The amount of green has exploded, and is growing. We’re not talking about Earth Day. Or even 4/20.
We’re talking about the $5.4 billion in bonuses being shoveled into the bank accounts of executives at investment firm Goldman Sachs. The incentives serve as a reward for making risky financial transactions that can tear an entire economy down if they fail.
Top dogs like investment masterminds Jonathan M. Egol made off with millions of dollars at the expense of thousands of honest investors.
British Prime Minister Gordon Brown has called it “moral bankruptcy.” Legendary former Goldman Sachs Managing Partner Sidney Weinberg has called it “long-term greedy.”
That’s because the company has been up to no good for a long time. They spent the better part of the last decade playing Russian Roulette with the international economy. In 2008, when the global economy tanked, both the United States and the European Union spent billions of dollars and euros in tax revenue, bailing out failed investments marketed by Goldman and other financial giants.
After the banks brought down the global economy and then were stabalized by tax payers’ dollars, they found it necessary to award themselves with outrageous bonuses. Goldman Sachs’ executives deserve a demotion and a pay cut. Not a bonus.
The company is facing a European Union investigation into a 2002 swap deal similar to transactions that lead to the current financial crisis.
The Security and Exchange Commission (SEC) has recently filed a suit against the company for unfair and illegal business practices that happened in 2006. The SEC says Goldman Sachs bundled bad loans and financial packages that were destined to fail and sold them, insisting that they were good. Then, they bought insurance against their own deals, essentially betting against their own plans, so they could make huge profits off of everyone else’s losses. Rewarding bad behavior via bonuses only continues the cycle of risky practices.
The executives already received over $16 billion for their annual bonuses last January. This recent $5.4 billion bonus comes for a measly three months of work.
That money rewarded was for business practices similar to those that caused the housing bubble to burst.
The SEC should continue to pursue and prosecute these executives. The leaders of Goldman Sachs need to be held accountable for their enormous moneymaking schemes that put the entire global economy at risk.
Just because financial firms like Goldman Sachs paid the government back for their bailout, doesn’t mean they can continue engaging in risky practices that led to that bailout in the first place.
Financial expert Michael Greenberger compared Goldman’s scheme to a real estate agent who looked at a house that was about to burn down, got it insured for themselves and their more prominent investors, and then sold other people the house telling them it was a good investment.
“People expect their advisers, in this situation, to be giving them good advice,” Greenberger said, “not selling them a house that’s about to be on fire.”
Insane profits from high-risk deals are not good for the American people nor our economy. Enormous bonuses for practices that put our economy and livelihoods at risk are not acceptable. These risky practices must be made illegal and those who gamble with our country’s economy should be prosecuted.
That will be the only way to show Goldman Sachs and the rest of Wall Street that we too mean business.
