FROM CNN's Jack Cafferty:
High gas prices, slumping home sales and declining values and the whole sub-prime credit mess have combined to make 2007 a pretty tough year for a lot of people. The latest CNN poll shows 57% of Americans think the economy is already in a recession. But you wouldn't know it on Wall Street. Bonus checks at the big investment banking firms are up 14% this year. Four of the biggest investment banks alone - Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Stearns - will pay out $30 billion in bonuses.
Goldman Sachs CEO Lloyd Blankfein will get $70 million, and Lehman Brothers' CEO Richard Fuld will get a $35 million stock bonus. Morgan Stanley CEO John Mack and Bear Stearns CEO Jimmy Cayne are forgoing their bonuses this year. But they'll probably be okay.
Mack got more than $40 million in stocks and options last year. Cayne received a bonus of more than $33 million.
Average Americans who invested in these banks paying out these big bonuses are probably scratching their heads. If they held stock in most of these companies, they saw values plunge up to 45%.
Here’s my question to you: Is it wrong for Wall Street to reward its employees with big bonuses this year?
Interested to know which ones made it on air?
Lorelei from Boynton Beach, Florida writes:
It sure is a disgrace to give such big bonuses to Wall Street. They don't deserve them. The small investor is being squeezed out and once again the middle class is taking it on the nose. There are a great many things wrong in America and Wall Street is one of them and Congress is another.
Greg from Pennsylvania writes:
Life isn't fair, Jack. In a perfect world there would be no poverty, no one would go hungry or homeless, people would be hired for and work in the jobs for which they were best suited, good performance would be rewarded and poor performance would be penalized. In reality, corporate executives are outrageously paid, receive monstrous bonuses for mediocre work and multi-million dollar severances after losing billions for the companies they run. It's as futile as complaining about the weather.
Goldman Sachs CEO, Lloyd Blankfein, deserves his massive bonus for making risky, but shrewd decisions that have dramatically increased profits for their firm. Under Blankfein's watch, a tiny group of Goldman traders were allowed to bet against the subprime market, which resulted in nearly 4 billion dollars of profit. For the other firms that have suffered greater loss, keep in mind the employees at investment banks work insane hours, often 7:30 am until midnight. It makes sense to give them a big bonus.
Anthony from Staten Island, New York writes:
Instead of granting bonuses to its employees, Wall Street should return the money to the U.S. Treasury to pay off the amounting deficit we have from this Administration. They've seen this surplus of money because of the outsourcing and tax cuts for the wealthy. Or maybe we should allow these CEOs to continue to gut these companies. That's what Curious George seems to want.
Their piggish behavior is one part of the larger problem. Corporate boards of directors put the shareholder third: after the CEO and themselves. Corporations have used their riches to promote laws and regulations that would put shareholders in control of the board. Sadly, we have boards who serve at the pleasure of the CEO.
Robert from Tampa, Florida writes:
This story is a synopsis of the Bush economy: The rich get richer while the middle class get poorer.
Maybe Jack will read yours tomorrow.