Debt Help Delivered

Cited: Reuters

A New York Times editor strongly suggested that Goldman Sachs make a multibillion-dollar gift to the government instead of paying executives big bonuses to help reduce the US national debt because of its role in the financial crisis.  That editorial was dated November 21 on the Times’ website and then published the 22nd in print.  It attacked Goldman for everything from its top executive’s failure to apologize properly for his part in creating the crisis as well as Goldman’s giving bonuses related to profits that were boosted by the government bailout.

The Times sniffed at Goldman CEO Lloyd Blankfein’s acknowledgment last week that his bank “participated in things that were clearly wrong,” saying that he was not specific about what the company had done wrong and his remarks did not “come close to an apology.”

It cited the company’s ability to set aside $16.7 billion for bonuses this year as it was able to post “blowout profits” after receiving a $10 billion government bailout and $12.9 billion in payments and collateral in relation to the government bailout of American International Group.

The paper described Goldman’s pledge earlier this week of $500 million over five years to help small businesses as “crumbs from its table,” saying it should do much more.

“The money will be welcomed by recipients, but if Goldman wants to make a meaningful contribution, it would have to be in the billions and aimed more directly at taxpayers,” the Times said.

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A contribution could also help Goldman ward off “serious calls for a windfall tax on bonuses, which would be justified since the profits they are based on are in a large part the result of government efforts,” the editorial said.

In another story published in the Times on Saturday, Gretchen Morgenson quotes Janet Tavakoli, an expert in derivatives at consulting firm Tavakoli Structured Finance, who urged Goldman to repay money from the AIG bailout, saying Goldman should be forced to take back toxic collateralized debt obligations, or CDOs, which had been insured with AIG.

“The prices of the collateralized debt obligations against which Goldman bought protection from AIG were in sickening freefall, and the cost of replacing AIG’s protection would have been sky-high,” she said. “Goldman must have known this, because it underwrote some of those value-destroying CDOs.”

“Goldman should do this before it gives bonuses to “taxpayer-protected employees,” Tavakoli said in the Times report.

Again the article suggested that Goldman Sachs return the favor to help small businesses and taxpayers to help it out in its time of need.  It also suggested that the Federal Bureau of Public Debt begin accepting tax-deductible donations that can help reduce the national debt and urged Goldman Sachs to donate. The paper said that a multibillion-dollar donation from Goldman could be made in such a way that it does not harm shareholders, noting that the related tax savings could help finance the company’s small-business initiative.

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My Take: I agree!  If they can afford to pay outrageous bonuses for profits that were received after their bailout, they should help pay the national debt too.  As a taxpayer, I am not willing to pay bonuses to executives who earn too much as it is.

Get real that would be like hiring a NC social security disability attorney for a broken leg.  That is nothing but a waste of money.  That is like buying Scentsy candles and not buying the Scentsy candle warmer to go with it.  You cannot light these candles without a wick, you need Scentsy warmer to melt the candle and smell it.  Even North Carolina bankruptcy attorneys can see the stupidity in this action.

If the company will not make the donations, then the executives should donate their bonuses.  It may not be a multibillion-dollar donation, but it sure would help.  According to the news, the recession is really getting bad and there are more people becoming unemployed.  They could use a little help!

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