The Untouchables: Goldman and Chase
By Greg Hunter’s USAWatchdog.com
This week the Federal Reserve hit thousands of banks with wide ranging pay controls. The so called “Pay Czar” Kenneth Feinberg said that salaries paid to the top earning executives at some of the biggest bailedout companies would be slashed by 50% and capped at 500 grand a year. The companies taking the cuts are American International Group Inc, Bank of America Corp, Citigroup Inc, General Motors Co, Chrysler, GMAC and Chrysler Financial. The reason why Feinberg singled out these companies is because, according to him, they received “exceptional federal aid.” What about the “exceptional federal aid” Goldman Sachs and JP Morgan Chase got? I think Goldman getting at least 13 billion in the AIG bailout and getting paid 100 cents on the dollar for their exposure to the company was pretty “exceptional!!” Then there are toxic assets turned over to the Fed. We may never know how many billions of dollars of bad debt Goldman pawned off on the taxpayer because, according to the Federal Reserve, it is a secret.
Same goes for JP Morgan Chase. How many billions of dollars of toxic assets did it turn over to the Fed? Ditching billions in bad bets at little or no cost to the banks is “exceptional” financial help! Wouldn’t you agree? Remember the JP Morgan Chase, Bear Stearns deal? The Fed gave a total of 55 billion dollars to Chase to take over Bear. And get this, tax payers were put on the hook for up to 40 billion dollars in liability for the failed bank. I would call that pretty darn “exceptional” government help. I love the way one blogger put it, “JP Morgan got the money ($55 billion) and the taxpayers got the risk (up to $40 billion), a ruse called the privatization of profit and socialization of risk.”
Of all the big banks Goldman and Chase have probably gotten the most help by taxpayer largeness. Both Goldman and Chase would have also been bankrupt if it were not for the many sweet heart deals and government handouts given to them. Yes these two institutions did repay TARP money but they have been helped out in so many other ways. In my mind Goldman and Chase executives should have their pay cut in half and capped at 500 thousand dollars a year just like the 7 big companies named above. But that will never happen because they are the untouchables.