Rudy Giuliani, who seems to have just defended exorbitant Wall Street bonuses as a welfare for the super rich.

(via squashed)

I think the most important thing here is that according to most economists, giving money to the wealthy in a time of economic crisis is ineffective because the money will not be spent and therefore will not go back into the economy. The wealthy go into crisis mode and save, because they can save. The only people who will spend in a time of economic crisis are those who are worried about paying their bills, those who have no other choice. Economically speaking, big bonuses for the already wealthy would be the opposite of productive right now.

(via robot-heart-politics)

Robot Heart makes a very concise (and empirically correct) argument. I alluded to this in Why Food Stamps Work. Rudy Giuliani is full of it. There just aren’t any good justifications for wall street bonuses for firms that were bailed out by the taxpayer.

I’m surprised there haven’t been more clawbacks. A lot of hedge funds and private equity firms have clawback provisions. I thought more of the investment banks did. Making 10 million dollars might entitle someone to a million dollar bonus, but if the strategy then plays out that 9 million dollars of that were lost, 900,000 dollars from the bonus should be taken back. If 15 were lost, the entire bonus should have been recaptured, and the person responsible should be fired. I’m not making a legal argument here, I’m just appalled that these guards weren’t in place.

On the other hand, here’s a big F*ck You to the politicians for bailing them out without any such strings attached. I’m mad at them, not the wall street firms. As far as I know, the wall street firms had their contracts in place for their bonuses, and the government just shoveled the money into the system. You want a justification? That’s the only one. They got the bonuses because they were legally entitled to them, and the taxpayers will play the part of the sucker because the government didn’t make contractual changes a precondition for the bailout.