It is hard to imagine the Chutzpah of the Week award for this week going to anyone other than David Viniar, Chief Financial Officer of Goldman Sachs. (Yes, I suppose there are some who claim it is Charles Taylor's turn, but I did not see enough panache in his protestations to achieve a level of genuine chutzpah.) The news behind this week's award is definitely the "miracle" recovery of Goldman Sachs over the last two quarters and the investment bank's response to that recovery. It is in that response that the chutzpah resides. According to a BBC NEWS report released this afternoon:
The bank said it had set aside $6.65bn for pay and bonuses in the quarter - an average of $226,000 per employee.
Please note that those figures apply only to the recently-ended quarter. Bonuses are not paid out until the end of the year. We are already seeing some likely estimates:
Analysts had already predicted that the annual payout in 2009 for its staff could be nearly $18bn - or an average of more than $600,000 per person.
As to why I decided to single out Viniar, it all comes down to one sentence out of a public statement he released:
We are helping the economy to recover.
Say what? It is easy enough for me to see how Goldman is helping both its shareholders and its employees (note the listing in order of importance) recover; but what exactly is Goldman doing for the rest of the United States (or, for that matter, the rest of the world)? This is not a rising tide that will lift all boats. This is a flood of capital that will enable a few of the rich and mighty to buy more boats!
One commentator on Morning Edition managed to penetrate the smoke screen. He started connecting the dots between the "Goldman Sachs legacy" in the Obama Administration and the fact that Goldman got bailout money while its chief competitors did not. Does anyone smell any rats in this story?