Senator Bernie Sanders urged Treasury Secretary Henry Paulson to ban bonuses for employees of the country's nine largest banks that were recently propped up with a $125 billion infusion of taxpayer funds. Sanders also called on Paulson to freeze shareholder dividends for investors in financial institutions rescued with the $700 billion Wall Street bailout. Sanders made the case for the bonus bans and dividend freeze in a letter sent to Paulson.
Big year-end bonuses totaling more than $70 billion already have been budgeted, according to a report in Forbes magazine, by Citigroup, JPMorgan Chase, Bank of America, Merrill Lynch, Goldman Sachs, Morgan Stanley and others. "The same people who created the financial crisis are in line to collectively reap billions of dollars while the middle class is left to pick up the tab," the senator told the treasury secretary. Sanders said the Treasury Department should redirect the funds to help homeowners refinance troubled mortgages at affordable rates.
In calling for the dividends freeze, Sanders cited the work of Harvard economists David S. Sharfstein and Jeremy C. Stein, who projected that dividends paid out next year would route $25 billion in taxpayer funds to troubled financial firms' shareholders. Among the biggest beneficiaries, the economists said, would be the officers and directors of the nine banks who stand to pocket about $250 million in dividends. "All of us have a responsibility to make sure that the insatiable greed on Wall Street is not allowed to continue and that we do everything possible to ensure taxpayer dollars are protected," Sanders said.
What do you think? Send us a note and we will post excerpts of comments (identified with your initials and hometown) .
Here portions of a few recent letters Sen. Sanders received on this topic:
I strongly support your position in a letter to Paulson banning bonus money for executives whose banks have been helped with bailout money. I am grateful for your voice. Thank you. Burlington
You are right to block the bonuses and stock options for executives of any company that has received any money from these bailout programs. I have taken an informal poll of 20 people that I know and not one of them is in favor of these executives receiving ridiculous pay packages, bonuses, and stock options when they needed federal money to keep from going out of business. Newport Center
Keep up your fight against executive bonuses and frivolous spending at firms bailed out by the taxpayer. Taxpayers must maintain control over the funding. Wallingford
It is imperative that you not allow big year-end bonuses to the same people who created the financial crisis we are in today, while the middle class is left to pick up the tab. Your idea to stop shareholder dividends is equally important and must be considered. I fear your letter to Secretary Paulson will fall on deaf ears. You must be aggressive and speak on behalf of the ever dwindling middle class. We count on you. St. Albans