A question that many of us would love to have answered is, whatever happened to those original billions in Wall Street bailout money? Would we be wrong to say that some of that went down the toilet?
It’s hard to remember since there have been so many plans, but wasn’t the money from Bailout No. 1 supposed to help the banking and mortgage crisis? Well, have you or any of your neighbors felt that your mortgage problems have gotten better since the banks got this money? Or maybe they decided to help us another way: has your savings account interest gone up since they increased the amount of cash in their vaults? I don’t think so.
F. Scott Fitzgerald famously said, “The rich are different from you and me.” Ernest Hemingway replied, “Yes, they have more money.” But now it’s obvious that some of them also have more gall, chutzpah, ego, selfishness, and imported area rugs.
Like the rest of us, the wizards of Wall Street saw how foolish the Not So Big Three automaker heads were when they flaunted their luxurious ways by flying to Washington the first time in their private jets. Yet Citigroup didn’t cancel the order for its new $50 million jet until it was pressured by the Obama administration. Now that it canceled it, Citigroup might not get its deposit back. Do you feel as sorry for them as I do?
As billions flew into banking coffers courtesy of, well, us, millions flew right out of those coffers in the form of bonuses. That’s right. Some bailed-out banks gave big bonuses to their bosses. I didn’t watch every minute of the news during those early bailout days, but I don’t think that’s what the money was intended for.
Oh, there’s something else that some of these greedy executives are: clueless. What’s missing in their brains that tells them it’s OK for them to accept huge bonuses while others would consider it a bonus to just still have jobs?
Their rationalizations are succinct, but absurd. In the case of the GEO’s (Greedy Executive Officers), they claim that their company needs to attract the best people to do the best job, and those people sometimes like to be pampered.
John Thain is an executive who liked to be pampered. The recently fired GEO of Merrill Lynch & Co. spent $1.2 million last year to renovate his office. His office! While he was at his very beautiful desk, his company gave out an undisclosed amount of bonuses. These bonuses were paid after, you may recall, Merrill Lynch was rescued by Bank Of America which was helped by — you guessed it, us.
But back to Thain’s office. Among the things he had his company pay for were $87,000 area rugs, a $25,000 pedestal table, a $68,000 19th-century credenza, an $18,000 chair, a $16,000 custom coffee table, and a $35,000 antique commode. It wasn’t even a new toilet, but the guy spent 35 grand for it.
Once Thain was caught with his pants down, he said that he would pay the money back to the company. He added that considering the times, this expensive redecorating was a mistake in judgment.
Hiring Thain was the real mistake in judgment. He wasn’t just fired because of his extravagant office tastes. He was let go because while he was in charge, Merrill Lynch lost more than $15 billion in one quarter. That’s $5 billion a month or about $166 million a day. If he put in an eight-hour workday, he lost about $21 million an hour, $346,000 a minute, or $5,787.04 a second. This business expert lost money probably faster than anyone can print it.
That’s what’s so aggravating about all this. These people who have been buying islands and giving their kids platinum pacifiers aren’t necessarily geniuses. They are the same jerks that got us into the big financial mess in the first place.
Whoever came up with the idea of giving bonuses to people who do a bad job probably never filled up his car with gas by himself, never took out the garbage, and never uttered the words, “Is this going on sale soon?” If these people had done a great job, their desire for money and luxurious things wouldn’t seem so absurd. Let’s put it this way: if any of them had made a profit instead of a loss of $15 billion in the fourth quarter of last year, they’d deserve to have any kind of toilet they want in their office. But I still think that 19th-century credenza is a bit much.
Lloyd Garver has written for many television shows, ranging from “Sesame Street” to “Family Ties” to “Home Improvement” to “Frasier.” He has also read many books, some of them in hardcover. He can be reached at firstname.lastname@example.org. Check out his Web site at lloydgarver.com and his podcasts on iTunes.