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Jack is a graduate of Rutgers University where he majored in history. His career in the life and health insurance industry involved medical risk selection and brokerage management. Retired in Florida for over two decades after many years in NJ and NY, he occasionally writes, paints, plays poker, participates in play readings and is catching up on Shakespeare, Melville and Joyce, etc.

Sunday, January 15, 2012

Wall Street Bonuses and Some Political Drek


Political Drek

About Issues:  There are many significant issues with which the United States must deal.  These include foreign policy, foreign aid, national defense, relations with Latin America, the size and disposition of our defense forces, the global economy, civil rights, funding Social Security, Medicare and Medicaid, eliminating unemployment, job creation and business creation and growth, structuring and funding the safety net, regulating business, banking and finance, the balance of trade, our national deficit and debt, fiscal and monetary reform, educating our children, fighting the drug-use epidemic, the world-wide technology race, global warming and climate change, the foreclosure crisis, etc. etc.  How many of these issues have you heard discussed in any depth by the aspirants for the Republican Presidential nomination?

Synthetic Issues:  While, campaigning on the issues of same-sex marriage, abortions, illegal immigrants, reduced spending and no new taxation, government bureaucracy, and referring to the Affordable Health Care Act as “ObamaCare” may result in a candidate picking up a few votes, making such points does not address the real issues the nation faces.  When the Republicans wake up to this and turn from such synthetic issues to real issues, they will have a chance to attract the middle of the road independent voters they need to win.  Until then, they are dead in the water. Sad thing is that they don't realize it.

And About Mitt:  Many Republicans have a problem with Mitt Romney  While he is clearly
                                                         
the most qualified of the Republicans seeking the nomination, he projects a sanctimonious attitude when he speaks, one I read as that of false piety.  As a businessman, he had to make hard decisions which often hurt investors and employees, but ended up with his company making money. There is nothing wrong with this.  A businessman cannot be an angel all of the time, and Romney certainly wasn’t, but he constantly projects the image of a smiling straight shooting cowboy in a white hat who has never done anything wrong, ever, and everyone knows this is just not so, even for a devout Mormon.  Could he be less than candid in what he is saying, people wonder.  

And his smile of optimism seems welded onto his face.  I wonder what his face looks like when he, as all politicians and influential businessmen must do occasionally, makes a condolence call.  Does he still sport that grin showing his perfect teeth as he comforts the bereaved family?  

And while presenting himself as a businessman is fine, why does Romney rarely mention his service as Governor of Massachusetts, another part of his background which served to provide him with valuable experience for seeking the office of the nation’s Chief Executive? Or is he so intent on denigrating the role of government that he is ashamed that he once served as part of it?   

But the Republicans have no one better.  The other potential nominees are all oriented too far to the right to stand a chance against the Democratic nominee, the incumbent President.  I predict “Smiling Mitt” will win big in South Carolina next Saturday and still bigger in Florida ten days later.  But he will win the Republican nomination this summer only after a struggle on the convention floor with the ideologues to his right in the Party who do not trust him.  He will make one of them his running mate.  But he will continue smiling. 

Jack Lippman
                                                    
                                                          
Wall Street Bonuses:  

I really don’t know too much about this subject and I may be barking up the wrong tree, but these are my thoughts.  Please correct me if I am off base.

I read the other day that some Wall Street firms are reducing their year-end bonuses and this has made some of their employees very unhappy.  Such bonuses vary from minimal amounts to amounts in the millions of dollars.  In an industry and a country where layoffs are occurring, it would appear that such bonuses are obscene and should be illegal.  But I can see why reduced bonuses would make some employees unhappy.

Join me in assuming that an effective Wall Street trader or investment banker may be salaried at $250,000 a year plus a generous benefits package.  At year end, if his activity has resulted in creating significant profits for his employer, he may get a bonus ranging from a percentage of his salary up to ten times his salary.  This is supposed to keep his talents with his present employer and avoid his looking for another firm to join.  This is a horrible way to compensate employees.  If an employee earning a $250,000 salary consistently warrants a $1,000,000 bonus, his salary should be $1,250,000 and there should be no bonus.  Some traders and investment bankers receive commissions directly.  If the commission percentage is a fair one, there should be no need for a bonus.  If, however, the trader or investment banker receives no commission or just a token amount, with most or all of it going to the firm, a bonus would be a way of passing the money he would have earned if there had been a full commission structure on to him.  A salaried investment banker or trader who receives no direct commission has a legitimate gripe, therefore, if his bonus in lieu of commissions is reduced.

                                     

In an economy in recession, with many unemployed people out there, the concept of Wall Street bonuses leaves a bad taste in people’s mouths and should be abandoned.  A trader or investment banker should be paid what he or she is worth in salary and commissions with no bonus whatsoever.  If he or she becomes a partner in a firm, however, that would present an opportunity to get a share of the profits, but until that point is reached, bonuses are a horrible alternative.
JL
                                                         

Sister Web Sites:

As I frequently mention, I have established four new websites, all of which are in various phases of construction.  They are bare-bones sites but each day they are growing a little.  These sites can be viewed at Politicaldrek.com, Sportsdrek.com, Healthdrek.com and Computerdrek.com.  There is already some content on the first two of them, but all of you are invited to contribute political, sports, health and computer articles to all of these sites. Pick your site based on the type material you are submitting. You may Email each site directly by using the “Contact” tab on their respective page-top menus.
JL


                                                   


                                                                  
                    
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