More Goldman Sachs Bullshit

Goldman Sachs has decided that it's executives will get only stock bonuses this year, and they will be required to hold them for five years.

Goldman Sachs Group Inc., moving to defuse public outrage over its pay, said its top 30 executives will receive no cash bonuses for 2009 despite the firm's expected record profits.

Thursday's announcement was the biggest concession yet by Goldman in response to the criticism of its compensation barely a year after the New York company received $10 billion in taxpayer-funded aid. Instead of a mix of cash and stock, Chairman and Chief Executive Lloyd C. Blankfein and the rest of Goldman's management committee will be awarded only stock that can't be sold for five years.

But the changes are only for 2009 and don't necessarily affect more than 31,000 other Goldman employees, consultants and temporary workers. That group includes traders and other employees who are fueling most of this year's revenue and profit surge, putting them in line for sharply higher bonuses early next year. In addition, Goldman gave no indication in its announcement that it will buckle to pressure to rein in overall pay levels.

A couple comments are in order.

First, this is good policy,  because it will force the executives to take a slightly longer view. So it's just slightly better than the situation yesterday.

But the situation yesterday was completely fucked up.

The taxpayers have already bailed Goldman out, and the fact that they will delay taking their massive bonuses doesn't make the bonuses any less of a giant rip-off for taxpayers.

Goldman is still making money hand over foot, and they're doing it by gambling with taxpayer money, which is being lent to them at 0% interest from the Federal Reserve. If the Federal Reserve would lend you money at 0%, you might be able to make some yourself. Of course, you don't have every member of your family working for the Obama administration, and you haven't spent hundreds of millions of dollars lobbying Congress, so you'll just have to settle for whatever your local bank wants to lend you, at whatever rate they feel like charging you. It probably won't be 0%.

What's more, by taking their bonuses in deferred stock, these executives won't have to pay any income tax on them, which means that, between now and then, you'll be giving these guys a personal tax-free loan.

But someone has to pay taxes to pay for all these wars and bailouts, right? Yep. You.

The bankers, of course, will ague that the stock is risky. If something happens to Goldman, the stock price might go down. Well, this would be true except for one thing: it won't go down, because taxpayers will bail them out if anything happens.

But don't worry. They're just doing "God's Work".