Financial 'expert' Erin Burnett doesn't understand the term 'fungible' - ignorantly defends bonuses

[ProfessorPlum]

Run time: 03:45 https://www.youtube.com/watch?v=wFIPs0zEI5c   Posted on YouTube: February 02, 2009 By YouTube Member: Views on YouTube: 0   Posted on DU: February 02, 2009 By DU Member: ProfessorPlum Views on DU: 1237

 
Yeah, it's shameful, you corporate whore. and I mean that in the nicest possible sense.

[pa28]

1. There seems to be a "bonus cult" on CNBC

They are always doing verbal gymnastics to try to explain and justify. Like how she claims the bonus money (or "compensation") is "different money" in "seperate accounts" Oh really? I'd like to know how she found that out.

It's totally false. If the government had not intervened with massive amounts of cash many of these institutions would be closed and liquidated by now. It's willfull ignorance. Insiders and financial journalists know, probably better than anyone, that the government subsidized or even paid outright for these bonuses.

Another thing grinding my gears - they often cite "retention of talent" as why massive bonuses are non-negotiable. Well NOBODY IS HIRING and there are massives layoffs in the financial industry as well. Where are these supremely talented people going to go? And if you look at the results I'd say the "talent" is questionable in the first place.

Uhg. I see something like this and it just seems like an argument in itself for nationalizing the big institutions and banks.

[underpants]

9. Jack Welch

former GE CEO Jack Welch still looms large at 30 Rock and all GE operations

he is the epitome of the "Master of the Universe" persona.

[flobee1]

2. sorry bimbo-thats NOT how it works in the real world

I worked my butt of for a company and that company had a bad year
I got no christmas bonus
I didnt even get a raise

If the bank does not have enough money to keep its doors open
it also does not have enough for bonuses
and it also does not have enough money to buy another bank
or to buy oil tankers

And I want to hear her explain the AIG bailout vacation to me too!

[leftchick]

3. Experts dispute claim by CNBC's Burnett that size of Wall Street bonuses is unrelated to TARP money

Experts dispute claim by CNBC's Burnett that size of Wall Street bonuses is unrelated to TARP money


http://mediamatters.org/items/200902020020?f=i_latest


Responding to criticism of the estimated $18.4 billion in bonuses paid in 2008 by Wall Street firms -- some of which had received federal funds from the Troubled Asset Relief Program (TARP) -- CNBC anchor Erin Burnett stated during the February 1 edition of NBC's Meet the Press: "The taxpayer money isn't being taken and paid out in the form of bonuses. It goes in a separate pool, shall we say, a separate account for banks." Burnett's assertion ignores the basic economic principle that, as the Government Accountability Office noted in a report on the TARP Capital Purchase Program, "money is fungible"; indeed, numerous experts have reportedly stated that without the federal assistance, Wall Street bonuses would have been much lower. And the GAO stated: "Generally, the institutions stated that CPP capital would not be viewed any differently from their other capital." Further, in an October 2008 Time magazine article, Money magazine senior writer and Time.com contributor Stephen Gandel quoted Brad Hintz, a former chief financial officer for Lehman Brothers, saying of Morgan Stanley and Goldman Sachs: "Had it not been for the government's help in refinancing their debt, they may not have had the cash to pay bonuses."

According Gandel, "Bonuses for investment bankers and traders are projected to fall 40% this year. But analysts, compensation consultants and recruiters say the drop would be much more severe, perhaps as much as 70%, were it not for the government's efforts to prop up financial firms."

During Meet the Press, host David Gregory aired a video clip of Sen. Claire McCaskill (D-MO) criticizing the bonuses after a report from the office of New York state comptroller Thomas P. DiNapoli found that bonuses for 2008 would be the sixth largest in history. Burnett responded:

[pansypoo53219]

4. she speaks bullshit

for republikans. bet she LOVES ayne rand too.

[elleng]

5. I wouldn't say that she doesn't UNDERSTAND fungible;

lets not call people ignorant when we disagree with their points of view.

[ProfessorPlum]

6. ? Are you scolding me for something?

Or are we just being super secret sarcastic?

[elleng]

7. None of the above.

I hope you don't feel 'scolded' every time someone disagrees with you.

NOR sarcastic; its a political/social point I'd like to make: there's an awful lot of calling the 'opposition' or 'opponents' stupid, etc., when we merely disagree with their points of view. Its much more constructive to examine the differences of opinion and try to figure out WHY, imo.

[ProfessorPlum]

12. I guess I should have put "doesn't understand" in quotes, too

You see, we already know that Erin Burnett understands that money is fungible - in other words, it doesn't matter that some money is in one account and used to pay bonuses, while other money that is provided by the government is kept in a separate account and used for other things. Because it all adds up to money that the company can use. That's what fungible means - keeping money separate like that doesn't make it any more sensible for big companies to spend money on bonuses when they are getting taxpayer money from the government.

Of course she understands that. But the amazing part about her performance above is that she is pretending not to, in order to provide cover for the whorporate thieves. Of which she is one.

See what I'm getting at? My title was ironic - Burnett knows what she is doing, trying to pull a fast one by pretending that separate accounts makes it OK. I'm not calling her ignorant, I'm calling her a filthy liar.

But thanks for trying to keep things more civil.

[elleng]

13. u r welcome.

I appreciate that!

[Enrique]

8. god what a shitty panel

this reminds me of the NAFTA debate. The media clearly took sides on that one, and the "news" people all served as advocates.

[underpants]

10. Well she clearly knows that she wants to use the word "populist"

but she doesn't know what that means either

She DOES know that populists and populism were the revolutionary arrow that struck directly at the heart of the last guilded age
and we are in a guilded age

[mentalslavery]

11. But what if one person brings revenue in to the business

and then another person creates loses from poor investment decisions. Shouldn't that person be rewarded for there achievements. Ha! What a simplistic argument. By that logic, the one who created loses should pay them back, right! Rewarded if you will, bailed out if you fail. Gotta love the corporate incentive structure.