CHESSNOID

First of all bailouts with taxpayer money creates a moral hazard.  These companies are for profit.  When a bank makes money, everyone is happy and paid accordingly.  When a bank fails, they should be taken over by the FDIC.  That system exists because the bank made bad decisions that caused it to fail.

Enter Citibank and Bank of America.  They both lost BILLIONS of dollars.  They should have been allowed to go bankrupt, and then the FDIC takes over the assets, replaces management, and balances the books.

Instead both the Bush and Obama administration bailed out these banks MULTIPLE times with TAXPAYER money.  While the companies LOST money, the bank executives took it upon themselves to compensate themselves with TAXPAYER money.

Oct. 24 (Bloomberg) –

Citigroup Inc. and Bank of America Corp. paid top executives an average of $18.2 million each last year as the banks accepted $90 billion of bailout funds, records from Treasury Department paymaster Kenneth Feinberg show.

Citigroup paid $390.2 million to 21 people, an average of $18.6 million each, the records released Oct. 22 show. Bank of America paid $227.8 million to 13 executives, or $17.5 million apiece, according to Feinberg, who didn’t name them. The review excluded top-paid employees from 2008 who have since left.

Average pay for managers at the two banks was almost double that of the other five bailed-out companies reviewed by Feinberg. He ordered 2009 pay cuts averaging more than 50 percent for 136 executives at the seven firms after President Barack Obama said “it does offend our values” when company executives “pay themselves huge bonuses even as they continue to rely on taxpayer assistance.

Citigroup sought aid from the Treasury Department last year as it posted a record net loss of $27.7 billion.”

I don’t want to just criticize. I have decided to become proactive and offer solutions. This advice is free and will save us BILLIONS of DOLLARS. To President Obama and his cabinet, the House and the Senate, moving forward PLEASE do not use taxpayer money to BAILOUT any companies. USE any money to beef up our FDIC because our banking system is in trouble. The FDIC asking for 3 years prepaid premiums from the banks is not a real solution since most of them can not afford to pay it.

Also, by avoiding future bailouts, we won’t have to CREATE SILLY wasteful jobs such as PAY CZARS to monitor BANKRUPT company executive compensation because the companies will have been shut down. This will also save time in trying to spin the news of how IGNORANT it was to bail them out and trying to justify paying valuable employees of FAILED too-big-to-fail companies from leaving a BANKRUPT company. I do hope this constructive but snarky post helps. It is what the majority of Americans feel.