Wall Streeters "Can't Live on $150,000 to $180,000 a Year"

by: David Sirota

Mon Feb 02, 2009 at 12:00


Another snippet for the I Shit You Not File: In the New York Times, a head hunter for banks defends the $18 billion in taxpayer-subsidized bonus payouts to Wall Street executives and traders by insisting that those executives and traders can't be expected to live on $150,000 to $180,000 a year - I shit you not:

"Without a doubt, $18 billion is a lot of money, but it's a drop in the bucket on Wall Street," said Gustavo Dolfino, president of the WhiteRock Group, a headhunter for the banks. "These bonuses are down, and the salaries are not enough for these people. They can't live on $150 to $180,000, so they haven't saved any money. They put it on credit lines and at bonus time, they thought they'd pay it off."

The median household income in the United States is about $49,000, according to the U.S. Census Bureau - and that's for full, multi-person households. But Wall Street would have believe that individual executives and traders "can't live on $150,000 to $180,000 a year," and so the same taxpayers whose median household income is $49,000 a year must subsidize their bonuses.

Welcome to the kleptocracy.

David Sirota :: Wall Streeters "Can't Live on $150,000 to $180,000 a Year"

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this is not news (4.00 / 1)
if you live in NYC you know this attitude is pervasive. Brokers every day are vocal about hoping to get more bailouts. Their portfolios are underwater and we're going to retest the Nov lows before too long.

~* the * Will * to go on *~

The time will soon come, I think, (0.00 / 0)
when the November "lows" will seem high.

[ Parent ]
Yeah, obscure...I have a story for that. (4.00 / 1)
I dated a woman who became a broker at one of the big firms. I was really interested....right up until the day I got the speech about how working at the firm was all about "helping people." If you'd taken the firm name out and substituted "Doctors Without Borders" or "AmeriCorps," it would've made sense.

I went from interested and attracted to "Who is this woman?" and "Where'd I park my car?" in 1/2 a second.

I don't know what I felt worse about, that I misjudged her so badly or that she thought I'd buy that b.s.


[ Parent ]
Wealth Tax NOW! (4.00 / 3)
Had enough?

80% tax on all accumulated, intangible assets above $20 million.

They don't like 180 K salaries?  How about a nice haircut on your hedge funds where you socked away your mostly ill-gotten gains.

It's not about income, it's about accumulated wealth-which they stole, mostly didn't pay taxes on and which we now need to take back and recirculate in the form of green infrastructure.

Simple justice demands it.  


No kidding... (0.00 / 0)
This mess has gone beyond where even a New Deal-style redistribution can fix the problem -- what we need is not FDR redux, but Huey Long Redux.  Share Our Wealth!

"A fantasy is not even a wish, much less an act.  There is no such thing as a culpable or shameful fantasy."  -----Lady Sally McGee

[ Parent ]
Right on Brother! (0.00 / 0)
That's exactly what I've been talking about!

[ Parent ]
No... (0.00 / 0)
80% is fucked up.  It was wrong in FDRs time, and would be wrong now.   NO ONE should have to pay taxes above the percentage of income they can keep... I can support a tax rate up to 50%.... above that is just plain wrong.

[ Parent ]
OK 50% it is (0.00 / 0)
Here's what that buys you

William Gates III        $57 billion
Warren Buffett       $50 billion
Lawrence Ellison        $27 billion
Jim Walton                $23.4 billion
S. Robson Walton        $23.3 billion
Alice Walton                $23.2 billion
Christy Walton       $23.2 billion
Michael Bloomberg $20 billion
Charles Koch                $19 billion
David Koch                $19 billion

$143 billion out of just the first top ten.

Hit all those with 20 million or more squirelled away and we're talking a couple of trillion, easy.

Green stimulus, single payer, free public education, balance all state budgets.

Taxes are the price we pay for civilization, as Justice Holmes said.

What's not to like?



[ Parent ]
I agree that they sound ridiculous (4.00 / 7)
But three thoughts.

(1) Actually, living in New York on $150K to $180K is hardly living the high life.  Poor? No.  But if you have kids in private school or day care, and are paying mortgages in Manhattan, Westchester, or Fairfield, you could be quite "house poor" $180K

(2) Living on $150-180K is not the alternative to taking away 100% of bonuses.  These people made well in excess of that on their base pay.

(3) I don't care whether they can or can't live on their base salaries.  The fact is that the bonus system is essentially a profit-sharing system.  No profits, no bonuses.  Cry me a river.  If someone loses their entire stock portfolio through bad investments, you can't write to the government and say "I can't live on $0, please give me some money for my worthless stocks."  Same should be true with bonuses.  


CNN cost of living caluclater says (4.00 / 2)
Making 49,000 in Topeka Kansas is equivalent to making 123,000 in Manhattan.

Or, the other way around: a household making 330,000 in Manhattan is equivalent to a household making 132,000 in Topeka.  Still very well off.

Or...
153,000 in Peoria
144,000 in Atlanta
133,000 in Baton Rouge
141,000 in Akron
etcetera...

Link.

As space said, cry me a river.


[ Parent ]
the high life (4.00 / 1)
(1) Actually, living in New York on $150K to $180K is hardly living the high life.  Poor? No.  But if you have kids in private school or day care, and are paying mortgages in Manhattan, Westchester, or Fairfield, you could be quite "house poor" $180K

No, yeah, it is living the high life actually. Making more money than 99.8% of the world's population and living in New York City is the high life.


[ Parent ]
if you lower the wall st salaries (4.00 / 3)
then all those costs in NYC will come down. NYC is only expensive because people are rich - people don't need to be rich because its expensive. You have the tail wagging the dog.

~* the * Will * to go on *~

[ Parent ]
Exactly (4.00 / 2)
And the govt. needs to stop, like, yesterday, artificially propping up those prices.

The run-up in prices, in a lot of sectors, in the last 10 years, but certainly since early 1988, has been fueled by bad monetary policies from the Fed, which led to unsustainable bubbles. Housing was but one of those bubbles.

Prices MUST be allowed to come back into line with reason.  


[ Parent ]
Ah Justifying... (0.00 / 0)
See this kind of justification is why most people like New York, but HATE New Yorkers.

[ Parent ]
Saw that :) (4.00 / 3)
I thought the excuses were insanely expensive homes, schools for their children, and general entertainment. It is not as if people don't live in New York perfectly well on less than $150,000 a year, but they don't feel entitled to take advantage of all it has to offer. It seems that they are embedded in a sub-economy which sprang up to take advantage of fabulous wealth and bonuses.  

Darkness has a hunger that's insatiable, and lightness has a call that's hard to hear.  

Thank you, David. (4.00 / 2)
The median household income in the United States is about $49,000

That's family income.  And that means 50% of families/households are under $49,000.

Class privilege and entitlement fully on display.  


Yes. And . . . (4.00 / 1)
Some ridiculously high fraction of all families have NEGATIVE net wealth.

Does anybody have the number?

The income gap is outrageous enough.  The wealth gap is even more so.

That's the ball we need to keep our eye on, IMHO.


[ Parent ]
high fraction of all families have NEGATIVE net wealth (0.00 / 0)
That's why we need more lending!

yawn.

~* the * Will * to go on *~


[ Parent ]
wow (4.00 / 2)
What's amazing is how these people keep saying this sort of thing. They STILL do not get it. It's like if you were talking shit about someone behind their back, and your buddy starts making slashy gestures at his throat and pointing behind you and obviously trying to get you to shut up because the person you're talking shit about is right there behind you and only a moron wouldn't get the signals, and yet you just keep on talking shit. Incredible. It's seriously 'let them eat cake' time in the US of A.

I'll be honest (4.00 / 4)
You can live decently on that much in New York, but it is certainly not the high life.  I'm actually in that range and I have a one-bedroom apartment, some beat up furniture, and a little bit of rainy day money in a checking account.  Luckily I don't have a kid or any other dependants or I would have virtually nothing left over after my various payments - student loans and taxes eat up a lot more than you might expect, and this city is expensive as hell to begin with.

Anyway, this diary is a little misleading if cost of living and other variables are not factored in.  A family would be hard-pressed to live on that amount if they lived in the city.


They can move to a cheaper part of the country (0.00 / 0)
.

My blog  

[ Parent ]
More than a little asinine (4.00 / 5)
Seriously, the solution is that people should move out of New York?  That's almost akin to saying that people who live in natural disaster zones shouldn't expect taxpayer-funded emergency services.

I'm not saying it's right, but there's a complete lack of perspective in this thread which is counter-productive and frankly looks foolish to someone on the ground, as it were.  I also think it's ridiculous that people should have to make so much to get by in a city when they can live much more cheaply elsewhere, but a mass exodus from New York just isn't going to happen.


[ Parent ]
These people are not facing starvation or (4.00 / 2)
homelessness, just downscaling their lifestyle.  They are not Katrina victims, and most of them would tell people like Katrina victims to take a piss, and they did.

My blog  

[ Parent ]
Is it? (4.00 / 3)
That's almost akin to saying that people who live in natural disaster zones shouldn't expect taxpayer-funded emergency services.

Really?  If you could live within your means outside of New York but can't live within your means in New York, it's right that the taxpayers should fund your choice of home town?

OK, I know you're not saying that but if people in the heartland are losing their jobs, why should they have any sympathy for people who can't afford to live in New York but wouldn't dream of leaving it?

This economic crisis is causing a rethinking of all kinds of attitudes.  

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.


[ Parent ]
And... (4.00 / 2)
...if ENOUGH people can no longer afford to live in Manhatten at a certain dollar level, guess what? Prices will have to come down. For condos, lofts, apartments, etc. They just will.

Unless the US govt. continues to try and artificially keep that bubble afloat. Which it must not.


[ Parent ]
It's not exactly asinine (0.00 / 0)
These people largely made their money promoting corporate and social policies based on treating people like resources and nothing more.  What's most efficient?  Well, close a plant here and open it there, and people will "maximize efficiency" by following the jobs.  Never mind uprooting themselves from their community, damaging their children's sense of stability, having to start over.

Guess what, it's not asinine at all to expect these people to live by the rules they enforced on the rest of us by using their starting point of excess wealth to wring ever more dollars out of the profit we should have been able to keep for ourselves.

They can go where the jobs are.


[ Parent ]
Huh? And if your job is NYC dependent (0.00 / 0)
or you have family in the city or the metro area?  What then?  

[ Parent ]
There're not starving (0.00 / 0)
or anywhere near it.

My blog  

[ Parent ]
Then you lose your career... (0.00 / 0)
...which is what they are saying would happen...

You can put income limits as a matter of course, but, when nobody shows up tot do the job... well...

Of course, considering how badly these folks have been doing their jobs, maybe that's a good thing?

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!


[ Parent ]
I don't really understand the point of this argument (0.00 / 0)
they can still well afford to live there at under that amount, just at a reduced lifestyle.   I would like to earn a 150,000 dollars a year, and live in Manhattan too.  

My blog  

[ Parent ]
You've got 2 kids... (0.00 / 0)
...and you'll end up living in in a one bedroom apartment?  No... screw that.... you're going to get another job or leave New York for more friendly climes...  If you leave New York, you are probably not going to work in the finance industry, and the finance industry won't have any New Yorkers willing to work for the industry...

Think of it this way.  What if your company suddenly cut your pay by 2/3rds?  Would you stick around for very long?  You'd probably box up your stuff in an hour....

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!


[ Parent ]
That was a three bedroom (0.00 / 0)
.

My blog  

[ Parent ]
Not all New York careers are finance careers (0.00 / 0)
Tons of "knowledge" professionals in publishing, fashion, media (not all MSM btw), film, art, non-profits, education, etc. Lots of small businesses too.

Should they all lose their careers and move to other parts of the country because the cost of living is so high?

The upside of this crisis is that hopefully the NYC economy will balance out and become less finance dominated.  That should impact affordability.  


[ Parent ]
I am an artist (4.00 / 1)
and I can't afford to live in Soho, though I would like to.  You act as if many people haven't already foregone careers in NYC because it is too expensive.

Cost of living was the reason the Greenwich Villiage Art Scene died in the 60s.

My blog  


[ Parent ]
But it's migrated to Williamsburg and Greenpoint (4.00 / 1)
So there's still a NY art scene.

Trust me, I get sick to my stomach when I walk through SoHO and see those big gorgeous buildings taken up with high end leisure class fluff and junk.  It just kills me to say nothing of the bullshit going on on the Bowery and the LSE. Revolting.

But the good thing about New York is its constant evolution.  With the crash, perhaps art, artitsts and musicians can make their way back to Manhattan again.  


[ Parent ]
primarily because stockbrokers (0.00 / 0)
leave.

I've been looking at inwood for some time and no for a fact that apartment would have been at least 1,500 a month 3 months ago.

My blog  


[ Parent ]
As a grad student (0.00 / 0)
...and someone who didn't quite crack $18k last year (I just did my taxes), $150-180k sounds pretty extravagant to me. Granted, I don't have a family to support and this is a fairly cheap area, but I certainly can't start a family until my financial situation improves. Thank goodness I have 3-5 more years to go, hopefully there will be some jobs by the time I'm out.

[ Parent ]
I changed careers and moved back to New York recently (0.00 / 0)
and am making 1/2 of that range with a kid in college and my disposable income/ability to save is now roughly what it was when I was just a couple of years out of college.

It's pricey.  But it does have advantages to it that you just can't find anywhere else.


[ Parent ]
It is only pricey in certain neighborhoods. (0.00 / 0)
particularly manhattan.  http://www.washington-heights....  Mind you 3 months ago this listing was probably three times as high, but still completely affordable on 75,000 a year you say you're are earning, particularly if you son pays part, and you take in another roomie.

My blog  

[ Parent ]
7% of my gross goes to transit costs (4.00 / 1)
During a wage rollback, which we're under now, it increases to 13%.  That has nothing to do with neighborhood affordability.  Food, household neccessities, shoe repair, dry cleaning, all this stuff costs more in NYC and the tri-state area than it does elsewhere.  

It's a pricey place to live and the national median severely understates the income needed to maintain even a moderate middle class existence in NYC.

And thanks for your advice, but I live pretty damm cheap and kid lives out of state on campus.  Plus, I'd like to think we're actually getting ahead a wee bit and not have to revert to taking in boarders like my great-grandmother.  Hey, maybe I could take in other peoples laundry like her too.  


[ Parent ]
Damn, you must have a healthy drug or hooker habit! (4.00 / 2)
I lived in NYC for 8 years in the late 90's up until two years ago.  I never made more than 70K. The last two years I lived by myself in a two bedroom apartment in Queens and was saving on top of maxing out my 401K!  

Sure there were years where I lived in a $700/mth illegal basement apartment with only a window in the bathroom or shared a place with a roommate, but even then I was saving money while eating and drinking with friends in Manhattan every weekend.

NYC is only ridiculously expensive if you insist on living alone in some posh part of Manhattan.  The problem isn't the expenses of NYC its the Wall Street culture that demands posh apartments, private schools, expensive cars, and a weekend place on Long Island.    


[ Parent ]
THEN DON'T LIVE IN FUCKING MANHATTAN!!! COMMUTE YOUR ASS IN! (0.00 / 0)
I have no sympathy at all.

[ Parent ]
Yes, the cost of living is different in NY. (4.00 / 5)
I have no doubt that they "can't live" on $180,000, where "living" is defined even just as paying their bills, forget about maintaining their lifestyle.

I really do believe them.

I just don't care that much.

The economy sucks. And you run it. Feel the suck.


Some people missing forest for the trees (4.00 / 3)
Getting sucked into a debate as to whether making $175k/year while living in Manahattan makes you rich is a completely unproductive exercise.  

Is $180k "the high life", upper middle class, or just middle class?  What about $50k in Topeka?  Who gives a shit?  It doesn't apply to the issue of Wall Street bonuses.

The AVERAGE salary at Goldman Sachs is in excess of $600,000/year, before bonuses.  Why are we discussing $180k?

Most doctors, lawyers, and other executives should be outraged since they are going to bear the brunt of the bailout.  They already pay the highest taxes.  Their stock portfolios have already taken a hit.  Now, they are being asked to bailout people who make 10x, 20x, or 100x what they earn.  Why would we want to discourage their outrage by getting into pointless debates over whether they are living the high life?


Average (0.00 / 0)
Though be careful with the use of averages; the high end will always skew the results.  (If Bill Gates walks into a soup kitchen the average salary of those in the room will be quite impressive!)  Do you know what the median salary is?

[ Parent ]
Scary part is it is probably true (0.00 / 0)
When you have a huge mortgage dependent upon yearly bonuses, when you send your kids to schools that cost tens of thousands of dollars, when you hire people to maintain your lawn, when you set up your entire life on the assumption you'll always have lots of money you will find you need lots of money to live your life.

None of that, none of that justifies them getting this money.  All this is their problem, not ours.


That is absolutely correct (0.00 / 0)
They are no more entitled to the standard of living to which they have become accustomed than any of us are. And certainly not entitled to a bailout of that standard of living by the US government (and taxpayer).

I don't get why that is so hard to grasp. Of course it is awful when people lose jobs and investments fail. But that has been happening all over the country for a lot of people, and they are being left to fend for themselves. And somehow the Wall Street types think they are entitled to be treated differently? Especially when you consider that they themselves are responsible for the economic disease eating away at the country?

It is rage-inducing.


[ Parent ]
You sacrifice and move... (4.00 / 1)
Most of the rest of us sacrifice.  Screw these irresponsible assholes... THEY live beyond their means.

[ Parent ]
Reality Check (0.00 / 0)
So they can't live the high life... welcome to the Reality that most of the rest of us inhabit every day.  

Different roles (0.00 / 0)
What most people who talk about reality check don't get are the people at the top of these corporations have certain skills that actually makes them suitable for those positions. I totally agree they messed up - a lot of people did. That doesn't mean that you can replace the upper management and expect things to go smoothly.

My point is that these people are at the top because they are really in a different "leage" then most people complaining about the whole thing. Yeah, it's not fair, yeah it sucks, but if you slash their salaries by 2/3 they are simply not going to stick around. Who's going to run those companies that are so vital to the economy? Are you? I'm pretty sure these people have many more "options" available to them then avg american, so taking 2/3 cut will simply make them leave.

Think of it as form of extortion. "Yeah, we screwed up. But you kinda need me, so make like a tree and pay up". Not fair but true


[ Parent ]
Who's going to run the companies they screwed up? (0.00 / 0)
Um....no one? Because unless the government steps in, those companies will FAIL. They CAN and SHOULD FAIL. Those geniuses ran perfectly fine companies into the ground. Spare me the "they're better than you" bullshit. They are not. They fucked up, and rather than deal with their fuck-up, they have talked the government into covering their tracks. So maybe in that repsect they are smarter than I am. If I fucked up that badly, I probably wouldn't be able to get Congress to shovel me bilions of dollars.

Fuck them.


[ Parent ]
No (0.00 / 0)
They WERE THOUGHT suitable for these positions based on a logic that has been proven to be completely bankrupt because "everyone" believed in assumptions that weren't true.

Now that we know these assumptions weren't true, the calculus that said these people's skill sets were extremely valuable is no longer valid because the whole enterprise turns out to have been flawed, and rotten at the core.

Would anyone have said that the "Captains of Industry" and "Wall Street Wizards" of the 1920s had special skill sets that entitled them to continue to be paid AFTER the 1929 crash as they had been before?  I don't think so, their skill sets had been devalued.

Or how about the geniuses who masterminded the Dutch tulip craze of the 17th century?  

Etc. Etc.

This is a new day, but you don't want to see it.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.


[ Parent ]
Oh please (0.00 / 0)
First, where are they going to go? Most of them have to work, and where are the better-paying jobs for people with their very limited skills these days?

Resume: Ran top-tier bank into the ground. References available upon opening any major newspaper...

And second, it's not as if there aren't well-qualified (and likely more qualified) people in the tier or two below them ready to take over if the top tier leaves or is fired. These companies are VERY good at hiring and grooming talent (I've worked for some so I know what I'm talking about), who would happily work for less--also in large part because there are no viable alternatives right now.

Seriously, we can't survive without Dimon, Pandit and all these other Weill and Greenberg clones? That's just silly. And where are they going to go, China, India, Russia? Hah.

Nice try.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


[ Parent ]
As many have already pointed out (0.00 / 0)
It IS actually hard to live in NYC on less than this...if you insist on living in the ritzier sections of Manhattan or Brooklyn, eating out in expensive restaurants every day, buying expensive clothes and furniture, going on expensive vacations, having a second or third home, summering on Martha's Vinyard, sending your kids to private school, having a live-in nanny or maid, taking cabs all the time, driving a Porshe SUV, etc.

Yup, it's totally hard.

And FWIW, I lived in Manhattan for over 8 years not long ago and was able to live reasonably well on far less than this. I wasn't living the high life, but I wasn't eating rice and beans (if I was lucky) every day. How much one needs to make depends a lot on what kind of life one wants to live. There's nothing wrong with living well, but not on the government dole.

Earn it yourselves, Wall St. Welfare Queens, or live like the rest of us for a change.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


Well... (0.00 / 0)
They can't afford it because they stupidly and irresponsibly bought everything on credit, exceeding their livable income, expecting to pay it back with bonuses.    In essence, they are dumb fucks.  

Fuck them.  Let their credit card bills run up.  I want every one of those bonuses returned, or have the hell taxed out of them.    

And Gustavo needs to have his ass kicked.  hard.


And of course, in a funny irony (0.00 / 0)
they owe money to the very companies that they work for. So we'd be bailing these companies out twice if we allowed these bonuses to be paid.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

[ Parent ]
they gambled the nestegg (0.00 / 0)
Anyone remember Albert Brooks' movie Lost In America?
This hilarious clip seems appropriate here

http://www.youtube.com/watch?v...


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