The Homa Files

I’m a life-long hard core capitalist. 

But, Goldman Sachs is shaking my belief structure.

They were at center stage in the financial meltdown,

They ran to the gov’t for a rescue package — even if they didn’t need the money, they took it  — and they solicited and got a favorable redesignation as a bank.

They reaped a windfall when Paulson & crew refused to extend comparable advantages to other financial culprits.

Now, they have the audacity to pay themselves mind-boggling reward bonuses.  Even their asleep-at-the-switch shareholders are whining.

WSJ: Goldman Holders Miffed at Bonuses:
Some Investors in the Stock Urge That More of the Riches Be Passed Along to Them
http://online.wsj.com/article/SB10001424052748704533904574545981008841004.html

Last year, reacting to some AIG bonus payouts, Congress toyed around with a  90% tax rate on bonuses to TARP supported companies.

WSJ: House Passes Bonus Tax Bill: 90% Hit Would Affect Major Banks
http://online.wsj.com/article/SB123745823318182841.html

At the time, I argued that the tax code shouldn’t be used for punitive purposes, that contracts are contracts, and that execs should be paid to the terms of their contracts even if there were unintended consequences, e.g. big bonuses for poor performance. 

I’ve changed my mind. 

A 90% punitive tax on the Goldman bonuses strikes me as just about right.

Dante must have a special place in his Inferno for these soul-less knuckleheads.

This entry was posted on November 23, 2009 at 7:59 am and is filed under Financial Crisis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.