Wall Street’s big bankers are doing fairly well these days.
Goldman Sachs CEO Lloyd Blankfein is now worth $1.1 billion, with his 2.2 million Goldman shares having gained 123% over the past 3 years (CNN Money 7-26-15).
JP Morgan Chase CEO Jamie Dimon’s total pay package hit the $20 million mark in 2014 (Reuters 1-22-15). His net worth is a reported $1 billion.
In 2009, with the financial crisis winds blowing hard across the U.S., and major Wall Street getting billions of taxpayer dollars through TARP and billions more in ‘free money’ from the Fed’s emergency lending facilities and the Fed discount window, nine of these big banks also managed to lather up their bonus pay to the tune of $33 billion.
Those banks included Goldman Sachs, JP Morgan, Morgan Stanley, Merrill Lynch, Citigroup, Wells Fargo, Bank of America, Bank of New York Mellon Corp, and State Street.
Here’s the story:
Bank Bonus Tab: $33 Billion – WSJ
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Meanwhile here is the status of millions of U.S. citizens – whose money, and future purchasing power, helped support the bonus pay initiatives for Wall Street bankers ‘in their moment of need’…
Maudlin Economics August 18, 2015 Distressed American Workers Expose the Fallacy of Improving Unemployment Numbers
Job Growth but No Wage Growth. Job seekers may find it easier to find a job, but good luck trying to find a job that pays enough to support a family.
The lightly followed Department of Labor’s quarterly Employment Cost Index (ECI) is Janet Yellen’s favorite wage indicator for good reason: it most accurately reflects the true cost of labor to businesses.
Well… the ECI increased by 0.2% in the second quarter of 2015. That was not only way below what Wall Street was expecting, it was also the slowest pace of wage growth since 1982 when ECI record keeping started!
Those are bad numbers, but it is really worse if you dig below the headlines:
Devilish Detail #1: Government Worker Wages, Not Private Sector.
The overall ECI was up by 0.2%, but that is only because compensation for government workers increased by +0.6%.
What about the private sector? Change in compensation: 0%. Yup… ZILCH… NADA… ZERO… not a penny.
Devilish Detail #2: Benefits, Not Wages, Are Rising.
In the past 12 months, the ECI is up 2%. Sure, that kind of increase is nothing to shout about, but 2% is better than a sharp stick in the eye.
Hold on… not so fast!
Remember, there are two components of labor costs: (1) wages and (2) benefits like paid vacation, Social Security, workers’ compensation, and health insurance. Wages are roughly 70% of ECI, and benefits make up the remaining 30%.
Over the last 12 months, the cost of benefits has increased by +1.7%. My guess is that the lion’s share of that increase can’t be attributed to higher health insurance costs.
Moreover, the trend these days is for employers to pass on some or all of the higher costs of health insurance to employees, thus reducing take-home pay.
You know where else these measly wage gains are showing up? In homeownership.
Despite record-low interest rates, an increasing number of Americans are renting rather than buying. The Census Bureau reported that the US homeownership fell to 63.4%, the lowest level in 48 years.
The homeownership rate peaked in 2004 at 69.2%, but has been falling ever since.
Moreover, the rate of homeownership hasn’t been this low since 1967, when it was 63.3%.
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There is one economic acceleration plan that levels the playing field for U.S. citizens. This plan does not ‘tax’ the big banks, like Elizabeth Warren proposes, to redistribute wealth to the lower classes.
This plan simply grants U.S. citizens the same access to liquidity that Wall Street banks received during ‘bailout mania.’
There is one economic acceleration plan that restores economic liberty, revives financial health for American families, reignites economic growth, shrinks the deficit, and pays for itself over 10-15 years.
The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen The Leviticus 25 Plan 2015 (1087)