February, 2009 archive

On the other side of the Big Pond (for perspective, one pound UK = a little less than one and a half dollars US):

The Guardian has revealed that the board of HBOS (the initials are apparently meaningless; it was a British Citigroup type thingee until it failed and got eated–ed.), which yesterday reported a £10.1bn loss for 2008, may have walked away with combined payments of up to £4.5m. None of the executives at HBOS were offered a place on the board of the merged group after Lloyds TSB rescued the collapsing bank.

Most of the focus last night was on Peter Cummings, the executive responsible for the HBOS division that caused huge losses. He is thought to have received one year’s salary and benefits of £800,000 when he left the bank last month and started receiving his £350,000-a-year pension at the age of 53. Executives close to 55 are entitled to have their pensions topped up, which suggests that Cummings’s £5.9m pension pot will have been enhanced.

The Booman reminds us of what tax rates used to be.

Note that he is not recommending returning to Eisenhower-era marginal tax rates; he is simply giving his other comments some perspective.

Nevertheless, this passage–almost an aside in the context of his larger article–illustrates why Republican Economic Theory (AKA the Laughable Curve), the theory that the cure-all for society’s ills is to make the rich richer, fails. The theory denies human nature.

The money doesn’t trickle down; it trickles out:

I want to ask you if you have ever looked at a chart of the highest marginal tax rates since the income tax was created in 1913? Take a look because it’s instructive. Obama has made some sweeping proposals, but he hasn’t proposed restoring tax rates to anything close to what they were for the first six years of Reagan’s administration, let alone the 91% rate that prevailed under Truman, Eisenhower, and Kennedy. Ask yourself a question. If every dollar a CEO made over $500,000 was taxed at 91%, would he or she bother asking for 20 million? Would any board even consider giving 18 million to the government just to give two million to their CEO? Of course not.

It’s the Republican way.

If they can’t make the rich richer, they will still shaft the poor.

This is not a commentary on the stimulus bill. Whether it will undo the damage of years of Republican rule is still a great unknown.

Rather, this points out what this kerfuffle reveals about Republicanism.

Deadender Republican Governors are talking about rejecting portions of the stimulus bill.

Not surprisingly, the portions they are talking about rejecting are the portions designed to help the unemployed.

Nothing better shows that the Republican Party does not care about working–or in this case, out-of-working–persons who are in that condition because of Republican Economic Theory.

John Cole sums it up.

The Republican Party–The Party of Privilege since 1868. A pox on the lot of ’em.

Not getting no more toasters from these folks. They’ve been nationalized and given to someone else.

Security Savings Bank, Henderson, NV

Heritage Community Bank, Glenwood, IL

You can bank on it.

The days of the little match girl appear to have succumbed to invitro fertilization.

Now it’s big match girls:

Drawn by payments of up to $10,000, an increasing number of women are offering to sell their eggs at U.S. fertility clinics as a way to make money amid the financial crisis.

’nuff said:

Banks insured by the FDIC posted a collective loss of $26.2 billion in the fourth quarter of 2008, the agency said Thursday, as the percentage of charged off loans tied a quarterly record of 1.91%.

The grim results compared to a $575 million profit during the fourth quarter of 2007.

Meanwhile,

The U.S. economy was hitting on virtually no cylinders in the fourth quarter, as gross domestic product fell at the fastest pace since 1982 on sharp declines in consumer spending, investment and exports, the government said Friday.

GDP fell at a 6.2% seasonally adjusted annualized pace in the final three months of 2008, revised from the initial estimate of a 3.8% drop, the Commerce Department reported. It was the worst decline in GDP since a 6.4% decrease in the first quarter of 1982.

Hilzoy has a thought (Via Andrew Sullivan).

BogusBonus worthy.

I ask again, should I just make my next mortgage payment payable to the United States Treasury:

After two multibillion-dollar lifelines failed to shore up Citigroup, the government will increase its stake to 36 percent from 8 percent.

The chief executive, Vikram S. Pandit, will remain, but Citigroup will shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing. The moves come as the bank announced that its 2008 loss had spiraled to $27.7 billion, among the largest in corporate history.

And I still want the bozos that ran Citi into the ground to top out at a GS-15 pay rate (under “pay for performance,” they wouldn’t qualify for GS-5).