Yesterday, reacting to a New York State Comptroller report showing that Wall Street banks doled out $18.4 billion in bonuses in 2008, President Obama denounced the practice as “shameful.” “That is the height of irresponsibility. It is shameful, and part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility,” Obama said emphatically. The same day, the Congressional panel overseeing the Troubled Asset Relief Program (TARP) recommended that financial regulators revoke bonuses for executives of firms seeking government help.
Appearing this morning on CNN, however, former New York mayor Rudy Giuliani stridently defended the practice of enormous bonuses untethered to actual performance, warning that ending the tradition “really will create unemployment”:
GIULIANI: I remember when I was mayor, one of the ways in which you determined New York City’s budget, tax revenues, was Wall Street bonuses. Wall Street had a billion, two billion in bonuses, city had a deficit. Wall Street had 15 to 20 billion, New York City had a 2, 3 billion surplus. And it’s because that money gets spent. … It does have a reverse effect on the economy, if you somehow take that bonus out of the economy. It really will create unemployment. It means less spending in restaurants, less spending in department stores. So everything has an impact.
Even as he was pushing for more billions to be handed out to failing businessmen, Giuliani railed against President Obama’s tax cuts for the poor: “That’s not stimulating the economy, that’s solving some kind of social agenda.” He was more explicit last week, condemning the tax cuts as “welfare” with Fox News’ Sean Hannity:
GIULIANI: Yes, if — somebody is not paying taxes is going to get a check from the government, then that is welfare. You haven’t earned it, that’s a welfare payment. I think he’s going to have to abandon that in light of the economic situation.
HANNITY: Are you thinking that he’s really — he’s going to abandon all these things?
GIULIANI: I think so.
Conservatives raised the “welfare” scarecrow throughout the presidential campaign, even though the claim is bogus. As Factcheck.org pointed out, “a worker can be a ‘taxpayer’ whether or not they owe any income tax.” Nearly every worker pays Social Security and Medicare taxes — “totaling 7.65 percent on every dollar of earnings” — and Americans pay federal taxes every time they buy gasoline or pay a phone bill, for example. Congressional Budget Office figures show that even the lowest-earning households pay about 4.3 percent of their income to federal taxes. At the end of the CNN segment, Giuliani pushed for more bailout funds for investment banks. In other words, Giuliani is all for Wall Street welfare that fuels a skyrocketing cost of living, but virulently opposed to tax cuts for the poor that help fuel an economic recovery.