Made of Money

Update: On Thursday, as reported by the NY Times:" President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions. “There will be time for them to make profits, and there will be time for them to get bonuses,” Mr. Obama said during an appearance in the Oval Office with Treasury Secretary Timothy F. Geithner. “Now’s not that time. And that’s a message that I intend to send directly to them, I expect Secretary Geithner to send to them.”

The following made the Rescued Diary list at Daily Kos Thursday.

The median household income in the U.S. is about $50,000. That means about half of households make more, and half make less. So a family bringing in $50,000 a year would need to work for 20 years to have made a million bucks.

But a million ain't what it used to be when John Beresford Tipton was transforming lives with a check for it in the 1950s, although if somebody now gave that family of today a million bucks all at once, it would still be quite a lot.

But let's say $10 million, which would require that family to work for 200 years. Or, if they are the latest in a long line of working people who made $50,000 a year (even though a generation ago that would be way above the median income), $10 million would be roughly equivalent to 20 years of their income, plus 20 years of their parents, grandparents, great-grandparents, etc. back to, say 1809, when the family could have started its climb to fortune by working for, oh, Thomas Jefferson. If they were white.

But $10 million won't even buy you a really big house anymore, so what you want is $100 million. For that, you'd need to work for 2,000 years, or you could pool the total income of five families for 20 generations, and start saving every last cent in the year 1409.

At this point my calculator is no help, so check my figures. Let's look at just one year. $100 million equals the income of 2,000 median incomes. $110 million, $120 million, $170 million-- each increase of ten million dollars adds another 200 people. Until at $200 million, equal to 4,000 median family incomes. $210 million, $250 million, $290 million--$300 million, $350 million, $400 million, $440 million, $500 million, double that, it's 20,000 people.

Right now the city of Pittsburgh has a population of just over 300, 000. If all the professional athletes were out of town (which they probably are, since the Steelers are in Tampa for the Super Bowl), and if every family left made the median income, it would take roughly the city of Pittsburgh and a suburb or two to pay for: not the year's income for Wall Street executives, not the equivalent of their stock options and investment income, but just for the bonuses they got in 2008.

Employees at financial companies in New York collected $18.4 billion in bonuses in 2008. Bonuses paid while many of these firms were taking taxpayer money, to bail out companies and banks that failed so badly that they've sent the world into the worst economic times since the 1930s Great Depression.

For that they collected bonuses that add up to more than the total that 13 state governments were compelled to cut from their budgets in 2008 ($3.6 b) and 22 states so far in 2009 ($12.2b.) Those cuts mean layoffs, cuts in medical care, libraries closed and college tuitions raised. It is in fact more than all the state revenues of Maryland or Connecticut, Indiana, Wisconsin, Minnesota, Virginia, Washington or a whole host of less populous states.

While hundreds of thousands of people have lost their jobs just in the past several months, the Wall Street bonuses were about the same this year as in the market boom year of 2004. This past year they lost about $35 billion. But no problem. They got more than half of it for themselves, as an extra. A reward.

Wall Streeters aren't the only ones. The Times: "Outside the financial industry, many corporate executives received fatter bonuses in 2008, even as the economy lost 2.6 million jobs. According to data from Equilar, a compensation research firm, the average performance-based bonuses for top executives, other than the chief executive, at 132 companies with revenues of more than $1 billion increased by 14 percent, to $265,594, in the 2008 fiscal year."

So how do these Wall Streeters feel about draining this wealth from the country--from killing the economy and then robbing its corpse? These bonuses were actually down from the biggest recent year of 2006. On Wall Street, where money is the ultimate measure, some employees apparently feel slighted by their diminished bonuses. A poll of 900 financial industry employees released on Wednesday by eFinancialCareers.com, a job search Web site, found that while nearly eight out of 10 got bonuses, 46 percent thought they deserved more.

This economy, this society just can't afford these people anymore. Nationalize the banks and fire them all. For those who used government money, prosecute them to the full extent of the law, however inadequate that might be.

But there's a larger lesson. This society built on money is bankrupt, in just about every way. We can no longer live as though we are made of money.