Goldman to Americans: Take Your Populist Pitchforks and Stick 'em!
The next chapter in the debate over bonuses is starting. A story about 2009 Goldman Sachs bonuses, originally reported in the British daily The Guardian, is getting some attention on this side of the pond.
On News-Talk 1110-WBT/Charlotte, NC this morning, the hosts asked me about the fairness of a TARP recipient doling out millions of dollars to employees and whether Goldman was sticking it to the government.
I reminded listeners that Goldman has not paid out a dime of bonuses yet. After all, we're not even half-way through the year, so the talk is somewhat premature. Goldman is putting aside half of its first-quarter profit to fund future potential bonuses to its staff. If the firm's profits evaporate due to market or economic conditions, these dollars may not be paid at all.
As far as sticking it to Uncle Sam, I wouldn't be surprised if a few Goldman executives are secretly saying that the government and angry taxpayers can take their pitchforks and stick 'em, but that's probably a smaller number than you might imagine.
I know that the mere mention of paying out any bonus money is going to make people crazy. But Goldman, along with nine other companies, has repaid TARP funds with interest; they are meeting the government's liquidity requirements; and are operating within acceptable leverage ratios. Aren't they allowed to pay their people?
