For directors of some of the nation’s largest banks, the financial crisis is now just a fading memory. Whatever role they may have played in the financial crisis that cost many taxpayers their homes and savings, they have come through unscathed. Bank board members are enjoying big increases in their compensation along with hefty bonuses.
Case in point: The average director at Goldman Sachs received $488,709 in compensation and bonuses in 2011 – the most recent year for which figures are available. That represents a 50 percent increase from 2008, at the depth of the banking crisis and recession, according to The New York Times. And that compensation is likely to go up even higher for 2012 since Goldman’s shares rose more than 35 percent last year and board members are paid in stock.
But Goldman Sachs isn’t alone. Many banks are paying a premium to keep qualified directors since many were criticized for being “asleep at the wheel” and not understanding the risks they were taking during the financial crisis,” The New York Times’ Susanne Craig writes. “Recruiters say banks are redoubling efforts to recruit directors with more financial expertise who can exercise better oversight.” - Read more at The New York Times
STUDENT LOAN RATES HANG IN THE BALANCE Education advocates are pressing President Obama and members of Congress to prevent college loan interest rates from increasing this summer. Government-subsidized student loans, including the Stafford Loan, are set to double from 3.4 percent to 6.8 percent on July 1, unless Congress steps in and extends the lower rates for another year. But with new budget restraints from sequestration, students and other advocates are growing anxious. They'll find out when Obama releases his fiscal 2014 budget on April 10. - Read more at The Hill
HOW THE MEAT MARKET ESCAPED SEQUESTRATION There are a few notable exceptions to the so-called “across-the-board” sequester cuts. After intense lobbying and fear mongering by Agriculture Secretary Tom Vilsack, the Department of Agriculture was recently granted an extra $55 million of budget breathing room to avert furloughing their employees. According to the Washington Post’s David Fahrenthold and Lisa Rein, “There’s a story there, about how power and lobbying can still make money appear in Washington, even in this age of austerity.” - Read more at The Washington Post
DID THE FAA CRY WOLF? “The much-feared budget ax is turning out to be a slow-rolling series of snips, with effects that have been much more gradual or modest than projected,” reports POLITICO’s Kathryn Wolf and Burgess Everett. “Airlines have yet to suspend or cancel flights in response to the cuts, even though Transportation Secretary Ray LaHood predicted during a White House appearance Feb. 22 that they would do so within the next 30 days…and far fewer airport control towers are facing potential closures than the 238 that the Federal Aviation Administration warned about in February.” - Read more at Politico
STOCKMAN: ‘THE FUTURE IS BLEAK’ “The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating demand, even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls,” Reagan White House budget director David Stockman opined in Sunday's New York Times. “The culprits are bipartisan, though you’d never guess that from the blather that passes for political discourse these days. The state-wreck originated in 1933, when Franklin D. Roosevelt opted for fiat money (currency not fundamentally backed by gold), economic nationalism and capitalist cartels in agriculture and industry.” The op-ed coincides with the release of Stockman’s new book, The Great Deformation: The Corruption of Capitalism in America. The pessimistic opinion received some expected critical feedback by both former Obama White House economics adviser Jared Bernstein and Paul Krugman, economist and liberal columnist for The New York Times, both of whom deemed it over the top. - Read more at The New York Times
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