Saturday, February 17, 2007

Goldman-Sucks

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Jon Tasini writes:

In the summer of 2005, Goldman Sachs successfully extorted money from New York, threatening to leave the city unless it received tax breaks and low-interest bonds. It did so in a fairly ugly way. Using the specter of September 11th as a club, the company pocketed an unbelievable deal: $1.65 billion in low-interest, triple-tax-exempt Liberty Bonds, enabling the firm to save as much as $9 million a year in financing costs, which would save Goldman about $250 million over the life of the bonds. If that wasn’t enough, the city also threw $115 million in sales and utility tax breaks at the company, in return for a commitment to maintain its headquarters in Lower Manhattan and employ more than 9,000 people through 2028; those breaks could rise to as much as $150 million if Goldman adds 4,000 new jobs by 2019.

Jon continues:

So, here we are now: a company that is taking money out of my pocket and yours is setting aside $16.5 billion in cash to pay out as bonuses—an average pay day of $622,000 per worker. Of course, average really is misleading—the top dogs at the company will reap the big windfalls (CEO Lloyd Blankfein is reportedly in line to cash a check of up to $50 million), with the support staff probably getting a free Metro Card or maybe a nice holiday gift basket, at best.

Jon now brings in the punchline, tough it feels more like a punch in the gut than a laughing matter.

Why shouldn’t Goldman give some of that money back to the city, or the federal government (the low-interest Liberty Bonds are backed by the faith and credit of the feds)? Sure, some of the money will come back in tax revenues. But, why should a company that chooses to devote $16 billion to bonuses continue to be underwritten by the average person? Here’s the cruel irony: New York’s residential real estate market is out of control, with the city increasingly becoming a place for the rich. Blankfein and his high-rollers will likely spend a huge chunk of their new riches to buy multi-million digs in the city, further pushing up prices and making housing even more unaffordable for millions of people—the very people who are paying taxes that are supporting the tax-breaks Goldman Sachs is enjoying so it can rake in even larger profits.

Isn’t capitalism great?


If only Jon Tasini had been elected to the U.S. Congress rather than Hillary Clinton. Madame Hillary is up to her neck-fat in Goldman-Sachs campaign money and elbow rubbings, and neither she, nor they are part of any solution to America’s economic problems. Goldman-Sachs is typical of the problem; corrupt selfish city government in league with bullying corporations. Who pays the higher taxes? You and I. Goldman-Sachs never pays their way. I doubt they ever have.

This is another example of how the notion of ‘free markets’ are a complete myth. Goldman-Sachs, who should be competitive enough to survive without tax breaks, brokers a deal with Bloomberg and leans on the taxpayers of NYC, who will now have to make up the difference. It’s not a ‘free’ market when larger companies bully access and take corporate welfare.

I wonder if the executives at Goldman-Sachs will be thanking New Yorkers for the big fat bonus checks. Somehow, I doubt such gratitude will even cross their greedy little minds, even as they watch, from the comfort of their penthouse apartments, the average person struggle along below in order to make ends meet.

Peace

5 comments:

Joe said...

I am always at how anti-capitalists, such as yourself, can be so willfully ingnorant. Why should Goldman Sachs remain in the city, paying high NYC taxes? They not only have every right to leave the city for another state that offeres lower taxes, they are obligated to their shareholders to reduce cost as much as possible. Try not to be so resentful of others success; it is not an attractive trait.

Shlomo said...

re: I am always amazed at how anti-capitalists, such as yourself, can be so willfully ingnorant.

Ignorant of what? It seems that you are making apologies for something after the fact, that before and during the fact, you either had no knowledge of nor cared to know. Who is the ignorant one?

re: Why should Goldman Sachs remain in the city, paying high NYC taxes?

They knew NYC had high taxes when they built there. They had a choice from the beginning to remain or move each and every year they have been in business. Goldman Sachs has also never lost money and continues to control and menipulate markets to their advantage, even going so far as to have their previous CEO installed in a key government position in the Bush administration. Stop treating Goldman-Sachs like they are some poor victim. Trust me, it is they who are victimizers.

re: They not only have every right to leave the city for another state that offers lower taxes

Which state would that be? New Jersey? Nebraska? Arkansas? New Mexico? How about Puerto Rico? And you don't think they, like WalMart, aren't going to milk the tax-break schemes like they have in NYC, no matter where they end up? C'mon. Successful companies should NOT EVER be asking the government for help, especially when the taxpayers have to make up the difference in lost revenue. They will never leave NYC, because it is the international hub of trading. Besides, what would be so bad if they left? Really. How many people live in NYC compared to how many work for Goldman-Sachs? I doubt NYC would notice them missing. Their idle threat to leave NYC was bullshit, and it was a ploy to garner some public support.

Every business in NYC has the choice to leave and they don't for a very good reason. If they cannot survive, then maybe they should find something else to do. Once we let one company get away with tax breaks they don't require, then every other firm will follow suit. Soon, none of the huge money makers will pay taxes at all.

re: they are obligated to their shareholders to reduce cost as much as possible.

This is the stupidest shit I've ever heard. Goldman-Sachs isn't lowering it's operating costs. It's passing its rising operating costs onto the taxpayers. Costs have not gone down, only the amount they will pay as a result of their political extortion. Do you really believe that a wildly successful corporation like Goldman-Sachs should be subsidized by average hard-working taxpayers who benefit nothing from such subsidies? And as far as responsibility to shareholders, if huge bonuses are paid out, shouldn't that money go to the shareholders? We're talking billions of dollars here. I am sure that as a shareholder, you wouldn't mind a few hundred extra dollars in dividends. If it's all about shareholders, then why not give the windfall to the shareholders?

Ultimately, you don't have an issue with NYC taxpayers footing the bill to ensure that a shareholder in Grand Rapids earns another .05% percent on his investment, or the fact that shareholder money is being hoarded by CEOs who already earn 400 times what the average American working family brings in per year. You have some fucked up priorities.

re: Try not to be so resentful of others success; it is not an attractive trait.

I have an overdeveloped sense of social justice that doesn't permit me to remain silent when I see ruthless greed overcoming civic responsibility and common decency. Goldman-Sachs can earn their money the same way my father did, with hard effort, honesty, and without corporate welfare or tax breaks payed for the sweat and labor of others.

peace

Shlomo said...

Paid...not payed...DUH

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