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Goldman Bonuses Are A Travesty Paid For By The US Taxpayer

The argument goes:


1: Goldman is an independent company.

2: It is not receiving a subsidy from the government.

3: Therefore it can pay its staff whatever it wants.


Good arguments except for one point, Goldman is receiving huge subsidies from the government.


1.      They are allowed to value toxic assets for the purpose of assessing their capital adequacy at whatever they feel like, “mark to fantasy”, face, whatever.


2.      The can borrow money at basically no cost and use that how they see fit, to speculate, to game the stock market, whatever they like. And so far they have got “lucky” everything went up, so that explains the bonuses, and the more risk they take the more money they make (sounds familiar).78% of their revenue for the first nine months of 2009 was from its fixed income (that includes derivatives) and currency division (i.e. the gambling department).


And thanks to the forbearance on measuring the value of assets for capital adequacy, they can borrow a pile of money.


If that’s not a subsidy then I don’t know what is.


And of course, it they get their bets wrong, Heaven Forbid!! Well the government will be there to bail them out.


But one thing they are not doing is figuring out ways to get credit to small American businesses that are laying-off millions of workers because they can’t even finance their working capital.


What went wrong with America was cronyism, an elite gets to grab the cherries off the cake, and ordinary people get to suffer; did anything change?


The low base rate is not helping ordinary Americans, it is helping an elite, and foreigners (, time to call a stop, time to raise the base rates, and time for the American taxpayers to stop funding organized gambling where the gamblers get a cut of the winnings and the American taxpayer has to cover their losses.