Big Banks: Unions Stopped Fighting, and the Entire Left Got Punched
The Times of London reports that Lloyd Blankfein, head of Goldman Sachs, will receive a bonus of $100 million for 2009. I’m with Felix Salmon — color me dubious:
It goes without saying, of course, that Goldman’s rivals couldn’t possibly know what Blankfein’s bonus is going to be. And given Goldman’s record-low compensation ratio this year, along with the bank’s cap on bonuses in the UK, it frankly boggles the imagination that he’s going to get anywhere near $100 million. Goldman knows that bonuses are a hot-button issue politically, and it’s going to keep them (relatively, by its standards) modest for 2009.
Blankfein — who hardly needs the money — knows full well that he can’t, this of all years, pay himself the largest bonus ever received by a bank CEO in the history of the world. As a result, his bonus is going to be less than the $68 million he made in 2007. It’ll probably be in the eight figures, but it won’t be anywhere near $100 million. No matter what Helen Power heard from gossipy bankers in Davos.
But it really doesn’t matter. The steady drip-drip-drip of these kinds of stories does incredible damage to the administration and to the Democrats, who now own the bank bailout (despite the fact that TARP was first authorized under George Bush). A steady erosion of public trust continues to be fed by the things they are guilty of: being too chummy with bankers, a failure to do anything they promised about the AIG bonuses (that continue to be paid out), the feeling that the banks were rewarded for criminal behavior while millions are losing their homes.
As unemployment continues to soar, these stories are the poison that is killing the Democratic party’s chances in 2010.
Back in the day (2008) the unions were waging aggressive campaigns against private equity groups that were buying up companies, slashing their staffs, breaking their union contracts, selling off their assets and reaping millions. They led the way on the issues of corporate governance, Wall Street accountability and the Bush bailout that gave banks a blank check.
But just as the tea parties were getting going in April of 2009, the White House met with bankers in the wake of the AIG scandal who told them to put the kibosh on the harsh anti-bank rhetoric:
The banks’ message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.
And so calls went out from the White House to the unions to put a pin in it (they were holding EFCA over their heads).
Which left the field wide open for the tea parties (who were being heavily juiced by Fox News) to reap all of the economic discontent. “Our side” abandoned the field.
I remember standing out in front of the White House with Bill Greider, David Swanson, Jason Rosenbaum and three Code Pink people for the protest organized by A New Way Forward in April, the day before the tea party protests began. Bill and I shook our heads and said “this is bad.” There was no institutional support coming from liberal groups whatsoever.
And for millions of people justifiably pissed at the banks, the tea parties became the only game in town.
So all the independents, who continue to be quite predictably pissed off at the banks, are steadily drawn in. As Fox — and anybody with half a brain — knew that they would be.
Can you imagine a world where the unions had led the way for the left, and now had the approval rating of the tea parties? Yeah me either, because Fox is never going to give them 24 hour glowing coverage.
But the message that the unions had about corporate accountability was coherent. The idea that the GOP will do anything but unleash whatever vague restraints that exist on corporate power is ludicrous.
Sadly, the unions stopped fighting at the request of the White House. And the entire left got punched.