Did Taxpayers Pay $33 Billion in Bank Employee Bonuses?

New York Attorney General Andrew Cuomo released data today that revealed almost $33 billion in bonuses were awarded to bank employees of nine banks which received taxpayer aid money, with over $1 million each to almost 5,000 bank workers, according to a Wall Street Journal report.

Amazingly, the report also said that with six of those nine banks, they paid more in bonuses than they took in with profits. Maybe this is another reason why the industry is suffering so badly. Paying out more than you put in doesn’t cut it for long.

While the Cuomo report added that compensation and benefits for the nine banks dropped by 11 percent in 2008 from 2007, the decline in revenues actually made the percentage of compensation rise to 45 percent; an increase of four percent from 2007.

This is of course the problem related to taxpayer money bailing out companies, as they don’t have to practice discipline other companies and industries must to survive, as the first commitment of the bailout assumes they’ll get it again.

Surprisingly, the White Houses response was somewhat nonchalant, with White House Spokesman Robert Gibbs saying, “The president continues to believe that the American people don’t begrudge people making money for what they do as long as…we’re not basically incentivizing wild risk-taking that somebody else picks up the tab for.”

You know what would have happened if this had been the Republicans in charge and these types of numbers would have come out.

At least one New York Democrat was outraged over the figures, as Edolphus Towns couldn’t believe the pay compensation figures released, saying they were “shocking and appalling” while calling for a hearing into the bank compensation practices.

Others were also angered by the report, as the losses at the nine banks for 2008 were close to $100 billion, stirring up new resentments over what many people considered something the government had no right to do with the taxpayers money. These nine banks alone received $175 billion through the Troubled Asset Relief Program.

Bank arguments were that only a small number of people were responsible for the problems, and so others shouldn’t be held accountable and suffer less compensation.

The banks added that they must pay for performance, but when there isn’t any performance, that argument is weak. The entire problem comes from them pushing to be bailed out in the first place by taxpayers funds. They had to know they would be watched closely and held accountable for their actions, and now they’re finding it out the hard way.