by ilene - October 25th, 2009 2:31 am
Courtesy of Robert Reich of Robert Reich’s Blog
At a conference in London, a Goldman Sachs international adviser, Brian Griffiths, praised inequality. As his company was putting aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier, Griffiths told us not to worry. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” he said.
Eight months ago it looked as if Wall Street was in store for strong financial regulation — oversight of derivative trading, pay linked to long-term performance, much higher capital requirements, an end to conflicts of interest (i.e. credit rating agencies being paid by the very companies whose securities they’re rating), and even resurrection of the Glass-Steagall Act separating commercial from investment banking.
Today, Congress is struggling to produce the tiniest shards of regulation that would at least give the appearance of doing something to rein in the Street.
What happened in the intervening months? Two things. First, America’s attention wandered. We’re now focusing on health care, Letterman’s frolics, and little boys who hide in attics rather than balloons. And, hey, the Dow is up again. The politicians who put off Wall Street regulation for ten months knew that the public would probably lose interest by now.
Second, the banks keep paying off Congress. The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley’s Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.
Official Wall Street PAC donations are piddling compared to the tens of millions of dollars that Wall Street executives dole out to candidates on their own (or with a gentle nudge from their firms). Remember — the Street is where the money is. Executives and traders on the Street have become the single biggest sources of money for Democrats as well as Republicans. And with mid-term elections looming next year, you can bet every member of Congress has a glint in his or her eye directed at the Street.
That’s why the President went to Wall Street to raise money Tuesday night, gleaning about $2 million for the effort. He politely asked the crowd to cooperate with reform — “If there are members of…
Tags: Brian Griffiths, campaign contributions, Financial Regulation, Goldman Sachs, Ken Feinberg, lobbyists, Pay Czar, Politics, Robert Reich, Wall Street
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by ilene - October 22nd, 2009 2:15 pm
Courtesy of Adam Sharp’s Bearish News
We have to tolerate the [pay] inequality as a way to achieve greater prosperity and opportunity for all -Brian Griffiths, Goldman Sachs International Adviser
Griffiths made the remarks while arguing that outsized banker pay will boost the economy, via increased spending. Bloomberg is the source, and unfortunately they didn’t provide too much more info. Lord Griffiths made the statement during a panel titled “What is the price of morality in the marketplace?”.
“Smartest Guys in the Room” Defense Not Working Anymore
Looks like now everyone realizes Goldman is getting tremendous benefits from the Feds, they’ve been forced to switch-up their defense tactics. They can’t use the old “hey, we’re awesome at what we do” defense anymore.
But I don’t think the trickle-down argument is fly either. Too much populist outrage for the “We pay taxes on our Porsches, and that helps everybody” case to work.
Alms For the Poor
The charitable-giving angle isn’t working either. Goldman recently pledged $200m to charity in an attempt to generate some good PR. Doesn’t look like it was successful so far, and it may even be fueling the Goldman-haters’ fire. But Mr. Griffiths mentioned the “alms for the poor” message too:
To whom much is given much is expected. There is a sense that if you make money you are expected to give.
There is a sense?! These guys are ripping off the world, and there’s only a sense they should give something back? How about everything? All bonuses from the last 5 years clawed back? That would be a good starting point for negotiations.
When a bank has access to the discount window, has raised $50b in taxpayer-guaranteed debt, and benefits in other ways from the Feds’ actions, it’s ridiculous that they’re handing out record bonuses. They shouldn’t be getting bonuses at all. The balls of a guy like Griffith are mind-boggling.
Related:
Letting Goldman Roll The Dice
Tags: bonuses, Brian Griffiths, clawbacks, Goldman Sachs, the Fed, trickle down
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.
