As reported by Bloomberg:
Ten million dollars, $15 million, $25 million, more: Big money is back on Wall Street.Not since the late 2000s, when lavish bonuses rained down before and after federal bailouts, have pay packages at U.S. investment banks swelled as much as they have right now...After years of restraint, bank leaders are once again projecting a “whatever it takes” approach to compensation, vowing they won’t be outbid for top performers, lest they lose an edge in a hot market for trading and deals. That has their employees in Manhattan uncorking $2,000 bottles of wine at the fastest pace in years, buying bigger homes in fashionable TriBeCa, and snapping up yachts.It’s a long-awaited moment for a generation of rising executives who’ve spent years missing out on the riches reaped by those before them...In recent days, Dimon, Solomon and Morgan Stanley’s James Gorman were each awarded about $35 million for their work last year — more than any of their banks have lavished on a CEO since 2007. That, in turn, has lifted the ceiling for money makers within those firms...As commerce shut down in 2020, government programs and Federal Reserve stimulus propped up the economy, unleashing a frenzy of trading and corporate dealmaking.Investment banks, worried about the optics, showed some restraint when setting bonuses at the end of that year. But as the boom rumbled into 2021, Wall Streeters demanded more and began defecting, pushing firms to pay up.“As a full-blooded progressive, I can appreciate how the public would feel cynical about Wall Street’s efforts,” said Jon Corzine, the former Goldman CEO and ex-New Jersey governor. “But it is a necessity in the context of the competitive nature of hiring and retaining the best talent.”..At Babbo in Greenwich Village, sommelier Juan Pablo Escobar keeps adding to the list of big-ticket Barolos customers have ordered in the past week or so, many costing a few thousands dollars — such as 1.5 liters of 1985 Bartolo Mascarello for $3,700...At Lola Taverna in SoHo, “we had a loyal client buy two magnums of Cincoro Anejo to share with everyone in the house,” co-owner Cobi Levy recently recalled. The price for the tequila: about $1,850 apiece. “He had just closed a monster deal.”
Obscene.
ReplyDeleteMaybe we should have been bankers?
ReplyDeleteI think this image is a better representation, because in truth the money isn't running out after only a few top glasses, as in the case with champagne; there's plenty of wealth for all, but not if it's being siphoned off:
ReplyDeletehttps://www.young-economist.com/post/the-myth-of-trickle-down-economics
I don’t think you understood the cartoon. And if the wealth was being siphoned off where was it going? Outer space? It’d be going back into that top glass.
ReplyDeleteFollow the link I provided.
DeleteI don't have a problem with people making $35mm; I have a problem with people making $18,000.
ReplyDeleteBut if the $35mm executive could somehow manage to scrape by on a mere $25mm per year, a thousand employees could get a raise to $28,000 per year.
DeletePerhaps I was too subtle in making my point. There are many other ways to ensure a living wage for your workers, besides taking it from the top earners.
DeleteWe could try to fix the broken economics of America's medical system by asking all physicians to take a 90% pay cut. However, I suspect that wouldn't fix the system, and would likely make things worse. There are other ways to fix the problem that will work better.
Could you link to some plans you think are a better idea? Personally, I think the fact that top CEO wages have skyrocketed during the past decades while most workers wages haven't (despite productivity gains) is cause to restrict those making $35mm but I'm not sure what you see as better options.
DeleteThere are many other ways to ensure a living wage for your workers, besides taking it from the top earners.
DeleteNo, there's not. A dollar a company makes can only be spent once. They currently choose to spend that dollar on CEO pay instead of worker pay. Somehow "the market" demands that. And they also choose to spend another dollar to make sure that "the market" does not require them to pay their workers more.
By the way. Who's in charge of this "market"? Can I talk to them? Because I'm tired of being told to make sacrifices so that "the market" does better. It's like a freaking old-fashioned god that you must sacrifice your best cow to and go hungry for.
The self-description of "Full-blooded progressive" is supremely irritating.
ReplyDeleteNot sure why there is the sour grapes here. If folks would simply do what I did, they too could be billionaires. All I did was make $100,000 a day for a little over 27 years and--boom!--BILLIONAIRE!
ReplyDeleteOr you do it like a friend of mine. He worked very, very hard for years...then his dad died and left him a hotel chain.