Goldman Sachs Analyst: Income ‘Inequality’ Will Lead To ‘Prosperity And Opportunity For All’
Goldman Sachs Analyst: Income ‘Inequality’ Will Lead To ‘Prosperity And Opportunity For All’
Last week, the Wall Street Journal reported that Wall Street banks are on pace to pay out a record $140 billion in compensation this year. “Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007,” the Journal found.
The New York-based investment bank Goldman Sachs has “set aside $16.7 billion for compensation and benefits in the first nine months of 2009,” which is a 46 percent increase from last year. But according to a Goldman adviser, Wall Street’s record pay is necessary “to achieve greater prosperity and opportunity for all”:
A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion hosted by St. Paul’s Cathedral in London.
At the same time that Wall Street’s pay has skyrocketed, pay cuts in other sectors “are occurring more frequently than at any time since the Great Depression.”
While record bonuses may indeed spur spending on million dollar apartments in New York City, the growth in Wall Street pay — and the growing share of national income that is going to the richest Americans — has not translated into shared prosperity. Consider, “back in 1985, the average annual salary for all workers across the country was actually a bit higher than the average [Wall Street] bonus ($19,000 to $13,970),” but “while the average bonus soared almost 14 times higher (by 2006), the average salary has essentially been stagnant sine the mid-1980s.”
Plus, Goldman Sachs is only able to make its current profits ($3.19 billion last quarter) — and thus pay huge bonuses — because of government programs aimed at reviving the economy, which allow the company to make “big bets using cheap dollars.” As Simon Nixon wrote, the profits “aren’t the due rewards for exceptional skill but gifts from taxpayers.”
8 Responses to “Goldman Sachs Analyst: Income ‘Inequality’ Will Lead To ‘Prosperity And Opportunity For All’”
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And Goldman makes $1 billion if CIT fails.
http://peureport.blogspot.com/2009/10/tarp-report-is-clear-as-mud.html
October 21st, 2009 at 1:17 pmDon’t forget Goldman’s energy futures trading desk, the one that bubbled oil to $140 a barrell. Oil supply and demand did not support the massive increase.
It seems another may be underway.
October 21st, 2009 at 1:26 pmIt is time to break Goldman Up! From this point forward, “Too big to fail” should be treated as “Too Risky to exist”. I am sick to death of their cavalier attitude toward average workers. It is time to get Wall Street out of the Government. Am I the only one who sees this as a major problem???
October 21st, 2009 at 1:28 pmhmm, Gold for Goldman Sachs, golden showers for the rest of us
October 21st, 2009 at 5:31 pmI concur, Dvora. “Too big to fail” means just plain “too big.”
October 21st, 2009 at 6:52 pmwhy “pessimistically” despair about what others make? that just shows the possibilities that are out there. You too can earn it. There’s no law against working hard for something and getting paid more than someone else.
Unlike the NFL, life should not have a commission and a set of rules by bureaucrats to limit success or to “level” the playing field.
Geee… now I do have issues with TARP, the bailouts, and the lousy stimulus bill. What a behemoth waste of tax dollars and useless destruction of our children’s futures.
October 21st, 2009 at 9:28 pmThree quarters of GS’s profits came from trading. This has zero to do with serving clients needs and more often than not worked against clients. GS is a gigantic hedge fund.
The worlds hot money has now crowded into the same trade. Borrow dollars at near zero percent, short the dollar and buy everything else; stocks, bonds, gold, oil, sugar, whatever. There is absolutely no way this will end well. There is going to be another accident. None of which has to do with free markets or free trade or economics or anything but the insatiable will to speculate. To keep throwing the dice at the crap table to make their year or until you take the dice from their cold dead hands. (HT to Russ Winter)
What GS’s net position is in all this is unknowable and besides the larger point. The point being the gigantic flows of hot money sloshing this way and that around the globe are destroying capitalism, and just about everything else. And these Pigmen have the gall to say it’s for every ones good.
October to date Federal tax receipts are down 9% yoy and last year was not a good year. This is almost pure with holdings, not skewed by corporate quarterly receipts. Sept. with those were down 29%. These are you green shoots. The Fed has shot it’s wad and will buy it’s last Treasury note tomorrow.
October 22nd, 2009 at 1:26 amYeah, “why pessimistically despair about what others make?” when you could be indignantly pontificating about the horrible unfairness of an immigrant’s kids possibly getting an undeserved school lunch for free like the Teabaggers do?
October 22nd, 2009 at 1:30 am