And collusion (or, let's call spade a spade, a conspiracy) is exactly what I posit it was. Sachs could't have done it without Moody's, loand brokers ect.
But you didn't say that. You did just what the media and politicians are doing and laid the blame solely on the banks ("Goldman Sachs, Merrill Lunch and their ilk"). I'm glad you realize that is not the case, but that wasn't what you said.
But you are being economical with the truth when you try to add "consumer and the voter" to the mix. What made subprime bubble possible was that the whole process of securitization and MBS & CDO creation was (purposefuly IMO) made so arcane that, except for those intimatelly involved, very few knew what the fuck was going on.
Securitization has been around for 40 years. It's not something new and there are a ton of financial products that the average person will never fully understand. You can't leave the blame of the consumer and voter out of this either. When someone murders another person with a gun, do you blame the gun manufacturer? When someone drives 120 mph down the road and kills someone in a crash, do you blame the auto manufacturer?
Subprime loans have been around for decades. They have a legitimate purpose in the loan industry. Did they get out of hand? Absolutely, but it's the symtom of a larger problem in our society: buying things we can't afford. It's not the cause. Americans have been increasing their average debt in real dollars EVERY year since 1953 when they first started keeping track of this data (except 2008, but that's simply because of the number of bad debt written off). It simply has come to a head at this point. The consumer chose to take these bad bets and the politicians chose to allow the banks to offer them. The banks aren't innocent, but neither are the consumers and voters.
That is also only partially true isn't it? While part of the bonuses was indeed paid in stock, very many of the evil bankers were also paid vast sums in hard, cold cash. So yes, even the fallen ones, can indeed laugh all the way to the bank.
Depends on your definition. I used to work at Bank of America. Companywide policy was that max cash payout was $250k per year. Anything above that was in restricted stock and options. I have several good friends that a year ago were worth well over $1MM but couldn't sell the securities, couldn't diversify and now are worth a fraction of that.
Merrill and Morgan Stanley had a similar program outside of retail brokerage commissions. Goldman, Lehman and Bear were similar as well. I'm not saying that none of them were able to cash anything out at any point, I'm sure a lot were, but a very large portion of the bonuses 'paid' out of the past 5 years are now worthless or at least worth a hell of a lot less.
Specially that "...While the government rescue limits the salaries of five top executives from each of the participating financial firms, Congress did nothing to restrict Wall Street firms from using taxpayer funds to boost the compensation of rank-and-file investment bankers..."
http://www.time.com/time/business/article/0,8599,1853846,00.html.
So victims of the crisis (including UAW shmucks) are paying bonuses to the crisis creators!
That article is a bit dated. Most of the major firms that received bailout money have axed bonuses for executives and bonuses for the underlings are down significantly. Going back to BofA, they were never in danger of collapse, but despite that, guys that were getting payouts of 5% of income generated are going to be lucky to get 1%. My wife's firm, State Street, just announced no raises for 2009 and though they haven't said it, it is expected that there will be no bonuses paid either (which would be 2008 bonuses paid in 2009).
Simply put, I don't know a single person in this industry working for any firm that got merged or received TARP money that is getting anything close to what they got last year, regardless of their performance.