WASHINGTON — In early 2010, Goldman Sachs announced two blockbuster numbers: profits of $13.4 billion for the prior year and compensation of $16.2 billion — the equivalent of about $500,000 for each employee at the Wall Street titan.
All of this lucre, of course, came courtesy of a massive federal bailout of Wall Street that helped keep Goldman and the nation’s other commercial and investment banks afloat in 2008 and 2009, when the worst financial cataclysm since the Great Depression began to ravage the economy. Taxpayers were footing the bonus bill.
When news of Goldmanesque bonuses first sparked public outrage, both Wall Street and the White House combated the criticism with a persistent argument: Yes, it might be deeply frustrating to see taxpayer dollars used to further enrich already wealthy bankers, but these bonus deals were were contractual obligations and America is a nation of laws. You just can’t tear up contracts, the argument went. So, with few exceptions, the bonuses stayed.
Yet now, with state leaders planning pay cuts for teachers, firefighters and other public workers, contracts aren’t described as so sacrosanct anymore.Â To read more, click here.