[Vision2020] One Part of the System that is Broken

[Donovan Arnold]

Maybe Republicans can start a "Save the Millionaires Fund".  Perhaps run a 30-minute infomercial with slow mellow music in the background on the tragedy of the rich having to part with one of their five Cadillacs which are like their children, suffering the humiliation of washing their gold plated dinner set with their own hands, having to wear a pair of pants more than once, and most tragic of all, wiping their own . . . 
 
Where is The Daily Show when you need them? 
 
Donovan Arnold

From: Art Deco <art.deco.studios at gmail.com>
To: vision2020 at moscow.com 
Sent: Thursday, March 1, 2012 4:08 PM
Subject: Re: [Vision2020] One Part of the System that is Broken


Oh, the poor babies!  I never realized the amount they suffer, especially with a $32,000 a tear bill for a private school.  Oh, the injustice of it all.

w.


On Thu, Mar 1, 2012 at 2:09 PM, Ron Force <rforce2003 at yahoo.com> wrote:

They're really suffering. From David Frumm:
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>Mac Abelson reports in Bloomberg on what happens when people working on Wall St. get smaller bonuses. It turns out that some of America's wealthiest are having trouble adjusting to life with a smaller six-figure income:
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>The smaller bonus checks that hit accounts across the financial-services industry this month are making it difficult to maintain the lifestyles that Wall Street workers expect, according to interviews with bankers and their accountants, therapists, advisers and headhunters.
>
>“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?”
>…
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>Richard Scheiner, 58, a real-estate investor and hedge-fund manager, said most people on Wall Street don’t save.
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>“When their means are cut, they’re stuck,” said Scheiner, whose New York-based hedge fund, Lane Gate Partners LLC, was down about 15 percent last year. “Not so much an issue for me and my wife because we’ve always saved.”
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>Scheiner said he spends about $500 a month to park one of his two Audis in a garage and at least $7,500 a year each for memberships at the Trump National Golf Club in Westchester and a gun club in upstate New York. A labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a year, including food, health care, boarding and a daily dog-walker who charges $17 each per outing, he said.
>
>Still, he sold two motorcycles he didn’t use and called his Porsche 911 Carrera 4S Cabriolet “the Volkswagen of supercars.” He and his wife have given more than $100,000 to a nonprofit she founded that promotes employment for people with Asperger syndrome, he said.
>Scheiner pays $30,000 a year to be part of a New York-based peer-learning group for investors called Tiger 21. Founder Michael Sonnenfeldt said members, most with a net worth of at least $10 million, have been forced to “reexamine lots of assumptions about how grand their life would be.”
>While they aren’t asking for sympathy, “at their level, in a different way but in the same way, the rug got pulled out,” said Sonnenfeldt, 56. “For many people of wealth, they’ve had a crushing setback as well.”
>…
>
>The malaise is shared by Schiff, the New York-based marketing director for Euro Pacific Capital, where his brother is CEO. His family rents the lower duplex of a brownstone in Cobble Hill, where his two children share a room. His 10-year- old daughter is a student at $32,000-a-year Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a few years.
>“I can’t imagine what I’m going to do,” Schiff said. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”He wants 1,800 square feet -- “a room for each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms. You have the luxury of a guest room, how crazy is that?” 
>
>
>
>From: Art Deco <art.deco.studios at gmail.com>
>To: vision2020 at moscow.com 
>Sent: Thursday, March 1, 2012 9:39 AM
>Subject: [Vision2020] One Part of the System that is Broken
>
>
>
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>
>February 29, 2012, 8:48 am 
>Bonuses Dip on Wall St., but Far Less Than Earnings
>By KEVIN ROOSE
>Brendan McDermid/ReutersThomas P. DiNapoli, the comptroller of the State of New York.
>9:07 p.m. | Updated 
>It is apparently going to take more than shrinking bank profits to put a big dent in Wall Street bonuses.
>The total payout to security industry workers in New York is forecast to drop only 14 percent during this bonus season, according to a report issued on Wednesday by the state comptroller, Thomas P. DiNapoli. By comparison, profits last year plunged 51 percent.
>“The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms,” Mr. DiNapoli said in a statement.
>Hurt by the European debt crisis, a sluggish economic environment at home and the introduction of new regulations that have threatened once-profitable business lines, the nation’s largest banks had a weak 2011. Goldman Sachs reported that profit dropped 67 percent from 2010. Morgan Stanley’s earnings fell more than 40 percent.
>In all, securities firms in New York made an estimated $13.5 billion in 2011, down sharply from $27.6 billion in 2010, according to the comptroller’s estimates. It is the second consecutive year that Wall Street’s profit fell by more than half.
>“The financial industry is in the midst of structural change,” said Ronnie Lowenstein, the director of the New York City Independent Budget Office. “It’s not just the boom and bust cycle we’ve seen in the past.”
>Despite the difficult environment, New York firms paid roughly $20 billion in year-end cash compensation to their employees. The average bonus was $121,150, down just 13 percent from the year before as the head count shrank. In 2006, the year before the financial crisis, the average investment bank employee took home a bonus of $191,360.
>But the comptroller’s estimates do not include noncash compensation given for last year and so may not give the full picture given that many banks dole out a larger portion of their annual payouts in stock.
>Still, a dip in year-end cash compensation is cause for concern for New York government officials. Before the financial crisis, Wall Street accounted for 20 percent of the state’s tax revenue. Last year, that tally was 14 percent. For New York City, the share dropped to 7 percent of tax revenue from 13 percent over the same period.
>“The city budget is dependent on a very small group of people — the 1 percent, if you will,” said Nicole Gelinas, a senior fellow at the Manhattan Institute. “If the 1 percent isn’t doing well, the city’s not doing well.”
>Not only is it local and state governments that are feeling the pinch of lower Wall Street pay. High-end restaurants, luxury goods stores and the real estate market in New York stand to suffer as well. Mr. DiNapoli estimates that every job lost in the securities industry in New York costs two city jobs in other industries.
>For the Wall Street firms themselves, compensation has presented a quandary. It is their biggest cost and banks have been cutting thousands of jobs amid the worst year for banks since the financial crisis. Yet at the same time, keeping pay relatively stable is critical to retaining and rewarding employees.
>Jamie Dimon, the chief executive of JPMorgan Chase, said at an investor conference on Tuesday that even in tough times, he would not pay his employees less than the going rate.
>“We are going to pay competitively,” Mr. Dimon told a roomful of analysts and investors at the conference. “We need top talent. You cannot run these businesses with second-rate talent.”
>Wall Street continues to be a lightning rod for politicians and critics who contend that the industry’s pay packages are too high. In 2010, the average pay, including bonuses, in the securities industry in New York City hit $361,180. (Figures are not yet available for 2011.) At that level, Wall Street paychecks are 5.5 times higher than those in the rest of the private sector.
>Banks are wrestling with ways to trim the tab, including paying more stock and less cash. At Morgan Stanley, for instance, cash bonuses were capped at $125,000 — a small fortune to many Americans, but a pittance for investment bankers and traders used to seven-figure payouts.
>Some top executives at the bank, including James P. Gorman, the chief executive, deferred the entire cash portion of their bonuses.
>“It’s a pickle,” said Alan Johnson, a compensation consultant who advises big banks on their pay plans. “Paying employees and giving attention to the external constituents, be they politicians or regulators, is a very delicate balance.”
>As Wall Street struggles to adapt to leaner times, government officials are asking themselves what it means if the industry never returns to its heights before the crisis.
>“Local and state politicians see this as a cycle we’ve seen a million times,” Ms. Gelinas of the Manhattan Institute said.
>“They’re kind of conditioned to kick the can down the road, because down the road, Wall Street comes and rescues them. The problem is, they’re not looking at the structural change,” she said.
>In an interview on Wednesday, Mr. DiNapoli said that while he believed that “the ups and downs and the cycles are always there” on Wall Street, he and other state officials had been forced to prepare for the possibility that securities firms might never be able to hoist up the local and regional tax base.
>“This could be the new normal,” he said.
>-- 
>Art Deco (Wayne A. Fox)
>art.deco.studios at gmail.com
>
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-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com

=======================================================
List services made available by First Step Internet,
serving the communities of the Palouse since 1994.
              http://www.fsr.net
          mailto:Vision2020 at moscow.com
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