May 17, 2022

Public Workers Prove That Bankers Have No Monopoly On Greed

The President’s criticism of “fat-cat bankers” has been relentless.  Since taking office, Obama has seized every opportunity to flame the public hatred for bankers by portraying them as being greedy and insensitive.

Obama Criticizes Fat-Cat Bankers-Bloomberg – Dec 14, 2009 –  “I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street,” Obama said in an interview with CBS’s “60 Minutes” program.

“The people on Wall Street still don’t get it,” Obama said. “They’re still puzzled why is it that people are mad at the banks”.

Recently, Obama’s “pay czar” again publicly excoriated bankers for their greed.

TARP Pay Czar Criticizes Big Bank Bonuses – LA Times – July 24, 2010 – The Obama administration’s pay czar on Friday came to the same conclusion about fat Wall Street bonuses that average Americans have already reached: There’s no logic behind them, except greed.

Still, the findings sparked outrage from some in Congress, renewed calls for reining in Wall Street compensation and raised the prospect of re-energized efforts to impose hefty taxes on such bonuses.

President Obama said the “lavish bonuses” highlighted the need for provisions in the recently enacted financial regulatory reform that address executive compensation…

Does Obama really care how much bankers get paid or is he simply seizing a political opportunity to increase his poll numbers?   As usual it’s not clear what Obama’s real values are, but flogging bankers hasn’t helped, as his poll ratings drop to all time lows (see Obama’s Approval Ratings Plunge).

Perhaps the cynicism is unwarranted – maybe bankers are indeed “greedy” and “just don’t get it” – maybe Obama truly feels that bankers are being unjustly enriched at the expense of the public.  I would like to believe Obama’s motives are pure, but if so, where is the moral outrage when it comes to public officials blatantly looting the public treasury?

Although disclosure of public officials giving themselves outrageous pay and benefits in Bell City, California has outraged the public, not a word of recrimination has come out of the White House.  The shameless looting of taxpayer monies  by public officials sworn to work for the interests of those who elected them is almost beyond comprehension, as reported by The Wall Street Journal:

For an illustration of everything wrong with the nation’s public pensions, look no further than the compensation in Bell, California.

Bell City Manager Robert Rizzo stepped down three weeks ago after news broke that he was making $800,000 a year to oversee the blue-collar town of 40,000. Now the Los Angeles Times reports that records show Mr. Rizzo’s compensation was double that amount—some $1.5 million a year. That number included the 28 weeks of vacation and sick time Mr. Rizzo was allowed annually—at a cost of $386,000. Good work, if you can get it.

Mr. Bell’s comp also spiraled up thanks to the city’s contributions to his pension and other retirement plans. Mr. Rizzo is in line to collect at least $600,000 annually in guaranteed pension payouts upon retirement, thanks to California’s generous formulas based on time served and compensation. Those payouts—which could add up to tens of millions of dollars over Mr. Rizzo’s lifetime—help explain why the Golden State is currently $6.2 billion in the hole for retiree pension and benefit payments.

These paydays are the inevitable result of the dominance of government unions in city and state politics. While most private workers have 401(k)-type plans that rise and fall in value with economic growth, unions negotiate guaranteed payouts that stay lucrative whether or not the cities can afford them.

Bankers are not elected by the public and do not directly work for the taxpayers.  Bankers may owe the public some accountability, but elected officials should certainly be held to a higher standard.  If Mr Obama is looking to improve his poll standings, how about some outrage over public officials who breach the public trust and enrich themselves at public expense?   Mr Obama should take a page out his banker’s book and propose taxing Mr. Rizzo’s ill gotten gains at 100%.

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