Don’t Feel Sorry For Those Losing Jobs on Wall Street
The latest news from Wall Street is that investment bank Lehman Brothers is on the brink of collapse. The Treasury Department and the Federal Reserve are scrambling to figure out a way to bail out Lehman, including stepping in and temporarily provide “liquidity”.
Earlier this year, our government bailed out Bear Stearns. More recently, they put taxpayers on the hook for $6 trillion in debt by bailing out Fannie Mae and Freddie Mac. Why should they step in to save yet another profligate Wall Street company?
Wall Street has been living high on the debt- and finance-hog for a while now, exploiting the housing and mortgage markets to make billions of dollars in profits. Their high-risk securitization Ponzi scheme is collapsing and taking down venerable companies such as Bear Stearns and now, Lehman Brothers. Other Wall Street firms, banks and insurance companies are teetering on the brink of disaster. Thousands of Wall Street employees are losing their jobs.
But don’t feel sorry for them. Many Wall Street employees have been making money hand-over-fist while their firms looted Main Street America.
Here’s an excerpt from a New York Times article titled The Key to Wedded Bliss? Money Matters.
Create a cash cushion, and live a lifestyle you can sustain. Many people who were working at hedge funds that went bust or financial firms like Bear Stearns are learning these lessons now. Ms. Sisco, of JP Morgan, said that because her younger clients haven’t experienced a downturn, they assumed the money would keep pouring in.
She said she is working with one couple in their early 30s who have two young children. Right before the husband lost his job on Wall Street, the couple had ordered $35,000 drapes. They had to move to a smaller apartment in Manhattan and had to sell their vacation home.
Are we supposed to feel sorry for this couple because they had to sell their vacation home and move to a smaller apartment? While most working Americans were struggling to pay their mortgage and fill their gas tanks, Wall Streeters were buying $35,000 drapes.
As Jim Rogers, the highly successful hedge fund manager has said,
We’ve been having investment bankers go bankrupt for a few hundred years. Are you suddenly telling me that if investment banks on Wall Street go down the tubes, that the world’s going to come to an end?He also said:
A lot of 29-year-old investment bankers out there are driving Maseratis. Let them turn in their Maseratis.
Wall Street paid out $33.2 billion in bonuses in 2007, down only 2% from 2006. The average bonus was $180,420.
You see a lot of guys on Wall Street (driving around in Maseratis and flying in private planes to exotic places) and the idea that we’re supposed to bail them out is ludicrous.
I don’t see any of those guys sending their bonus checks back. Huge amounts of money were made in the debt market we know now incorrectly, if not fraudulently… and now we’re supposed to bail them out?"
If the Lehman bailout involves the use of taxpayer money, that means taxes paid by hard-working people such as waitresses, janitors, nurses, factory workers, carpenters and truck drivers will be used to save the jobs of people who earn six-figure salaries and six- or seven-figure bonuses.
I say let Lehman fail. If their employees lose their jobs and their homes, maybe they can live in their Maseratis.