Unlike B of A, Goldman Sachs appears to never have been in serious trouble as a result of the financial meltdown. If anything, they took a bit of a hit and roared back bigger and stronger. But as this NYTimes.com article illustrates, they are at risk of being the poster child of tone deaf / stupid American corporations. How so?
“Goldman Sachs is on pace to pay annual bonuses that will rival the record payouts that it made in 2007, at the height of the bubble. In the last nine months, the bank set aside about $16.7 billion for compensation — on track to pay each of its 31,700 employees close to $700,000 this year. Top producers are expecting multimillion-dollar paydays.”
How big is that? Apparently
“Goldman set aside nearly half of its revenue to reward its employees, a common practice on Wall Street, even in this post-bailout era.”
And I love this comment:
“Goldman executives know they have a public opinion problem, and they are trying to figure out what to do about it — as long as it does not involve actually cutting pay.
Lloyd C. Blankfein, Goldman’s chairman and chief executive, finds himself in the unusual position of defending a successful company in a nation that normally celebrates success.”
Of course, they would not be celebrating their success if the taxpayers of the United States had coughed up significant money to prevent Goldman and their counterparts from going under (even though some of them still have in the form of mergers and acquisitions).
So what is Goldman Sachs proposing? Well,
“”Goldman said Thursday that it would donate $200 million to its charitable foundation (that figure represents 6 percent of its third-quarter profit, or about six days of earnings).”
Now they are putting almost 50% of their annual revenue aside for bonuses, and 1.5% of their profit for charity. See something wrong here?
Then again, this canard comes up:
“But he said Goldman had a duty to its employees and to retain staff. By paying big bonuses, he said, the bank was trying to make a difficult trade-off between “being fair to our people who have done a remarkable job” and “what’s going on in the world.”
As always, my question is: where are the staff going to go? No where, that’s where. There is no where to go.
And then I love this:
“Goldman, Mr. Viniar said, was being unfairly singled out over its bonus culture. “Yes, I think that is too big a focus,” he said. “I would prefer people to be focused on the success of our business, how well we’re doing, and how well our people are performing.”
People! We should be happy for Goldman! Geez. Seriously, is this the best they can do? I thought the folks from Goldman were smart.
So, here’s what I think. Other banks, like Morgan Stanley are going to execute on reform, like “introducing three-year clawback provisions”. Whether this is still good is a question, but it is better than Goldman. To make a level playing field — corporations love level playing fields! — Goldman should be legislated to execute on the same reform that Morgan Stanley and others do. Smarter people than me can likely come up with all kinds of ways to rein in Goldman. But they need to be reined in and made an example of.
Otherwise, the next big crisis to occur, the tail (Goldman Sachs) is going to be wagging the dog (the people of the U.S.A.). (Although some would argue that they did that this time. And if they get away with this, I will believe them.)
No doubt with the Great Recession, travel has not been a priority with most people. But if you can afford to travel, now is still a good time. Even if you are concerned about the cost of things. For the NYtimes.com has a great rundown of 100 European hotels under $150/night in this article here: 
Smart People I Know 
