The latest move by a big financial institution, in this case Citigroup (NYSE:C), to limit cash bonuses in order to shore up their pubic relations campaigns, are in my estimation largely a waste of time.
First of all, I personally really don’t think that many people care one way or the other what bankers make, and that hasn’t been what’s been driving the anger of consumers and voters in America. What has outraged Americans has been the government bailing out the banks in the first place, not how much money the bankers were making.
Now that the bailouts have largely passed and most been paid back, online writers and mainstream media have focused on bankers’ pay as if limiting it has anything to do with being profitable going forward.
So the idea that Citigroup will limit cash bonuses to $100,000 has pretty much no meaning at all. The average American could care less about what the salary or bonus of a banker is, and when the economy actually does come out of the recession (which we are still in), there is no one that would have any interest in what banks pay their people, other than shareholders.
What people are outraged at in America is the out of control government spending and the resultant attempts to socialize (in reality more like fascism) the country and its businesses. Socialism is government takeover of businesses, while fascism is blending government and business together. Many people confuse the two and think of socialism, when in reality it’s fascism that’s being practiced.
Either way, people in America know something is wrong with the government and its attempt at playing god, and even if they don’t understand what’s happening exactly, they know it must be stopped, the reason why the tea party movement has emerged out of the grass roots of the country.
When media attempts to make it look like there is all this outrage by the American people over banking pay, I don’t see that or hear that when I’m on the street. What I hear it the outrage of the government getting involved in the first place and bailing out the poorly run banks, rather than letting the well run companies take over the healthy parts and let the rest fall by the wayside.
The idea that capping bonuses and pay is a major concern of Americans now is largely a mainstream media creation picked up by many of its Internet sycophants.
Americans aren’t largely concerned about big pay, they’re concerned about big government, which they want to see cut back down to size and to stay out of their affairs.
That’s why I say it’s meaningless as to Citigroup limiting the amount of cash bonuses they hand out to their people. The only caveat to that is how it will impact their top performers, who may leave as a consequence of these misguided actions.
Citigroup, as well as many other banks, can always put warm bodies in the business, but to hire and retain top workers, that requires more than good feelings and encouragement, it requires being rewarded for your work and contributions.
For the struggling Citigroup to think this will somehow make a difference in public perception or stay the hand of the U.S. government, they’re sadly mistaken, as we’ll find out in 2010. All they’re doing is making themselves less competitive for top talent in the industry, at a time when they need the best people they can get to generate better revenue and profit.
