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BONUS BONANZA ON THE TAXPAYER DIME: FEDERAL WORKERS RAKING IN NEARLY A HALF A BILLION IN BONUSES
WAYNE ROGERS: Of course they should give it back. It's outrageous. I mean, when you think about that, you know, the government's not profit-oriented. They're not supposed to be rewarded. I mean, there is a GS schedule. That's what you get. You're hired to do a certain job, you fulfill that job, and that's what you are rewarded for is that salary. You don't get any bonus or anything extra. In private enterprise, you get a bonus because your earnings are better; your revenue is higher; all of those things. That's what a bonus is for. Otherwise it's a job and that job category has a price and that price is set and that's what it should be. There should be no bonuses and if there are, they should be given back to the taxpayers.
JONATHAN HOENIG: Well this is the "animal farm" syndrome we're seeing here Cheryl. In the private economy, bonuses paid with private dollars to financial companies, that's bad, but in the government, bonuses paid with tax dollars to public servants, that's good. I have to say, I disagree with Wayne. I don't think the bonuses per say are the problem. The problem is the size and scope of government, which in the last five years has grown in terms of workforce by 15 percent. We've got researchers, we've got librarians, we've got doctors, we've got teachers now all considered public servants on the dole. That's what needs to change, not another five or ten thousand dollars in bonuses.
JULIAN EPSTEIN: Well, I tend to agree with Wayne in a time, in particularly like now when the economy is in trouble. I don't think any federal employees ought to be getting bonuses, but just for some perspective, remember the Obama Administration has frozen all of the wages for federal workers and the Obama Administration has prohibited any bonuses for political appointees. They've cut this bonus program by about 40 million dollars and the bonus program, which has existed since 1978, essentially gives about one in every 10 thousand workers, who perform on an extraordinary level about a 30 percent bump in their salary because they've done that well. Now, in good times could you make the argument for it? Perhaps to incentivize extraordinary behavior I think you can make the argument, but again you've got to keep in mind this is something that's existed for a long time and the Obama Administration, if anything is cutting back on the pay and benefits for federal workers.
TRACY BYRNES: Well GSA's having a lot of fun with a lot of our money I guess. Look Cheryl, it's a little bit hypocritical right? I mean, we're coming down on Wall Street bonuses, we're coming down on Wall Street getting paid, and yet it seems to be okay for the government to get paid. I agree, I'm kind of on both sides of the fence with this as far as the way federal workers are paid this whole notion that it's a step up. They should be paid on merit. I think Julian's right. You know what? If you deserve a raise you should get it, but not now. Not when we are trying to cut down and hone in on our expenses. Stop the extraneous spending. It's just bad PR yet again.
JOHN LAYFIELD: I think if it's a fair market-value bonus, just as Tracy and Julian are saying, yes absolutely if these guys are doing something extraordinary, then yes. If it's according to what they're making in a regular free market society outside of government, then yes, I have absolutely no problem with that. I have no problem with teachers who are excelling in classrooms getting bonuses because they are teaching kids how to read and know how to do math. The problem you have in this entire government is you have graft from top to bottom and it all becomes white noise at some point. People say, well we just can't do anything about it. You can do something about it. You need to appoint some outside guy like Jonathan Hoenig, some smart internet research guy and say, we're going to give you five cents of every dollar that you save the country. You can do something about this, but politicians can't.
ARE UNIONS BATTLE WITH HOSTESS & AMR JEOPARDIZING JOBS IN AMERICA?
JONATHAN HOENIG: Well Cheryl, listen to what Hostess said, what American Airlines said, what General Motors said, what the public schools could say, it's labor costs for union workers that essentially put them on the brink; put them out of business in most of these cases. You know a job must benefit everyone; the employer and the union bosses and employees and if you look time after time, the unions have essentially destroyed the engine itself and destroyed the engine of productivity that pulls the whole train forward. They're like parasitic scavenger jaws that take the meat from the bones and move on to their next prey and Hostess and AMR are just the latest examples.
TRACY BYRNES: But look what they're doing to the company. You know what? If you bankrupt this company it's not just the pilots and the stewardesses and all these people that lose their jobs. What about all the ancillary jobs? What about the supply chain that builds up to get this flight off the ground? Look at Hostess. There's a huge supply chain. If you put Hostess out of business, it's not just the Hostess people losing their jobs. It is a load of people and they're not seeing the forest beyond the trees. They think selfishly. They want, they ask, they don't realize what else they're destroying.
JULIAN EPSTEIN: Well I think Hostess's biggest problem is not their labor problem. I think it's the fact that they sell junk and I think everyone loves to make the labor unions the fall guy here. Labor unions represent about seven percent of the private workforce and labor unions all over the country have been making concessions. The biggest problem with respect to John's point, is not labor unions per say, it's the health care costs and the auto industry and major industries have spoken about that time and again and you know, labor unions are the folks that gave us weekends. They're the ones that got rid of child labor laws and I know Hoenig would rather have 12 year olds sweeping chimneys. Labor unions are the institution responsible for giving us the middle class in this country.
WAYNE ROGERS: I don't think saving jobs is the answer. If you have a union dispute and the workers and the management are having a dispute, there's a place to solve that. If they can't bargain that collectively and they go into the bankruptcy court, that's why the bankruptcy court existed. That's what happened to General Motors. Unfortunately the federal government got involved in that one, but that's what it's there for and that's where it should be settled. Unions aren't doing anything wrong, morally wrong Jonathan and the management is not doing anything morally wrong. They're both trying to carve up a pie and you happen to be wrong and therefore the unions and the management have to work that out and bargain and if they can't that's why they go to court. They work it out in a free market system. If you believe in a free market system, you would underwrite that.
JOHN LAYFIELD: Well first of all, Julian is completely 100 percent wrong. There's nothing unhealthy about a chocolate, cream-filled cupcake. Yes you want to save jobs. It's not the unions' fault. Wayne is right. When you have Scott Boras, who is a super-agent, if he can get 25 million dollars for a baseball player and you have a management who's dumb enough to overpay that is overpaying, that is the management's fault for being stupid. There's nothing wrong with these unions asking. I disagree with intimidation, strong-arm tactics, but there's nothing wrong with them asking. It's the inept management and the inept politicians that agree to things that they know they can't fulfill and that's where it breaks down.
NEEDY STATES USING HOUSING AID MONEY TO PLUG BUDGETS?
JOHN LAYFIELD: Yeah, because you don't put strings, you don't put parameters on what that money has to go to. You look at states, they're getting about 34 percent of their money right now are federal transfers; they're getting the money from big brother, the federal government and they're not balancing their budget. The stimulus money went toward plugging budget gaps. You had to buy American bonds to go towards funding things where they don't have to worry about managing and keeping their own house in order. This is simply another example of that going on and somewhere it's got to stop.
WAYNE ROGERS: Of course it should. That's what the money was allocated for and they never keep an agreement. Governments don't keep agreements you know. Goodbye USA, hello Greece. That's where we're headed. State governments, municipalities; they're all doing the same thing. They're just copying the federal government. Everybody's spending money that they don't have and sooner or later we're going to have to file for bankruptcy just like everybody else does.
TRACY BYRNES: I don't know why anyone is surprised by this. It's like giving a crack-head money and saying go buy carrots and lettuce. Really? So if you believed that the government was going to go and properly spend these handouts...maybe cupcakes?
JONATHAN HOENIG: I would hedge my shelf and buy maybe one cupcake and one apple and do both sides of the trade there, but I'll tell you I mean, the bailouts we know don't work. They evade reality; they prompt the problems to be elongated rather than shortened and actually addressed with, but this is essentially theft plain and simple. I mean, if you don't have property rights, than no other rights are even possible and once you make the banks scapegoats for everything, then it's almost like who cares what they do with the money. They give it to struggling homeowners. They give it to families to pay their lighting and heating bill. I mean, it's literally free grab and the banks are the ones that pay for it all.
JULIAN EPSTEIN: It's outrageous. This was a 25 billion dollar settlement for victims of fraudulent and deceptive loan practices and the states are now using this money as a slush fund. It's absolutely outrageous. The federal government should have put the conditions that John's referring to. As to Hoenig's point that bailouts don't work, which is a separate point, I mean it's just nonsense. It's so counter-factual. We know the TARP program has worked. It's going to make taxpayers billions of dollars. The auto-industry bailout worked so I mean Jonathan just said stuff that is false. We haven't made back all the money on the auto bailout, but we have on TARP Jonathan. That's a matter of fact at this point and it's beside the point of the discussion. The discussion right now is about the misuse by the states of the settlement money with the banks. I totally agree it's absolutely outrageous. It shouldn't have happened. The feds should have stopped it.
WHAT DO I NEED TO KNOW?
TRACY BYRNES: Lawmakers continue to bash banks and oil, but not Facebook
JOHN LAYFIELD: Dial up stability with (T) as Greece and Europe implode
WAYNE ROGERS: Invest in companies that invest in themselves. Buy (QCOR)
JONATHAN HOENIG: Spam tasting mighty good in this bad economy. Buy (HRL)
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