Are you tired of taxpayers being asked to pay for all of the housing/banking bailout programs? How’s this for a new idea in bailout financing?
Wall Street banks are on pace to pay out some $143 billion in compensation for 2010, just shy of their record year of 2007. But given the widespread layoffs of mid-level employees as a result of the financial crisis, average compensation set a record. At the top six banks, compensation rose 10 percent over 2007.By spending just half of that money elsewhere, the banks could modify the loans of every homeowner with an underwater mortgage, cutting principal and interest rates down to the current market value, according to a new report by critics of excessive compensation.The $143-billion figure represents total compensation, including salaries for secretaries and entry-level employees as well as mammoth senior-level bonuses. But salaries for lower-level financial employees have largely flatlined in recent years as executive compensation has soared. Compensation for bank tellers, for example, has risen a meager 5 percent in real terms since 1999, according to the Bureau of Labor Statistics.Wall Street banks are on pace to pay out some $143 billion in compensation for 2010, just shy of their record year of 2007. But given the widespread layoffs of mid-level employees as a result of the financial crisis, average compensation set a record. At the top six banks, compensation rose 10 percent over 2007.
By spending just half of that money elsewhere, the banks could modify the loans of every homeowner with an underwater mortgage, cutting principal and interest rates down to the current market value, according to a new report by critics of excessive compensation.
The $143-billion figure represents total compensation, including salaries for secretaries and entry-level employees as well as mammoth senior-level bonuses. But salaries for lower-level financial employees have largely flatlined in recent years as executive compensation has soared. Compensation for bank tellers, for example, has risen a meager 5 percent in real terms since 1999, according to the Bureau of Labor Statistics.
Of course, as soon as all those loans were modified to bring homeowners above water, the huge overhang of inventory, shadow and otherwise, would put downward pressure on prices again. The bailout wouldn’t repair the housing market. The only advantage to such a program is that at least this time, the cost would be born by those that caused the problem. [Since it only would take half the bonuses, only the fat cats at the top would have to pay. The tellers could hang onto theirs.]
I’m not advocating such a program, I’m just saying. What do you think?
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