In light of the recent credit crunch resulting from sub-prime mortgages, the federal government has agreed on a $700 billion bailout plan for these financing institutions. The idea was that when there is a credit freeze in the market, banks stop lending, businesses quit borrowing, and the economy does not grow. The fed hopes that by pumping more than $700 billion in liquidity into lending institutions the banks will ease their lending requirements and begin lending funds again.
Banks are notorious for their generous annual bonuses paid out to their CEOs and other top advisers. This bonus is thousands of times larger than the average annual American income and is on top of their overly bloated salary.
Why do CEOs of failing banks continue to be hoisted to their relaxed and cushioned seats at a steep cost to the taxpayer? Should we reward these obese fat cats of failing businesses for running their corporation into the ground?
There are easily thousands of state and local banks that are not begging for a bailout. Why not direct investors, employers, and businessmen to these smaller more stable banks? Banks screwed up big time. Why are we not demanding that they be held responsible for their inept lending practices by letting them fall helplessly to their knees and experience first hand the damage to the global economy that they have done. Instead we let them roll by in their Mercedes and BMWs while we try and put bumpers back on the Junker cars that they so generously give us.
Blog Stage 8: Comment on a colleague's work
4 years ago
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2 comments:
Mr. Brian Hall's Article "Are We Bailing Ceo's?" raises some interesting points about the $700 billion dollar bail out.I am going to have to agree with this blog, because not only it is well written, but also very informative, and speaks the truth about the $700 billion dollar bail out. These capitalistic giants expected from the middle and lower class to bail them out simply because of there miscalculations and their false egotistic influence on our government for their never ending greed. I have to say I'm glad, that old leather bag didn't make it as president only to repeat the same mistakes as our last president. With my Conservative/Republican ideology I still think we passed up on some good republican candidates who were simply ignored in these past elections.
Are we bailing out CEOs? Im going to have to agree with Brian and say, yes we are. He mentions “
Banks are notorious for their generous annual bonuses paid out to their CEOs and other top advisers. This bonus is thousands of times larger than the average annual American income and is on top of their overly bloated salary.” On top of that some of the bailout money was funding vacations and lavish “business meetings” that cost almost 300,000. The money spent doesn’t seem like a bailout to me, It seems like a huge bonus/payday for these CEOs.
Brian also mentions “Why do CEOs of failing banks continue to be hoisted to their relaxed and cushioned seats at a steep cost to the taxpayer? Should we reward these obese fat cats of failing businesses for running their corporation into the ground?” I say its cause the American government rewards failure.
Also here is some food for thought. The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
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