So in this warped world of priorities, where giving financial firms great deals to “preserve the system” and cook the books on the TARP are top priorities, having an former insider grease the wheels is probably seen as really helpful. It’s merely another proof of what Simon Johnson pointed out in May 2009: the government is firmly in the hands of financial oligarchs.
— Yahoo Finance’s Daniel Gross has a terrific column on what banks should have to do before paying out dividends. First, he’s good to point out that handing out big dividends is a big payday for bank executives:
According to the most recent proxy statement, CEO James Dimon had beneficial ownership of 7.1 million shares. So the increase — 80 cents on an annual basis — is worth an extra $5.7 million per year to Dimon.
Gross makes this point that is far little made in the press:
The bailout of Fannie and Freddie was, in large measure, a bailout of the global banking complex…So a decent-size chunk of the aid taxpayers are providing to Fannie and Freddie ($130 billion so far, and up to $169 billion through fiscal 2012, according to Bloomberg) has gone directly to the banks in the form of interest payments. As long as they’re in a sharing mood, banks might consider sharing the wealth with the folks who saved their shareholders from further pain — American taxpayers.
And this last one is just sweet. Instead of Jamie Dimon giving his shareholders a raise, how about his poorly paid employees? Gross notes that bank tellers on average make less than twelve bucks an hour, while customer-service reps take home less than $16 an hour.
One of the big problems in the U.S. economy is that virtually all the gains of the past two years have accrued to people at the top of companies and to shareholders. Workers have generally received crumbs. This dynamic undermines the ability of people to consume, and to stay current on their debt. Just as it was in Henry Ford’s interest to pay his auto workers a living wage back in the 1910s, banks would do themselves a favor by improving their workers’ living standards. And they can’t claim that they don’t have the money or profits to do it.