Banks should continue to pay big bonuses to their star employees because that money will find its way back into the New York economy, says New York Governor David A. Paterson.
“Some people think that if you deny the bonuses, that the money’s coming back to the American taxpayers,” says Paterson, according to the New York Times.
“It’s actually the other way around: If you deny the bonuses, the money stays in the firms. It’s when you pay out the bonuses that you start to get the huge tax collections that New Yorkers see.”
Paterson said New Yorkers should back Wall Street the way that California backs its grape-growing industry or Iowa its corn production.
“We need to stand behind the engine of our economy in New York, and that engine is Wall Street.”
After accepting billions in government bailout money, Wall Street financial institutions are investing again and are paying big bonuses to their bankers, much to the chagrin of many.
Two-thirds of Americans say they have an unfavorable view of financial executives, according to a Bloomberg poll.
Bonuses play a large part of that negative view.
According to the poll, 75 percent of the respondents said that any bank that tapped into the $700 billion TARP rescue program should not pay any bonuses at all.
“The fact that they're even in existence should be bonus enough,” says Cassie Swihart, a 58-year-old retired registered nurse from Warsaw, Indiana, according to BusinessWeek.
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