UMass Economics Wolff

Wolff: Bonuses for bankers, bankruptcy for public services

Richard Wolff

Richard Wolff, UMass Amherst economics professor emeritus, writes about the growing divide between the wealthiest 10% of U.S. citizens and the rest of the country.  He cites Goldman Sachs’ bonus structure as an analogy to this larger problem. Out of the $15 billion that Goldman pays out in bonuses, those at the top will each receive millions in bonuses (and much more in stock options) leaving less and less to trickledown the hierarchy.  And while big banks are distributing bonuses, states like California are forced to make extreme cuts to their budgets including higher education and Medicare.  According to Wolff, “US capitalism continues to dole out wealth for a few and austerity for the masses.”

Bonuses for bankers, bankruptcy for public services
Richard Wolff
Friday, January 21, 2011

The new governor of California announced last week that he proposed to cut about $1.5bn from the largest and arguably the best state system of higher education in the country. Such a cut will further damage the quantity and quality of the skilled and hi-tech workforce on which the nation’s economic future depends. Governor Brown also proposed over $1bn in cuts to the Medicare program providing healthcare to hundreds of thousands of California’s poorest residents.

Meanwhile, Goldman Sachs pays out $15bn, alongside the other big banks’ comparable payouts. More than yet another glaring contribution to social division, these contrasts represent stages on the path to self-destructive social implosion.