Wall Street cash bonuses for 2012 could rise 8 percent to a grand total of $20 billion according to the Wall Street Journal, in an industry where the average salary is $362,900, higher than before the financial crisis began. Those who bagged the fat bonuses are doubtless popping the bubbly and heading for the nearest Lamborghini dealership, but embattled taxpayers might recall a few hard realities.
For example, the federal government bailed out Wall Street to the tune of $700 billion in the Troubled Asset Relief Plan (TARP), but the true cost to rescue the economy could be $12.8 trillion. Whatever the figure, there is no doubt that just before the federal bailout Wall Street raked in $18.4 billion in bonuses, something president Barack Obama professed to abhor. “That is the height of irresponsibility,” he said. “It is shameful. And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.”
Jack Lew, president Obama’s pick for Treasury Secretary and confirmed by the Senate on Wednesday, was previously chief operating officer at Citi Alternative Investments, a division of Citigroup. There Lew bagged a cash bonus of nearly $1 million on top of his $1.1 million salary and that bonus came just before a $301 billion government bailout of Citigroup. Lew was okay with all that and as Treasury Secretary doubtless remains untroubled by $20 billion in bonuses in an industry bailed out by taxpayers to the tune of at least $700 billion. At this writing, the president has not repeated his sermon about shameful bonuses, irresponsibility, and the need for discipline restraint.
News of the $20 billion in bonuses arrives in weak economy and on the cusp of $85 billion in federal government spending cuts. And tax time is just around the corner.