Last night, my wife and I were watching the NBC news program, Dateline. The segment we were most interested in was the spending of the $350 billion of the $700 billion financial bailout. You remember that one. The one that Congress and President Bush passed back in October, 2008, when it was clear that almost everyone in the US didn't want.
As taxpayers, we were told that this would free up money and provide business with loans they need to get the economy started again. What happened? The money never got pushed into the economy. CEOs got massive bonuses for running their companies into the ground. As for me, I got laid off. So, it didn't work.
According to the program, the government is about to release the second half of the $700 billion to the banks. This time stipulations and restrictions are being considered. The first release of money to the banks had no restrictions. The government relied on the honesty and integrity of the banks and the management to to the right thing.
As Ben Stein said in the segment, "It is putting a child in the room alone with a big dish filled with candy." Yes, sir. It certainly was. Citigroup canceled their ordered for a $50 million private jet, but still continued to spend $400 million on a 20-year contract to pay the New York Mets for the naming rights to the team's new stadium in Queens — "Citi Field." Citigroup will also stop dividend payments for the next three years and curb certain executive compensation, but they will continue with the spending of the $400 million. I guess some of the $350 billion went there.
John Thain at Merrill Lynch spent a $1 million to spruce up his office. I guess we know where more of the money went. I should be fair. It takes a lot out of CEOs to swing a golf club while holding a martini glass and watching the employees walked out of the building. They should get every perk possible and then some. Needless to say, it will be at the expense of the employees and shareholders.
Where are the Boards of Directors? They are supposed to be watching over the companies and controlling the spending? I guess they are too easy on the CEOs. The board of directors at my company weren't easy on me. They had no problem ordering someone else to kick me to the curb.
In the course of the segment, one analyst said that some of the CEOs are wondering how they will make ends meet at home when their salaries drop to $8 million a year. How will they survive? I guess you will have to cut back on the "fluff and fold" services and only have 1 maid and 1 nanny. Ouch, that will smart. No more shopping at Tiffany's. It will be strictly Macy's from now on. I feel so bad for them. I guess you will have to trade in your LandRover for a Lexus. How shocking? I don't know how they will hold their heads up in pubic at the country club.
I guess the CEOs will get a very, very small glimpse into my world of cutting back.
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