5 Uses for Wall St.'s Bonuses
Bonuses on the Street are up 17 percent in 2009, to more than $20 billion—nothing to scoff at, but far from the subprime years.
Bonuses on a resurgent, if not shrunken, Wall Street bounced back to more than $20 billion in 2009, up 17 percent from the year before, according to new data from the New York Comptroller's office. The average bonus was $123,850, and at three of biggest banks on the Street—Goldman Sachs, Morgan Stanley, and JPMorgan Chase, all of which taxpayers bailed out—bonuses jumped even more, up 31 percent from 2008. Mind you, 2009's bonus checks are nowhere near the ludicrously high totals we saw at the peak of the bubble, like the $34 billion in 2006 and $33 billion in 2007. (Who can forget this typical New York Times headline from bonus season in 2004: "That Line at the Ferrari Dealer? It's Bonus Season on Wall Street.") Still, when one in five Americans is "underwater" on their home and nearly one in ten are unemployed, $20 billion in bonuses is a staggering, incomprehensibly large sum that could go a long way if spread out across the rest of the population.
In that spirit, here are five alternative uses for that $20 billion in bonuses that might alleviate our current economic woes:
- You could pay the salaries of more than 390,000 public school teachers across the country.
- You could close nearly all of California's gaping budget hole.
- You could almost cover unemployment-fund shortfalls, now nearing $25 billion, in 25 different states.
- You could more than double the amount of Pell Grant funding given to students from low-income backgrounds who might not attend college otherwise.
- You could increase the budget of the Small Business Administration by more than 35 times, a much needed boost considering the SBA's coffers had dwindled from $3.5 billion in 1978 to $578 million in 2008.
But really, we'd all rather have a Ferrari anyway, right?