Here’s some outrage we can believe in
Kenneth Lewis, Bank of America chairman, CEO and president.
This, I think, is exactly the kind of action that many Americans have been asking for as the government spends ever-more of our tax dollars to prop up flailing U.S. corporations. It may be a cheap political stunt, but it reflects the anger that is simmering among taxpayers.
This letter to Kenneth D. Lewis, chairman, chief executive officer and president of Bank of America Corp is signed by New York Attorney Gen. Andrew Cuomo and Barney Frank, chairman of the U.S. House Financial Services Committee:
Dear Mr. Lewis:
We write to demand on behalf of taxpayers that Bank of America immediately disclose individual bonus data for all individuals at Merrill Lynch and Bank of America who received 2008 bonus awards of $1 million or more.
We believe that as a matter of transparency and disclosure, taxpayers have a right to know where their tax dollars go once received by TARP recipients. Accordingly, all TARP recipient institutions should disclose individualized executive bonus information to taxpayers.
As you know, late last year Merrill Lynch moved up its planned date to allocate bonuses and then richly rewarded many of its executives. Merill Lynch did this knowing full well that they were going to suffer huge losses for the fourth quarter and the year. At the time of the bonus awards, Merrill was in the process of being acquired by Bank of America, a TARP recipient. Moreover, Merrill Lynch also knew at the time that they had received a credit line of billions of dollars in TARP funds.
As a result of Merrill’s huge losses, taxpayers were forced to help Bank of America acquire Merrill by providing billions of additional TARP funds as well as insurance against losses from Merrill’s toxic portfolio. In short, the combined Bank of America-Merrill Lynch entity received $45 billion in taxpayer funds as well as $188 milllion in taxpayer-funded insurance.
Despite this massive infusion of taxpayer money, Merrill Lynch paid out bonuses totaling approximately $3.6 billion and Bank of America distributed a pool of more than $3.3 billion.
Taxpayers who are footing the bill obviously demand accountability and want to know who received these funds and why.
Our mutual goal is to stabilize and enhance our country’s financial institutions and system. The taxpayers of this country have given mightily to that cause. They deserve to know where their money is going and how it is being spent. Furthermore, we all agree that trust and confidence in our financial system must be restored. Transparency and disclosure are the building blocks of that trust and confidence.
Your refusal to reveal compensation information fuels distrust and cynicism at a most sensitive time.
Very truly yours,
Andrew Cuomo
Attorney General of State of New York
Barney Frank
Chairman, House Financial Service Committee, U.S. House of Representatives
cc: Bank of America Board of Directors
Don Mecoy
Business Writer
Oracle of Omaha on CNBC today
Warren Buffet made a lengthy apperance on CNBC today and discussed a wide range of topics on things economic and market-related. He said the American economy has “fallen off a cliff.” However, Buffett offered a fair dose of optimism as well.
Among his takes:
–The economy “can’t turn around on a dime” and a turnaround “won’t happen fast.”
–Five years from now, the economy will be running fine. The strength of the American system will pull it through, just as it has many times in the past.
–Democrats and Republicans should work together and not try to take advantage of the economic situation to achieve partisan goals.
–Inflation has the “potential” to be worse than the 1970s.
–Most banks are in “pretty good shape” and can “earn their way out” of the current problems given the low cost of funds. Banks, however, “need to get back to banking.”
–Extremely important that the government make clear depositors won’t lose their money if banks fail. Obama needs to make a “clear statement” in support of the banking system.
Don Mecoy
Business Writer
Pundits gone wrong
Jon Stewart’s recent rant on CNBC has been making the rounds, and it’s a hoot. But Esquire.com wonders why it took so long for someone to note that, when it comes to economic punditry, the emperor has been prancing around buck naked for some time now.
So Equire posts its top five moments in economic punditry gone wrong.
My favorite, Fox pundit Bill O’Reilly versus Nobel Prize economist Paul Krugman:
Don Mecoy
Business Writer
Making life easier
Bits & Pieces blog posts this novel way to simplify television remotes. (via)
Don Mecoy
Business Writer
