Indentured Family AssistanceOctober 22, 2012 Posted by: Joe Morgan, CFA
In a world where people have problems
In this world where decisions are a way of life
Other people's problems, they overwhelm my mind
They say 'compassion is a virtue,' but I don't have the time
If you've ever loaned money to a distant relative or perhapstook the short end of a business deal in order to help him or her,then perhaps you can understand the position of the government.
TARP unfairly has become synonymous with bailout. Though some ofthe TARPed entities would certainly have to shutter without thosefunds, the bulk of recipients took these funds either at the behestof the government or to continue to grow their important functionsduring the current downturn. The second of these is especiallyimportant to the economy as they are the banks who are lending,enabling the few pockets of growth in today's economy to thrive.
Once you made that loan to your cousin/brother-in-law/half-uncle'ssister, did you subsequently notice him/her make a new luxurypurchase or perhaps go on a trip you think they might not haveotherwise? What was your reaction? Perhaps at this point you canunderstand how the taxpayer feels.
To most nonfinancial-sector employees, the word "bonus" reflectsthe Webster's definition of "something in addition to what isexpected or strictly due." The reality is the annual bonus paid inthe financial sector actually is expected, and while not strictlydue, it is certainly expected. For the nearly twenty years I'vebeen in the financial industry, I've received a bonus each year.I've had co-workers who received zero bonuses and took that,correctly, to mean they should immediately commence a job search -they won't be employed at that firm for long. One lesson WallStreet should learn here is to drop the word bonus from ourlexicon. Perhaps these payments should be called "expectedundefined annual payments."
How about the other side of these transactions? Have you everborrowed money and then been accused of spending extravagantly byyour cousin-in-law/step-grandfather/sister's father-in-law? Wereyou simply continuing your spending pattern as before, realizingyou'll...Read More