Wall Street Welfare Queen Average
Bonuses $1.0 Million Per Employee
Hacking its way through the financial jungle, Goldman always
comes out on top. Cheers! Image
The Money Party at Work
There are a number of stories out there about Goldman Sachs gaining unfair advantage in the financial markets. One concerns a former employee who allegedly swiped a special program to maximize automated stock trades. Questions were raised about the propriety of this since Goldman is hauling in tons of cash on a daily basis while others struggle. A variation of this story involves speculation that Goldman gets insider information through some internet scheme and uses that to maximize their haul.
But the biggest outrage is what's happened in public.
We Made Goldman Sachs what it is Today
If it weren't for our tax dollars and the cash flow that citizens provide for the United States Treasury, Goldman Sachs would have joined Bear Sterns and Lehman Brothers in the graveyard of financial high flyers.
But they were saved. Bush Secretary of the Treasury Henry Paulson came to the rescue when he assured that one of Goldman Sachs most important customers, the AIG group, survived a financial mess of its own creation.
Our original contribution was in the $20 billion range but then our elected representatives helped Goldman even more when they jacked up the subsidy to $85 billion. That's enough money to hire a workforce of one million people at a salary of $60,000 a year, plus benefits.
Had AIG tanked, Goldman would have been in very serious trouble. In September 2008, Paulson, a former CEO of Goldman met with Tim Geithner, soon to be President Obama's Secretary of the Treasury, when Geithner headed up the New York Federal Reserve Bank. Goldman's CEO was "the only Wall Street chief executive" at the critical meeting.
This back room meeting was exposed by Gretchen Morgenson in an
outstanding New York Times article: "Although it was not widely known,
Goldman, a Wall Street stalwart that had seemed immune to its rivals'
woes, was A.I.G.'s largest trading partner ... A collapse of the insurer
threatened to leave a hole of as much as $20 billion in Goldman's side,
several of these people said." Sept. 27, 2008
While Lehman Brothers got nothing, AIG got some serious cash and survived, thus assuring Goldman's survival. Secretary Paulson and then New York Fed president Geithner came through with the guarantees. When Paulson left with Bush, Geithner showed up to take Paulson's place at Treasury. The beat goes on.
It's The Money Party at work. They have no permanent friends or permanent enemies, just permanent interests. Goldman's interest was turning a sow's ear, the financial collapse that they helped create, into a silk purse. Mission accomplished.
Goldman's chief financial officer attributed the $39 million a day income to the firm's reputation for "very, very strong culture of risk management." Is he kidding? Their success is based on that $85 billion of our money that saved their asses. Goldman's average $1.0 million per employee bonuses wouldn't exist were it not for citizens paying for their survival.
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