new. They’ve been awarded left and right as the finance bubble bloomed and then even as it collapsed. How much effect did they have on preventing the loss of hot air?
All facetiousness aside, I would be inclined to agree with Rudy, regardless of his poor showing in the last presidential primaries IF he could point to relevant statistics instead of resorting (as I did above to illustrate a point) to tossing up raw statistics without a proper dash of context.
Rudy, you should know that correlation does not necessarily indicate causation. And we already saw after the 1980s that so-called trickle-down economics are problematic yet you’re clinging to the discredited notion as if it still had legs. Your premise that the big bonuses will largely be spent in local eateries and the like is disingenuous; more likely, it will be placed in some overseas investment(s) considered to be more secure than anything the United States currently has to offer.
The reality is that if that bonus were instead awarded to the myriad employees actually working to make their employers successful, odds are the money would have a greater impact on local economies. But this idea can’t find a place at the table because it is tantamount to socialism.
Then again… aren’t the bailouts?