Wall Street Firms Expected To Slash Annual Bonuses. Really? No!?

November 10, 2008          Comments (0)

According to the merriam-webster dictionary the definition for bonus is: something in addition to what is expected or strictly due: as a: money or an equivalent given in addition to an employee’s usual compensation.

With companies like Lehman Brothers going bankrupt, the emergency sales of Bear Stearns and Washington Mutual and federal rescues for the insurance giant American International Group and the mortgage companies Fannie Mae and Freddie Mac how can the word bonus even come up for discussion?

The fact that our tax dollars are being used to bail out these companies and many others and bonus talk is even going on is completely outrageous.

The sad part is these companies employ hundreds of thousands of people cumulatively but only a tiny percentage of the people in these companies brought this all on us. When I say this; I’m referring to the biggest financial crisis since the Great Depression. I’m referring to people who almost brought down the entire global financial system.

I’m referring to the companies that are going to get over $700 billion beans from us. And please spare me with, “The Government’s money is not being used for our bonus pool”, is what these companies are saying. I don’t care if my money or their company’s money is being used for a bonus. If they have enough money for a bonus why do they even need our money in the first place?

Now all of these guys who made millions and millions on the way up want money on the way down? Did they distribute their wealth when they were doing so well?

Nobody can make a bad business decision in America anymore? Business failure is just as critical for a free market (like the one I thought we lived in) to succeed.

Not every business can thrive (and survive!). Capitalism creates innovation. Innovation leads to a better standard of living because we get to enjoy a higher quality of products and services. Out with the old. In with the new. Survival of the fittest baby.

Unless, the old, is of course, still better. Either way, the free market dictates everything it wants to see more of.

If old systems and processes and ways of doing business (obviously) aren’t working then let them not work. But what’s the incentive for a company like Well’s Fargo (still doing relatively well) to innovate and not make reckless decisions? Why not go for broke if you’re just going to be saved in the end anyway?

When you save industries like the car industry, or large Wall Street ‘Institutions’ or the airline industry what’s the incentive to innovate?

How come Herb Kelleher (one of my heroes) was able to build Southwest into such a profitable company while other airlines were begging for money?

I do understand if we didn’t bail out some of these companies they wouldn’t just affect the people in these companies. It would affect the entire world.

But there’s got to be a line drawn somewhere. This isn’t a risk free game. Or is it? And how in the world do these companies even have the audacity to give out bonuses?

Thankfully, MyBodyTutor is doing well but I’ll tell you one thing for sure – if I went out of business because I made bad decisions the government certainly wouldn’t give a flying f$$k!

But I’m so lucky to have clients like Wes. Read this blog post of his and this blog post of his. (Actually, read all of his posts at PickOnTheFatKid.com. My goal is to inspire him (and all of my clients) to be inspiring.)

And I’m so lucky to be doing well in this down economy with all this craziness that was brought on by these Wall Street guys.

It’s too bad I’m not like them. They are lucky no matter what.

(Hat tip: This article for making me ticked off enough to write this post and to Evan for also wondering what happened to a true free market economy!)

[Update: Apparently other US Taxpayers feel the same way! Check out this great article from Bloomberg here.]

If you enjoyed this post, make sure you subscribe to the RSS Feed!

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment