Bloomberg Poll Finds That 88% Of Americans Say Bonuses At Banks Should Be Banned Or Taxed At 50%

Tyler Durden's picture

According to the latest Bloomberg poll, a whopping 71% of respondents (many of whom are likely bankers) have said that bonuses at banks receiving bail out funds (that's all of them) should be banned this year, and another 17% believe that a 50% tax should be imposed on all bonuses exceeding $400,000 (which, in another record bonuses year, will likely be most of them). This goes back to our thesis presented over a year ago that since Wall Street is essentially a government utility, it should be treated as one, with set IRR targets and caps, and bonuses for bankers, whose every action results in a government bail out sooner or later, should be closely controlled and scrutinized in concordance with traditional utility metrics. Then again, in keeping with the spirit of the middle-class wealth transfer program so well presented by Ben Bernanke over the past 5 years, this proposal has about a snowball's chance in hell of passing. This is doubly so now with a Republican controlled Congress whose allegiances to the banker class are not exactly top secret.

From Bloomberg:

“The American people bailed them out and immediately they went and paid their employees very large bonuses,” says poll respondent Michael Robertson, 43, of Wayne, Michigan. “I don’t believe they should have a bonus at all for a while.”

Robertson lost his job in retail management in the auto parts industry three years ago when his company cut workers and is now in school studying computer electronics. “Of course I’m bitter about this Wall Street thing,” he says.

Cash bonuses to securities industry employees in New York City grew 17 percent, to $20.3 billion, for work in 2009, according to estimates in a report last month by the New York State Comptroller’s office. While the cash bonus pool for 2010 will probably be smaller, the average bonus may be bigger because after job losses the money will be divided among fewer employees, the report said.

The Bloomberg poll of 1,000 adults 18 and older reflects continuing public animosity toward the bailouts, which became a potent political issue that helped defeat dozens of lawmakers from both parties in congressional elections this year.

Seven of 10 Americans say it’s Wall Street’s turn to help bail out the government Treasury, supporting a tax on Wall Street profits as a way to reduce the $1.3 trillion deficit. By comparison, 43 percent favor a freeze on spending for items like education and medical research, 33 percent would cut farm subsidies, 25 percent back a new tax on gasoline, and 15 percent would reduce benefits in the Medicare health insurance program for the elderly.

“I know that some of the tax I pay when I buy gas for my car, and on my income, was somewhere written into a check to keep these companies from imploding,” says poll respondent Steven Previll, 33, a maintenance worker from Harrisonburg, Virginia. “There’s an amazing amount of money being made on Wall Street. It would be cool if we could take some of that money and reinvest it in the country.”

Bolstered by bailouts, Wall Street earned $61.4 billion in 2009, almost three times more than in 2006, according to the New York State Comptroller’s office report. This year’s profit, projected at $19 billion, still would be the industry’s fourth largest, the report said.

The average securities industry wage in New York City fell more than 20 percent last year, to $311,000. That was still five times the average pay for other private-sector jobs in the largest U.S. city, the comptroller’s office said.

And as we wrote previously, none other than the New York comtroller now expects the average bonus to be larger than 2009, courtesy of headcuts in the industry. Which is why feel free to ignore disinformation campaigns by the likes of Morgan Stanley that they will be actually cutting bonuses: the bank knows all too well that with the rest of the Street hiking its comp for 2010, the last thing the firm can afford, which is now the administration's darling (GM IPO), and the ECB's indirect sovereign bond broker, is an exodus of employees to its key competitors... or whatever is left of them.

 

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TheGreatPonzi's picture

7% of slaves and bankers in this country? Quite a lot.

BearishFeijoadaSushi's picture

bankers' families and relatives probably.

erik's picture

that 7% probably doesn't include a lot of NRA members.

Widowmaker's picture

Is 88% a social-barometer of some sort?

pamriallc's picture

better to consider that not all "bankers" are your local bank tellers.

also note that no one is telling sports stars to give their salaries back when the team loses, either.  the poor quality of movie you may have seen in which some actor was paid $20mm for what was a poor script.

when in the investment advisory business, I have to use *brokers* and yet if they do well for me, I don't mind that they have a fee, as well.  their "institutions" though... their "company" may be another story.

in this case I have a hard time blaming the employee any more than I blame a solider somewhere who is doing his job in an unpopular war.

what we have here is an unpopular war.  the job continues to be the same:  identify spectacular investment opportunities and acquire them for your family, or in my case, your family office.

shawn a. mesaros, pamria, llc

TruthInSunshine's picture

better to consider that not all "bankers" are your local bank tellers.

also note that no one is telling sports stars to give their salaries back when the team loses, either.  the poor quality of movie you may have seen in which some actor was paid $20mm for what was a poor script.

when in the investment advisory business, I have to use *brokers* and yet if they do well for me, I don't mind that they have a fee, as well.  their "institutions" though... their "company" may be another story.

in this case I have a hard time blaming the employee any more than I blame a solider somewhere who is doing his job in an unpopular war.

what we have here is an unpopular war.  the job continues to be the same:  identify spectacular investment opportunities and acquire them for your family, or in my case, your family office.

shawn a. mesaros, pamria, llc

You're way off base, Shawn.

The athlete, the actor/actress, the film with shitty script - the market will render its opinion on these things, not interventionist government policies, incredibly inefficient and even hostile to what would be normal capital flow, as in the case of subsidies and 'perks' towards a government protected-bailed out-subsidized component of the economy, which sucks money from productive enterprise and heaps it on a highly inefficient and  destructive one.

So let people vote voluntarily with their dollars as to whether an athlete or actor is worth the price of admission, but don't force people to buy a ticket to one they don't want to see and is rightfully terrible and then say "enjoy the shitty film/game, taxpayer/serf."

It's even worse, though. At least with a bad show or game, one doesn't also get kicked in the nuts on the way out to find that the government pickpocketed their wallet, stole their car and broke into their house.


pamriallc's picture

consider that you have all of the same consumer options with your banker.

  1. don't use or refuse to use credit
  2. interest rates are at zero so owning a bank account doesn't make you richer with interest
  3. keep your $1000.00 in a free checking account and pull the cash out every month that's left over, buy bullion

no one legislates that I *must* have a bank account.

I personally advise clients to leave their cash at my Firm and leave the banks with just enough cash to cover expenses.  The rest is in t-bills, short muni's and only the bluest of blue chip equity with some international mixed in.

governments have been subsidizing bankers, farmers, etc.... for now thousands of years.  that doesn't make it "right" but there are ways to exercise your rights as a consumer.

  1. don't use credit
  2. keep spare cash in metals or some other convertible asset
  3. hold all brokerage assets on the "cash" side of the account so your broker can't lend your securities on margin
  4. leave minimal deposits with your "bank" account which again, minimizes their ability to earn a living.

Sovereignty is a State of Mind--- Not a Government Imposition

Shawn A. Mesaros, Pacific Asset Management   (Pamria, LLC)

 

TruthInSunshine's picture

While I agree with much of the above, you've deflected the main and larger point here (for all you or anyone knows, anyone bitching about the injustice of current events may also be simultaneously making lots of money - despite those injustices).

The point is not what one should do to try to be profitable in a time of relatively massive inefficiencies and government interference in American capital markets; rather, it's that government is making American capital markets massively inefficient and causing massive malinvestment through massive interventionism.

The cherry on top that gets the anger stoked is that a lying, thieving and loathsome class of individuals has parlayed their influence over legislators and the central bank (many of whose members hail from the thieving class) to benefit themselves via direct harm done to truly productive and efficient actors in the economy (this would be the use of taxes to enrichen what should have been failed banks, investment firms and Wall Street institutions).

Don't expect a good, healthy market result from this menacing and maniacal interference in markets by meglomaniacs.

Bernanke & Team Treasury are merely kicking the can and compounding the problems.

rocker's picture

"Kicking the Can"  Please. What the Fuck !!!  If he is kicking the can, why are the middle class eating shit ???

Bernanke is making millionaires billionaires, those being the elite PD's and CB's with a few CEO's and hedge fund scumbags who got the call to help with each POMO grunt.  Don't forget the hidden derivative players ZH forgot to ever talk about. They are the biggest scumbags of all.  Got Yacht. Got Island. Got three or more mansions with slaves.

If you don't have those three, you are not elite.

Using the word slaves as being anybody who works for the elite to maintain the status quo. No disrespect intended to anyone but the elite.  

If you don't have those three, you are not elite.

dnarby's picture

WTF?!

If my sports team loses, it doesn't affect anything other than my feelings towards my team, and they don't bribe my gov't to bail them out with my tax money!

Other than that, you're doing OK though.

unwashedmass's picture

given that the bonuses are essentially stolen money, from the Treasury, I think a 50% tax is exceedingly generous.

So the robber walks, gets caught, and you let him keep 50% of the take, is what this is saying.

NotApplicable's picture

What you're saying is that laws don't matter, but rather using force to restore a sense of "fairness" does.

Every dime that left the Treasury did so in a legal manner, thanks to the Wall St. lapdogs known as public servants.

Yet instead of insisting that DC stop its role, you advocate even further lawlessness on their part? Hopefully you can see the flaw in your theory and now realize exactly why and how much we are all fucked. It is zealots like yourself that create the very ground for every "Enabling Act" that comes down the pike. To expect criminals to provide goods and services (like justice) is an absurdity. All you do is to further empower their criminal ways.

Bring the Gold's picture

Expecting anything good out of the federal government at this point is a fools errand to be sure. Your argument about legality seems a tad specious given that many awful things have been "legal" throughout history and many good things illegal.

I feel like you ended up with a catch 22 situation. The bullshit legal giving of money was legal so we shouldn't change the law to take back the bullshit because it encourages more bullshit laws? I'm confused.

I agree we seem to be surrounded by slippery slopes, but what course are you suggesting we take?

midtowng's picture

Speaking of empowering criminal ways, by letting the bankers keep the taxpayer money, that is exactly what you are doing.

jakethesnake76's picture

yes let's steal from banks cause we'll feel better lol socialism was winning ( it's had it's day)

so first you bail out banks then you can control them right .

midtowng's picture

Taking the money back that was stolen from you isn't stealing.

TruthInSunshine's picture

Bankers & those in the financial industry who would not have jobs, BUT FOR BEING BAILED OUT, and who are now receiving near-record or record compensation, IZ GONNA GETS PAID!!!!

...no matter which party controls the Congress or Executive Branch.

(and let's make a distinction between the small town bankers and those deemed too small to steal, from those who are too big to NOT steal)

No One's picture

What the US sheeple do not know is that the banks NEED to keep paying those bonuses to keep the "talent", and to prevent M.A.D. 

 

/s

 

TruthInSunshine's picture

Are you saying those who work at the upper echelon of the Vampire Squid have get out of jail free cards, or in this case, get whatever you want as long as you keep the scam we've been running on the QT cards?

These noble men and women are doing God's work.

milanitaly's picture

Bonus only a moral item but stock options are the real devil of the market

rawsienna's picture

Already taxed at 50% in NYC if you include state and local. Bonuses should not be banned but rather payable in stock along with some high strike calls that do not vest for at least 3 years.

mule65's picture

Yes, bonus tax is very close to 50% everywhere so they just pay twice as much to compensate for taxes.

Drag Racer's picture

I think they are looking at this all wrong. Since they so called 'earned' those bonuses through fraud, shouldn't they pay them all back from last year with an added 50% fine.

hidingfromhelis's picture

I prefer RICO and treble damages.  In a just world...

BotanyBabe's picture

50%? Try 90%. And no potatoes.

UGrev's picture

I know I'm going to get junked.. so I'll just say it. 

1. I hate these fuckers as much as you do.

2. It is completely un-American to steal (not that Americans don't steal, clearly it is fact that some do, but it is not something we promote, condone or would allow to go unpunished).

3. It is equally un-American to try to create some law that caps a persons bonus or taxes it. What's good for you is good for everyone else. 

That being said, I think people wouldn't have a problem with banker bonuses if they weren't fucking us up the ass with a big veiny schlong. This is a slippery slope and if we tie too much emotion up into it.. it could come back to bite us in the ass.. think Patriot Acts. 

TruthInSunshine's picture

I don't care if a banker or anyone, for that matter, gets a billion dollar bonus - if they earn it (formerly known as NOT subsidized - or, in better days, NOT subsidized and earned on the true MERITS).

 

Widowmaker's picture

You raise a strong argument with "subsidized."

UGrev's picture

To those who junked me: You are no better than those "elites" who seek to make rules that stack everything in their favor. You're just doing it out of spite and anger instead of greed an id centric reasons. Think about it. Creating rules that favor you "just because", is very un-American. 

weinerdog43's picture

Hell yes I'm spiteful and angry.  What am I supposed to feel...grateful?  Screw that.  I'm not Jesus, and when people steal from me, I get angry. 

UGrev's picture

I'm spiteful and angry too. In fact, if you were in line ahead of me to push these fuckers off a cliff, I'd ask you if I could help to see if we could make an extra big splat. 

But you have to be better than them, brother.. you can't throw your arms up and say "fuck it, since everyone's cheating, why shouldn't I?".  Where does that land you? I can tell you that it won't be in the line of those doing the pushing off the cliff.. 

Be angry.. be mad.. I encourage you to be human in that respect and you have every, clear, right to do so. Just don't be them.. or like them. 

DaveyJones's picture

He got pretty pissed at the temple. And that thing about the meek inheriting the earth....they did a twist on it.

PulpCutter's picture

I couldn't care less what bonuses the bankers get, and I don't think it's my, or the government's, business.

On the other hand, I think the whole discussion is a distraction from the larger issue - that the taxpayer is STILL backstopping the gambling that the bankers do.  We need to let them bear the responsibility for their foolish bets, no matter what the collateral damage.  Reinstate Glass-Steagall.  Until we do, we're just playing games with ourselves.

Worrying about bonuses, while providing the corrupt system that makes those bonuses possible, is just a distraction. 

Bring the Gold's picture

Great points about the bonuses being a side show to the real problem.

Also good points above about watching out for a Problem-Reaction-Solution style law to get passed that seems to address the bankers, but just creates more Tyrrany. Ugh, things are so far gone it seems like every possibility to change things is extremely dangerous in its own right. Not changing things of course is not an acceptable possibility either. What a weird period of time this is.

midtowng's picture

It's the same issue. There is a direct link between the taxpayer backstop/bailout and those bonuses.

Al Huxley's picture

If Americans want bank bonuses banned or taxed 50%, then they should have purchased some representatives in congress to do their bidding.

DaveyJones's picture

but the Supreme Court just said we now have to compete with the corporations

Widowmaker's picture

They affirmed that if you want to break the law, incorporate and disclosure/accountability magically vanish.

weinerdog43's picture

Exactly.  Now everybody get back to work.

Bring the Gold's picture

Not magically, just you know, retroactively. 

Retroactive laws are so pernicious.

Raynja's picture

Just because the candidate has wool over their eyes does not make them sheeple

chindit13's picture

One hundred percent tax on all bonuses paid by any financial institution with assets greater than $500 billion.  Since the authorities are not ever going to break up the TBTF banks, let's give the banks an incentive to break themselves up.