UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

February 9, 2009

CRASH TALK

NY Times - Five hundred thousand dollars - the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money - seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.

"As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are also at zero at the end of the year with credit cards and mortgage bills that are inescapable," said Holly Peterson, the author of an Upper East Side novel of manners, "The Manny," and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group. "Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.". . .

Few are playing sad cellos over the fate of such folk, especially since the collapse of the institutions they run has yielded untold financial pain. But in New York, where a new study from the Center for an Urban Future, a nonprofit research group in Manhattan, estimates it takes $123,322 to enjoy the same middle-class life as someone earning $50,000 in Houston, extricating oneself from steep bills can be difficult.

Barbara Corcoran, a real estate executive, said that most well-to-do families take at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes.

Total minimum cost: $16,000.

A modest three-bedroom apartment, she said, which was purchased for $1.5 million, not the top of the market at all, carries a monthly mortgage of about $8,000 and a co-op maintenance fee of $8,000 a month. Total cost: $192,000. A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.

Many top executives have cars and drivers. A chauffeur's pay is between $75,000 and $125,000 a year, the higher end for former police officers who can double as bodyguards, said a limousine driver who spoke anonymously because he does not want to alienate his society customers.

"Some of them want their drivers to have guns," the driver said. "You get a cop and you have a driver." To garage that car is about $700 a month.

A personal trainer at $80 an hour three times a week comes to about $12,000 a year.

The work in the gym pays off when one must don a formal gown for a charity gala. "Going to those parties," said David Patrick Columbia, who is the editor of the New York Social Diary, "a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she's not going to wear the same dress." Total cost for three gowns: about $35,000.

Derrick Z. Jackson, Boston Globe - Within the $900 billion economic stimulus bill, Democrat Barbara Mikulski of Maryland sponsored an amendment to give tax breaks to new-car buyers, for the first $49,500 of the car's price tag. . . The amendment passed 71-26.

Just four hours earlier, the Senate considered an amendment sponsored by Democrat Patty Murray of Washington that would have pumped an extra $25 billion into public works projects, including $5 billion for mass transit. . .
That amendment failed by two votes. Just when millions of Americans are weaning themselves from unsustainable ways, the pork-brained Senate - with no complaint yet from Obama - remains the slick sales rep for a spent industry.

In Massachusetts, MBTA ridership set a new record with a 4.3 percent rise and the average number of riders per week on commuter rail is the highest in its 44 years. Ridership gains were far more dramatic in cities with younger histories of mass transit.

Commuter rail ridership in the third quarter of 2008 rose between 17 percent and 36 percent in Los Angeles, Dallas, Portland, Maine; Oakland, and Albuquerque. Bus ridership was up between 10 percent and 24 percent in Chicago, Baltimore, Atlanta, and Orange County. Subway and elevated-train rides rose between 11 percent and 14 percent in Atlanta, Miami, and Los Angeles. Trolley and streetcar ridership rose between 13 percent and 20 percent in Memphis, Buffalo, Denver, Minneapolis, and Sacramento. . .

Based on the American Automobile Association estimates of driving costs, the American Public Transportation Association calculates that Americans who rely on public transportation can save $8,368 a year. Boston leads the United States in calculated annual savings, at $12,285.

That dwarfs a $1,500 tax credit. . . Mass transit needs far more stimulus help to offset local budget cuts, but cannot get it because some say buses, trolleys, and trains are not "shovel-ready." America's automakers keep getting aid, even when a bailout is only a shovel to dig their own grave.

San Francisco Chronicle - Fifteen percent of all houses and apartments in the United States stood empty at the end of 2008 - a record 19 million homes - according to data released by the U.S. Census Bureau. Vacant housing units in the fourth quarter increased nearly 7 percent compared with the same period in 2007, largely because of bank foreclosures and owners who abandoned their properties.'

2 Comments:

Anonymous Anonymous said...

All I can say to these fat cats is "Boo-Fucking-Hoo" (to quote Ian Mackaye).

If they haven't been saving a nest egg with all this cash they have been fleecing from the rest of us over the past almost 30 years, then they deserve to sell their homes at a fire sale, not spend $16,000 on vacations, $35,000 on ball gowns, or have an ex cop driver. They could live like the rest of us, barely able to afford a 4 day vacation at a public campground, carefully budgeting for a bus pass, and challenged to keep decent work clothes on our backs.

I think $500,000 is a quite generous wage for anyone who has run a bank into the ground with poor fiscal management, and toxic assets. They should be thanking their lucky stars that they don't see prison time.

If these fat cats really want to have more money, their pay should be directly linked to the pay of the lowest paid members of their staff and subcontractors. That would mean if the Bank CEO wants a raise beyond the $500,000, he should have to be sure the janitors, cafe workers, and mail room clerks, are making a good family wage then his wage can be increased because the wage of the lowest paid workers has been made more equitable.

February 10, 2009 1:14 PM  
Anonymous Anonymous said...

Linking pay to the lowest paid members of their staff and subcontractors is an awesome idea. Unfortunately, they will never allow it to happen.

February 11, 2009 3:27 AM  

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