Bankers' bonuses restricted in Europe -- in the US …
Kucinich's Bill to Transform Issuing New Money
Could Congress break up the bankster monopoly? Europe is curbing the questionably-gotten gains. We trim, blend, and append three 2010 articles from: (1) Washington Post, Nov 24, on profits by Ezra Klein; (2) Global Research, Dec 9, on the bailout by Danny Schechter (who edits Mediachannel.org and directed Plunder The Crime of Our Time); and (3) BBC, Dec 10, on bonuses
by Ezra Klein, by Danny Schechter, by BBC
Kucinich Bill to Replace the Fed
JJS: Dennis Kucinich on December 17th introduced a bill to replace the Federal Reserve, a pseudo public agency, with a truly public agency.
The National Emergency Employment Defense Act of 2010, abbreviated NEED, carries the number HR6550. The bill also recommends a Citizens Dividend. While Dennis uses my coinage (no pun intended), what he means by “Citizens Dividend” is actually social credit; that is, putting some brand new money into everyone’s pocket. It’s not recovering the socially-generated rents we all pay for land and resources then sharing those monies via a check to the citizenry (something much harder to pull off politically).
Still, it’s nice to get the phrase into wider use. For a copy of the legislation click here
The real story on corporate profits
Seeing corporate profits as a share of the economy is probably a better perspective. Then third-quarter 2010 profit share, at 9.46%, is slightly below the peak of 9.58% in 2006 Q3 -- still quite high by historical standards.
Compare that to employment, or wages, which are nowhere near their all-time highs. And compare some businesses to others. Corporations that sell stuff here and don't make their money from Wall Street account for about 7% of national income, which is well below their past high of 15%.
The corporate profit picture mirrors what's been going on in income distribution for individuals for the past few decades. The money is increasingly going to a select group at the very top of the economic food chain.
JJS: Inequality in the US is at the highest level of any industrialized country. A few are at the top because they’re deep inside political capitols.
Go, Wall Street, Go!
Christmas on Wall Street is bonus time. Five banksters have stashed $90 billion for payouts to prized employees. And that "bonus pool" will rise with end of the year earnings.
These banks exist only because government bailed them out. Then the Federal Reserve Bank pumped $12.3 trillion (that’s trillions) in low-interest loans into their coffers -- a taxpayer funded 'backdoor bailout by a small group of unelected bankers they kept secret for years.
Federal Reserve was secretly throwing around our money in unprecedented fashion, and it wasn’t just to the usual suspects like Goldman Sachs, JP Morgan, Citigroup, Bank of America, etc.; it was to the entire Global Banking Cartel. To central banks throughout the world: Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden, Switzerland, and England. Plus private banks like Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (UK), Barclays (UK), BNP Paribas (France).
The FDIC is investigating officials from banks that failed. The "Justice Department" has 343 criminal investigations underway into insider trading. But none against big players. John Hueston, a former lead Enron prosecutor, wonders: “Have they committed the resources in the right place? Nobody from Lehman, Merrill Lynch, or Citigroup has been charged criminally with anything."
It’s up to us to break through our own illusions to fight the plunder of our country and world. We need to call for a jailout, not a bailout. of financial criminals.
JJS: Europe, at least, is doing something.
Bankers' bonuses to face strict limits in Europe
European regulators have confirmed restrictions on the bonuses that banks can pay their staff. Only 20-30% of bonuses can be paid in upfront cash, according to new guidelines announced by the Committee of European Banking Supervisors (CEBS).
They recommend requiring that banks:
* defer 40-60% of bonuses for three to five years, and pay 50% of bonuses in shares (rather than cash)
* exclude any "award for failure" from severance pay packages
* publish pay details for "senior management and risk takers".
Banks are required to implement the rules by 1 January, meaning they will affect bonuses for the current year, which will be paid out in January-February.
The rules will not apply to Switzerland, a major international banking centre that is not part of the European Economic Area. However, the Swiss imposed their own minimum pay standards on banks at the beginning of this year, although their rules do not contain any explicit limit on how much bonus can be paid upfront in cash.
The new regulations will restrict how much Non-European banks may pay staff working for subsidiaries based in the European Economic Area (the European Union plus Norway and Iceland).
Although they have made no such threat, the rules may encourage European banks to move their corporate headquarters to Asia in order to avoid having to apply the rules to employees located outside Europe.
A spokesman for the Financial Services Authority confirmed that the UK bank regulator and its counterparts in other European countries intend to implement the guidelines in detail although they are not obligatory.
The new rules could mark a profound change in the City bonus culture. In the past, star performers have been able to negotiate big pay deals by threatening to quit and work for a rival bank. But the new rules mean that any banker that did leave would forfeit years-worth of deferred bonus payments.
JJS: Should banks be so rich? They couldn’t be if they were not the ones to siphon up, via mortgages, all the “rents” that people pay for land and resources. If society recovered that flow of fortune for itself -- via taxes or land dues -- then banks would be small business and everybody would enjoy the bonus of a Citizens Dividend.
Editor Jeffery J. Smith runs the Forum on Geonomics.
Disclosing Who Gets Government Favors
Congress Can't Get the Fed to Reveal Much
Investigating Friedmanism at the Fed
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