The Great Bank Fail Out

February 25, 2009 11:47 AM

Remember the stink a few weeks back that caused Wells Fargo to cancel their Las Vegas party? Well, it appears that last week Northern Trust, a bank that received $1.6 billion dollars in federal money, held a series of lavish parties in L.A., complete with performances by Sheryl Crow, Earth-Wind-and-Fire, and others (more here and here).

And as to the ongoing bank "bailout" itself, Paul Krugman made some excellent points on his blog yesterday (his piece begins I’m trying to be sympathetic to the various plans, or rumors of plans, for bank aid; but I keep not being able to understand either what the plans are, or why they’re supposed to work. And I don’t think it’s me.) Worth a read.

Meanwhile retail sales remain grim. But if you live in L.A., the Dodgers may be hiring.

posted by ornate insect (96 comments total)

If I received an undeserved $1.6 billion, I'd feel like celebrating too.
posted by Joe Beese at 11:50 AM on February 25

Torches and pitchforks, anyone?
posted by waxboy at 11:52 AM on February 25

I already have a pitchfork. I always keep it on hand for moments like this. But a torch would be appreciated, yes.
posted by Astro Zombie at 11:54 AM on February 25

I'M ENRAGED and exhausted....
posted by Mr. Anthropomorphism at 11:54 AM on February 25 [2 favorites]

Seriously, I think that could be their strategy: just keep making so many bad decisions that we physically can't even be bothered to complain anymore.

And on that day, my friends, they will really party!
posted by Mr. Anthropomorphism at 11:56 AM on February 25 [1 favorite]

Damn it feels good to be a banksta.
posted by crapmatic at 11:58 AM on February 25 [31 favorites]

If nothing else, I hope this crisis destroys the "rugged individualist" theory of American life. Once and for all, we now know for a certainty that the welfare of other people and businesses affects all of us. If millions can't pay their mortgages, we all suffer. If millions go uneducated or uninsured, we will all have problems.
posted by DU at 11:59 AM on February 25 [14 favorites]

Seriouly...I'd like to hear a comment from ANYBODY who thinks this is unexpected. It was appalling and surprising months ago, now its just "yeah...i know".

Fucking rich people.
posted by hal_c_on at 12:00 PM on February 25

Surely this....
posted by eriko at 12:02 PM on February 25

I'd hate to be a stick in the mud, but don't parties like this stimulate the economy? People such as cooks, waiters, bartenders, cleaning crew, etc. need to be paid to put on these parties, right? Yeah, I guess Sheryl Crow and Earth-Wind-and-Fire don't need the money, but I think the majority of the money must have gone to employing people who need the money.
posted by Simon Barclay at 12:06 PM on February 25 [1 favorite]

If nothing else, I hope this crisis destroys the "rugged individualist" theory of American life.

And with it, the complaints about "people on welfare". Social programs constitute such a tiny fraction of national budget. It is corporations that consume a lion's share of it, and then feel entitled to throw lavish parties or pay their executives exorbitant salaries or shut down and move to Mexico.
posted by orange swan at 12:07 PM on February 25 [5 favorites]

*sings* 'cause all I wanna do ... is spend your cash ... let's get Earth Wind & Fi-ire ... to play our Bailout Bash!

I think this might just well bolster the "rugged individualist" theory of American life, if we're all taking up patching our jeans again ourselves, planting little victory gardens, and perhaps even going so far as to learn how to make our own coffee.

If nothing else, I hope this crisis destroys the "if we just give the corporations everything they ask for, some of the magic money they make might fall on us, and anyone who says otherwise is a dirty Communiss!" theory of American life.

*narrows eyes* You ain't a Communiss, are ya, boy?
posted by adipocere at 12:08 PM on February 25 [3 favorites]

This is just the tip of the iceberg for where money was spent by Northern Trust over the past week, and doesn't even mention a gold tournament they hosted at a cost of $6.3 million.

I can only assume that people who take 1.6 billion and immediately start throwing million dollar parties have no real concept of what that kind of money means to the taxpayers who are paying for it.

They should learn. They should have to spend some time making the same kinds of money as the vast majority of people so that they might begin to understand that 6.3 million dollars isn't a party, it's more money than the average person will ever see in their entire life. Hell, the interest alone on that would mean that most of us would never have to work again and still be able to live in a better lifestyle that we are used to.

Torches and pitchforks might make a good finale, but how about we just start simple and take the money we gave them back: "Whoops, sorry. We hoped you might be responsible, but you failed that test. Enjoy unemployment."
posted by quin at 12:09 PM on February 25 [4 favorites]

You'd think Sheryl Crow, with all her political grandstanding and eco-preaching, would have enough moral fiber to decline their offers. Apparently, soaking up the sun isn't enough for her -- she wants bail-out money too.
posted by grounded at 12:09 PM on February 25 [17 favorites]

If I act like an immoral asshole with no social conscience, my wife will probably throw me out of the house and I'll get cold and hungry pretty fast.

If a bank owner acts like an immoral asshole with no social conscience, hundreds of thousands of people get cold and hungry pretty fast. And his three mistresses gather around him in front of the fireplace as he knocks the neck off another bottle of Dom, all on the taxpayer's tab.

This is clearly the next level of social inequality that needs to be tackled.
posted by seanmpuckett at 12:12 PM on February 25

But we didn't spend "that" money on the party, we used "this" money.
That was the defense of it I heard on the radio this morning.
Really, these jokers don't have a clue.
Don't have parties. It's not a time for parties.
posted by 2sheets at 12:12 PM on February 25

Thank you for giving me another reason to hate Sheryl Crow.

My friend the communist
Holds meetings in his rv
I can't afford his gas
So I'm stuck here watching tv

I don't have digital
I don't have diddly squat
Its not having what you want
Its wanting what you've got


She probably sang this at a party for a freaking BANK.
posted by Dr-Baa at 12:12 PM on February 25 [2 favorites]

FWIW, a party like this was almost certainly planned and budgeted for before the bailout money, but please note that I am only saying this to pre-empt any apologist who point that fact out--and not because I think NT should have had the party (they could have cancelled it, even if it meant eating the deposit costs and guarantees invested to the hotels and performers. The PR people at NT should have known how bad this would look. But be prepared for the "but it was already planned" excuse.
posted by ornate insect at 12:13 PM on February 25

Whats the bizarro world equivalent of this? In a month or so Im getting an extra 20 or so dollars per month in the form of a payroll tax break. Will I be admonished by wealthy bankers if I see a movie or everytime I buy a chocolate bar?

People such as cooks, waiters, bartenders, cleaning crew, etc. need to be paid to put on these parties, right?

That's an interesting question. I guess the elephant in the room here is that only the federal government can dictate what is stimulating to the economy and what isnt. That's not a good precedent, but spending it on frivolous parties isnt either. My understanding is that a lot of this money came with no strings attached. Perhaps we should be complaining to Obama's government about handing out money in such a fashion. I feel that all of this ties in with lack of controls and not "OMG OLD BOYS NETWORK IS MILKING US POOR TAXPAYERS AGAIN!!!!!! SMASH IN A STARBUCKS WINDOW!!!!!!" Perhaps this is why the n-word has been coming up so often lately. Its easier to control them if we just nationalize them.
posted by damn dirty ape at 12:13 PM on February 25

S.B.,

By your logic, we could solve our current economic problems if we just gave everyone $1M. That is, your logic being that as long as money is being spent on things that stimulate the economy its money well spent. Being serious now, the point is these banks are receiving a bailout because, like it or not and even in light of the atrocious business decisions banks have made, liquidity in the financial markets is a necessary component of a functioning economy. The fact that the banks are taking this money and using it for other purposes is in bad faith and asks us, the taxpayers, to consider why we don't just let these institutions fail and spend the stimulus monies in other critical areas. The actions by Northern Trust undermine the legitimacy of TARP.
posted by gagglezoomer at 12:17 PM on February 25 [2 favorites]

What we want to do is clean up the bank’s balance sheet, so that it no longer has to be a ward of the state. When the FDIC confronts a bank like this, it seizes the thing, cleans out the stockholders, pays off some of the debt, and re-privatizes.

Well, that may be what sensible people want to do, but that isn't what a large number of people want to do. A lot of the talk about government involvement in banks is coming from the viewpoint that banks should have been nationalized or at least under government control all along. In other words, many of these people see no reason to re-privatize the banks. There's a trend to socialization and collectivisim. During the hearings today, one Democratic congressman prefaced his question to the fed chairman with a very direct and clear statement to the effect that he (the congressman) was certainly no great support of the free market.

I'm sure the irony of making that statement to the Fed Chairman is lost on him (because he is a fool). The Federal Reserve, the institution everyone is looking to to fix the problem, is private, owned by its shareholder (private banks).

If nothing else, I hope this crisis destroys the "rugged individualist" theory of American life. Once and for all, we now know for a certainty that the welfare of other people and businesses affects all of us. If millions can't pay their mortgages, we all suffer. If millions go uneducated or uninsured, we will all have problems.
posted by DU at 2:59 PM on February 25

I certainly don't know that for a certainty, and furthermore I think this crisis teaches the lesson that only rugged individualists survive and thrive. This statement about all of us suffering together is only true if you've tied yourself to the trends and to the masses prior to the crisis. If you were doing the opposite of what everyone else was doing over the last eight years, i.e. if you were saving instead of spending, paying down your existing mortgage instead of trading up to a bigger house, spending your money on education instead of new crap, then what is unfolding now is a bonanza. Everything is on sale, everything is dirt cheap, and you have the upper hand in every negotiation.

I hate to break it to everyone, but we aren't all in this together. We never have been, and we never will be.
posted by Pastabagel at 12:18 PM on February 25 [8 favorites]

I'm so tired.
posted by Maisie Jay at 12:18 PM on February 25 [2 favorites]

Also, one of the entertainment acts was Foghat. That alone should be cause for distress.
posted by ornate insect at 12:18 PM on February 25

The problems I have with the tired 'it was already planned' excuse are numerous, but I'll try to slim it down to one. If you are going out of business you don't plan a party. At least not a party on the scale being described. That they felt it appropriate to spend this kind of money - while they were going through a financial crisis, is reckless and stupid.
posted by elwoodwiles at 12:20 PM on February 25

ive lost track of the number of injustices out there..
posted by ghost32 at 12:22 PM on February 25

Foghat plays for beer and a chance to score with the chicks. They always have, dude, and they are the least of your financial worries. Foghat ever brings their own bottle of Jack, because they party like that.
posted by Astro Zombie at 12:22 PM on February 25 [2 favorites]

I am shaking with anger.
posted by chugg at 12:23 PM on February 25

Surely the CEO will offer to reimburse the company for the cost of the party out his own pocket and promise the taxpayers that nothing like this will ever happen again.
posted by bshort at 12:23 PM on February 25 [1 favorite]

Labor Department says layoffs likely to worsen in coming months
posted by ornate insect at 12:23 PM on February 25

if you were saving instead of spending, paying down your existing mortgage instead of trading up to a bigger house, spending your money on education instead of new crap, then what is unfolding now is a bonanza.

Ive been doing that and my job is in jeopardy. The point here is that we are all tied to our employer or neighbor or whomever. Oh, do you mean people who are their own employers? How many of us are that? Very few. Economies only exist because business owners can get labor. That labor is subject to the whims of the business owners. If I lose my job because of my boss's bad ideas, then that's not my boss's problem, its my problem!

Economies are interconnected in non-obvious ways. I think thats dawning on some people and the idea of socializing banks is suddenly more appealing the same way privatizing social security is unappealing. Some things should be insulated from the whims of the market and MBAs.
posted by damn dirty ape at 12:26 PM on February 25 [3 favorites]

Surely nothing will happen, and we will all go back to nervously scanning the news and hoping we won't lose our jobs (assuming we haven't already).
posted by you just lost the game at 12:26 PM on February 25

As long as I remain unemployed I will troll MetaFilter. Now: we wait.
posted by Curry at 12:26 PM on February 25

hey, can you guess what the google ad is at the bottom of this thread?

even metafilter is getting under the TARP.
posted by geos at 12:26 PM on February 25

"In previous years, top Wells Fargo loan officers were treated to performances by Cher, Jay Leno and Huey Lewis. One year, the company provided fortune tellers and offered camel rides,"

At least know I know why they charge me $35.00 for every transaction that overdrafts, instead of, you know, stopping my debit card when there isn't money in there.
posted by silkygreenbelly at 12:29 PM on February 25 [7 favorites]

Total stock returns since Jan 2007:

NTRS: +3.47%
SNL Bank Index: -75.49%
S&P 500: -42.83%

I'd say NTRS has done a pretty good job. The Treasury was giving out money for cheap when no one else was, so I can see why they took it. Northern Trust is in the business of serving the very wealthy, so the fact that they have these type of events is unsurprising and probably necessary since their private competitors are using this crisis to snap up clients from beleaguered public firms.

They probably shouldn't have been given TARP money, but at the time Treasury was encouraging both good and bad banks to take it so there wouldn't be a stigma associated with it.
posted by mullacc at 12:29 PM on February 25 [3 favorites]

Sorry, that should be "now I know".

...When is the 3 minute edit window coming?
posted by silkygreenbelly at 12:30 PM on February 25

I'd hate to be a stick in the mud, but don't parties like this stimulate the economy?
I like the way you think. I'm willing to do my part and party my way out of this current crisis.
posted by Sailormom at 12:32 PM on February 25 [2 favorites]

Someone will make the argument that the parties wouldn't exist unless there was an ROI. After all, guests at parties like these are usually clients and business partners.

But ... this can't be justified. Not at this level. Not now. Not when, clearly, there's a massive PR hit to take. Not when you're taking bailout money. Your clients might be hurt that you're canceling the party, but will they really take their business elsewhere when you explain you're doing it to be fiscally responsible? Will they really take their business elsewhere when you explain loudly (you do have PR, right?) exactly why you're eating the deposits and canceling the party?

The villains of the financial catastrophe aren't criminals. They're morons.
posted by Cool Papa Bell at 12:33 PM on February 25

gagglezoomer, good point. I wasn't suggesting it was a good idea, but I think calls for pitchforks and torches should be moderated by understanding the other effects of these parties.

That being said, yeah, these bank execs clearly don't get it.
posted by Simon Barclay at 12:34 PM on February 25

I wonder what kind of money burning went on and what kind parties these people threw before the crisis, when they believed the sky was the limit.
posted by Dragonness at 12:34 PM on February 25

Revolution. Backs. Wall. First.
posted by dersins at 12:36 PM on February 25 [1 favorite]

The villains of the financial catastrophe aren't criminals. They're morons.

Maybe criminal morons or moronic criminals?

Related:
Bank Of America Heiress Blasts Bank Leaders As 'Idiots'
posted by ornate insect at 12:36 PM on February 25

This is exactly the sort of thing that should start the revolution. These fucks let 450 employees go in December, ostensibly because the company couldn't "afford them in these tight times", and then blows 8 mil on parties in a week?

How many times do we have to excuse this kind of behavior before we start throwing these people in jail cells?
posted by Benny Andajetz at 12:40 PM on February 25 [7 favorites]

The big problem with demand and supply side fiscal policy is that they both believe a society can spend itself rich. -me
posted by christhelongtimelurker at 12:40 PM on February 25 [1 favorite]

Simon, I believe the superficial argument for the bank bailouts was that they had been hit so hard by the financial crisis that they were in danger of (at worst) failing and (at best) lending out a lot less money. Either of which would compound the problems firms face. Not as a stimulus package for the the "hookers and blow" sectors. (Which it's not. A stimulus package. For hookers. I mean.)
posted by ~ at 12:41 PM on February 25

I think thats dawning on some people and the idea of socializing banks is suddenly more appealing the same way privatizing social security is unappealing. Some things should be insulated from the whims of the market and MBAs.
posted by damn dirty ape at 3:26 PM on February 25

Okay, you make a good point about jobs. But absolutely no one in authority is suggesting socializing banks on a permanent or even indefinite long-term basis. In fact, there is a tension within the liberal economic community that banks on the edge should be nationalized now, restructured and then re-privatized, but the administration does not even want to do this much. No one is suggesting that banks should be socialized except people who bizarrely think that this crisis somehow proves that capitalism is a failure.

I get the impression the administration sees itself torn between rabid socialists on the left and nihilists on the right both of whom want to see the entire system collapse so they can have the chance to usher in their respective golden ages.
posted by Pastabagel at 12:46 PM on February 25 [1 favorite]

Marx underestimated just how fucking lazy the proletariat really are.
posted by chunking express at 12:52 PM on February 25 [6 favorites]

I get the impression the administration sees itself torn between rabid socialists on the left and nihilists on the right both of whom want to see the entire system collapse so they can have the chance to usher in their respective golden ages.

I don't. I get the impression that when even Paul Krugman and George Will can agree that temporary nationalization (Swedish style) is necessary, then the Obama administration is planning just that. However it won't be called nationalization.
posted by ornate insect at 12:53 PM on February 25

A stimulus package. For hookers.

Oh yeah, this thread just got interesting...
posted by quin at 12:55 PM on February 25

In a month or so Im getting an extra 20 or so dollars per month in the form of a payroll tax break. Will I be admonished by wealthy bankers if I see a movie or everytime I buy a chocolate bar?

If you told the wealthy banker you were too broke to pay your mortgage and needed an emergency bailout of $20 a month or else you'd default, then went out to a movie and bought pop corn and soda for everyone in the theater, came back a month later and said you needed a bigger than expected bailout because the $20 turned out not to be enough, then probably someone ought to admonish you for going out to the movies.

(But then, in that scenario, the wealthy banker would just foreclose on your house in the first place without ever offering you the extra $20 a month.)

I hate to break it to everyone, but we aren't all in this together. We never have been, and we never will be.

Pastabagel: I agree that you're acurately characterizing a certain common delusional perspective that pervades American culture, but surely you recognize and would acknowledge that it's only a prideful delusion? It's more accurate to say that some of us don't realize we're all in it together, never have realized it, and never will. That's why we'll always need prisons.

But there's not a goddamn one of the so-called rugged individualists out there who hasn't relied in thousands of ways, big and small, on the communities and the society they live in from the time of their birth. All their lives they've depended on access to roads, bridges and other infrastructure that would never have existed except as public works; they've taken for granted the existence of a workforce educated in a public school system which, imperfect as it may be, still contributes to literacy rates that are among the highest in the world; they've leveraged research innovations like the internet that were originally developed in the public interest to prop up their business models; they've relied on local police and fire rescue services to protect their lives and property rights; hell, at the most basic level, they rely on the use of languages and other systems of thought and communication which are inherited products of the cultures into which they are born.

These types aren't the self-made heroes they like to imagine, no matter how absolutely they claim to reject their share of moral responsibility for the public good. Even if they flatly reject their obligations as members of a society, they remain no less dependent on the society around them for their welfare. They just become a kind of social parasite. And the more successful among these parasites sometimes become like ticks that have grown so fat and comfortable they can't see the inherent dangers to themselves in bleeding their host dry.
posted by saulgoodman at 1:04 PM on February 25 [21 favorites]

Government Offers Details of Bank Stress Test
posted by ornate insect at 1:16 PM on February 25

Any desperate bastard want to rob the pants off one of these people once they walk somewhere in public?
posted by kldickson at 1:24 PM on February 25

Also, maybe the government should find a way to bypass the assholes who irresponsibly spend, spend, spend .
posted by kldickson at 1:26 PM on February 25

Good move.

"The bank recently [December 2008] laid off almost 450 workers.

Northern Trust issued a statement saying that the event is an important part of its marketing and was not paid for using government money."

And I love the fact that they gave out Tiffany gift-bags, rumored to call them "stimulus packages." Bend over America, I've got a "stimulus package" for each-and-every-one-of you!
posted by ericb at 1:27 PM on February 25 [3 favorites]

The flip side to benefiting from the interconnectedness saulgoodman mentions above is getting crushed by it. For example, I live in a fairly recently re-gentrified area. I don't know exactly how many it would take, but I'm fairly sure if X number of houses were foreclosed upon here, the entire neighborhood would revert straight back to its hellish 1970s and 80s status taking everyone's biggest investment with it.

So the you can be as rugged and individual as you want. Just remember that you might wind up living debt free and surrounded by cheaply bought big-ticket items...in a newly minted ghetto.
posted by digitalprimate at 1:35 PM on February 25

I need another reason to dislike Sheryl Crow like I need a hole in my head.
posted by punkfloyd at 1:35 PM on February 25 [1 favorite]

I just want to thank Sheryl Crow, Chicago, and Earth, Wind, & Fire for holding a charity event to help raise money and awareness for our faltering banking system. It was big of them to do this and they deserve all the credit they can get.
posted by cjorgensen at 1:38 PM on February 25 [2 favorites]

I guess the elephant in the room here is that only the federal government can dictate what is stimulating to the economy and what isnt. That's not a good precedent, but spending it on frivolous parties isnt either. My understanding is that a lot of this money came with no strings attached.

Hopefully, things will change. And fast.

Northern Trust Sponsorship Prompts Legislative Action

"[Senator John Kerry (M)] [will] introduce a bill to end the 'extravagant spending practices of U.S. banks' that receive taxpayer bailouts, and other lawmakers to demand the money back.

'I'm sick and tired of picking up the newspaper and reading about another idiotic abuse of taxpayer money, while our country is on the brink,' said ...Kerry...in a statement released to Reuters.

Kerry plans to introduce legislation this week targeting banks that got taxpayer assistance under the government's $700 billion Troubled Asset Relief Program (TARP).

House Financial Services Committee Chairman Barney Frank, along with 17 Democrats on the committee, sent a letter Tuesday to Northern Trust's CEO asking that the bank repay what it spent on the entertainment during the golf tournament, the Chicago Tribune reported.

'This behavior demonstrates extraordinary levels of irresponsibility and arrogance,' the letter said. 'We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events.'"

posted by ericb at 1:39 PM on February 25

In previous years, top Wells Fargo loan officers were treated to performances by Cher, Jay Leno and Huey Lewis.

This boils my blood. Hanging is too good for these robber barons. They should be hogtied and forced to watch performances from Cher, Jay Leno and Huey Lewis.

wait
posted by porn in the woods at 1:43 PM on February 25 [1 favorite]

You ever get the feeling that the only way the bigwigs in the financial industry are ever going to get with the program is if we started painting big red bullseyes on the back of their heads?
posted by Thorzdad at 1:49 PM on February 25

ghost32 get together with salvia. He can help you out.
posted by cjorgensen at 1:52 PM on February 25

I looked for a link to the Wells Fargo ad in the NYT's a few weeks back to no avail, I wanted to post it here becuase it was one of the most beautiful examples of corporate double speak I'd ever seen. It was completely bizarre, they basically spent however much a full page ad in the Sunday paper is worth to tell us they wouldn't be frivolously spending money, regardless of how spending that money would have multiplier effect on their revenues, and was good for the economy in general and cured kittens with AIDS.
posted by Keith Talent at 2:00 PM on February 25

I've said this before and I will say it again: sorry, but you people don't understand how these things are planned. Events like this are planned 6-12 months out. Your tax dollars almost certainly weren't paying for this, as large chunks of the payments come months and months before the actual event.

I know it's great to bitch and moan about the corporate fatcats, and yes the reality is people at that level should have been able to see which way the wind was blowing a year ago and scaled down. However, internal events like this are often considered benefits by the employees, and one of the first rules of employee retention is that you can't downgrade benefits and still command loyalty. Perhaps if it's framed as a 'doing our part for the economy' thing, it can work, and arguably they should have done that. Except that hotel room contracts come with severe attrition schedules, meaning depending on when you cancel you are still on the hook for up to 100% of the room nights you have booked--sometimes even if the property is able to rebook the rooms--as well as the forecast revenue for food & beverage, which for something of this magnitude would be astrofuckingnomical.
posted by dirtynumbangelboy at 2:04 PM on February 25

They probably shouldn't have been given TARP money, but at the time Treasury was encouraging both good and bad banks to take it so there wouldn't be a stigma associated with it.

Treasury wasn't just "encouraging" good banks to take TARP money; it was basically *forcing* good banks to take TARP money. A friend whose wife works at a bank that never got its hands dirty with stupid subprime/derivative/whatever bullshit says that the "encouragement" was very much of the "you better not say no" variety.

That doesn't excuse the ostentatious partying idiocy at all, but it's worth pointing out that "good" banks did not really have much of a choice about whether to take TARP money or not.
posted by mediareport at 2:05 PM on February 25

I don't know, this feels like outrage/kneejerkfilter to me. From all reports they didn't ask for the TARP money, and it's not like they took the TARP money and dumped it into their marketing line item. They undoubtedly had lined up this event a year or more in advance, and the people they invited were people they wanted to keep or get more business from. How is it any different than spending $8m on TV commercials or direct mail?

It's easy to get your panties in a knot because rich people are rich and groups who want their money cater to them with parties or events, but it's just a fact. If it weren't good for business then people wouldn't have been doing it for the last, oh, ten thousand years.

Changing your plans once you get TARP money? Getting a fat check from Uncle Sam and cutting the executives bonus checks? Sure, that's f'ed up and should be dealt with, but there's a difference between that and doing business.

And as far as Sheryl Crow goes, how do you think celebrities can afford to be celebrities? If somebody offered you $200,000 to juggle for an hour on stage at an event, would you turn them down?
posted by jeffkramer at 2:08 PM on February 25

jeffkramer--since when did bankers need to be entertained, other than modest holiday parties, anyway? There was a time, long since past, when banks were expected to project some degree of modesty.

Also, and more to the point, did you miss the fact that they laid off 450 employees back in December, ostensibly to cut costs? Even if no direct causal link can be made between the layoffs and the parties last week, or between TARP money and the parties last week, the fact remains that in this financial climate (a financial climate that started to get really bad 6 or 12 months ago, precisely when they may have been planning these parties), it is extremely revealing to see the culture of spending and entitlement that bankers still seem to take for granted.

Even if one is not outraged, one should at least be made a little more aware of how out-of-touch the banking industry has become.
posted by ornate insect at 2:22 PM on February 25

it's worth pointing out that "good" banks did not really have much of a choice about whether to take TARP money or not.

Actually, let me clarify that - they could have turned it down, and some smaller banks did, but most of the relatively untroubled big banks chose not to put themselves at an obvious disadvantage by watching their competitors get bad behavior rewarded. I have a harder time blaming those companies for continuing business parties as usual, unless it's clear TARP money was involved. Save the outrage for the assholes who gave parties after their banks were rescued from certain oblivion.
posted by mediareport at 2:23 PM on February 25

Events like this are planned 6-12 months out.

Sounds like we'll be hearing about more such lavish parties for the next six months to a year.
posted by Dragonness at 2:24 PM on February 25

Ugh, I missed the part about the layoffs. Ok, back to our regularly scheduled outrage it is.
posted by mediareport at 2:24 PM on February 25

I'd hate to be a stick in the mud, but don't parties like this stimulate the economy? People such as cooks, waiters, bartenders, cleaning crew, etc. need to be paid to put on these parties, right? Yeah, I guess Sheryl Crow and Earth-Wind-and-Fire don't need the money, but I think the majority of the money must have gone to employing people who need the money.

My wife, who works at a Four Seasons in Southern California, had her hours cut when AIG canceled a week long, $500,000 dollar business conference scheduled the first half of December 2008.

Since then, her pay has dipped to as low as 40% of normal, as business after business cancels affairs that have been scheduled as much as a year in advance.
posted by Xoebe at 2:36 PM on February 25 [1 favorite]

If anyone here catches wind of another one of these parties coming up, please post it here.
I would just LOVE to attend.


I'll check back later. Heading down to the rifle range to get in some practice now.
posted by orme at 2:42 PM on February 25

I always knew Sheryl Crow was really a giant space-leech in disguise.
posted by turgid dahlia at 2:43 PM on February 25

I'm just shocked that ornate insect inexplicably hyphenated Earth, Wind and Fire.
posted by flapjax at midnite at 2:46 PM on February 25

I was afraid people might think they were three different groups.
posted by ornate insect at 2:49 PM on February 25

Throwing good parties is the only redeeming attribute these people have.
posted by StickyCarpet at 2:59 PM on February 25

How many times do we have to excuse this kind of behavior before we start throwing these people in jail cells?

How many seasons of American Idol left before it gets cancelled?
posted by Blazecock Pileon at 3:04 PM on February 25

There was a time, long since past, when banks were expected to project some degree of modesty.

Wall Street's Allure May Be Gone for Good

"Wall Street's fat cats are in the public's doghouse, and it could be a long time -- if ever -- before the eye-popping paychecks and glamour of the last two decades return.

Americans have long tolerated Wall Street's big bonuses, bigger egos and outsized influence because the firms and their executives at least made lots of money. Now, those days are over.

Huge losses, a multitrillion-dollar government bailout and those never-ending bonuses have turned the legendary 'masters of the universe' into villains."

posted by ericb at 3:24 PM on February 25

They should have booked 50 Cent amirite?
posted by ob at 3:31 PM on February 25 [1 favorite]

This wasn't a big employee party, as I read it. It was a marketing event that employees attended (some of them have to, somebody has to schmooze the big clients) and some others may have been rewarded with it (incentives still make people work harder).

Northern Trust has a page about it, and I don't see that they have any reason to lie.

Companies let people go all the time, and in a downturn you have to tighten belts. A financial firm cutting 4% of their workforce right now seems logical to me. It's unpleasant and it sucks for the people who get cut, but this isn't China or the USSR. You don't keep people on the payroll when doing so will risk your profitability just so people can have jobs.

It's easy to be indignant and demand that businesses conform to some image of moral behavior that we have, but the fact of the matter is that if they're making money and if we don't own them, they should be able to conduct their own business without us waggling our fingers at them.

Demanding our toys back because they acted like they always have reeks of mobthink and pandering to the TMZ watching, MetaFilter trolling populous. The Bush administration didn't say 'here are the guidelines, if you don't follow them we'll take this back'. They probably should have, but they didn't, and the point then was just to get everybody on board. The loans have already been bought, the money is circulating. If you demand it back you're just punishing the good banks that actually put it into the lending pool. The ones who blew it on, say, Merrill Lynch are just going to shrug and say 'don't have it anymore, sorry'.
posted by jeffkramer at 3:43 PM on February 25

There was a time, long since past, when banks were expected to project some degree of modesty.

Just to reiterate, this specific instance is the national equivalent of your town bank sponsoring the country club's golf tournament. Granted, the gifts may be nicer and the band may be more well known, but the bank is also several orders of magnitude larger and their clients are an order of magnitude wealthier than the guy who owns the car dealership or the grocery store.

The greater story about bankers paying themselves huge bonuses while their stock price drops to near zero and they disappear billions in TARP funds is f'ed up and we should have their heads on a pike, but that's not what happened here.
posted by jeffkramer at 3:48 PM on February 25

if they're making money

One of the big problems, apparent to anyone scrutinizing the headlines of the last year or so, is determining if a given company, especially one in banking or financial services, is indeed profitable. Whether it's Bernie Madoff or AIG, the issues of corporate accountability and fiscal transparency were clearly not adequately dealt with on the federal (i.e. regulatory) level during any of the previous financial meltdowns (i.e. Enron, Tyco, Worldcom, the S&L crisis). So to say now of any given bank or company, after everything that's happened, that "if they're making money," everything is OK, conveniently overlooks the fact that the entire grossly under-regulated investment banking industry was itself bleeding money due to runaway speculation and cooked books for years and years. I understand that corporate parties are not the cause of this, but there is a window in a story like this through which to see what is and is not going on.

conform to some image of moral behavior

This is not about moral behavior or tit-for-tat moralizing, it's about recognizing a certain culture of runaway greed. Consider a form of popular sociological self-recognition, as in "crap, we all have to get a better handle on what the hell bankers are doing with the money they are entrusted with." It can be constructive for people to notice things that they might have not noticed before.

The loans have already been bought, the money is circulating.

The problem is precisely where, whether and how it is circulating. We need more transparency and more regulations, and if that means we have to draft very specific laws to ensure banks don't waste federal loan money on frivolous things, then so be it.
posted by ornate insect at 4:01 PM on February 25 [1 favorite]

Our valley was quiet. The day of the taxman had passed. Upon the night, we dug in the fields for roots. A cry from my daughter "Father, I have found a carrot". I smiled. The water we call soup would have some flavor.

From high on the castle the music drifted down to our valley. We heard the revelry and smelled the cooking meats. A feast for the lords and ladies.

The songs and smells didn't anger us as much as their laughter.
posted by Bighappyfunhouse at 4:11 PM on February 25 [3 favorites]

jeffkramer:

Most people, myself included, don't begrudge corporations the right to a profit, or to control their own affairs (as long as they're lawful).

On the other hand, this backlash has been a long time in the making. Ever since Teddy Roosevelt, people who have cared to notice have seen that unchecked corporate behavior is not in the interest of consumers, employees, or the country. We've gone through thirty years of government that has ceded power and privilege back to corporations that was rightfully taken from them in the twenties and thirties.

Most people have lost any viable means to fight back. If a company screws you over, you can't just take your business to the next guy because they belong to the same parent corporation. You can't push too hard over a grievance at work, because Labor doesn't have a seat at the table anymore. If you get caught short you can't refinance your house or declare bankruptcy. You can't do shit without a good credit score, but your credit score may as well be devised and kept by a secret order of Druid priests.

The deck is stacked against the average man these days. And whose fault is that? Mostly Big Business's. They've lived pretty high for three decades. They've gotten the merger approvals, the tax breaks, the favorable labor laws, the golden parachutes... And now the biggest of the big are getting our and our children's money because they screwed the pooch so bad that we have to resort to drastic measures.

So, to some extent, it's payback time. And we all know what paybacks can be.
posted by Benny Andajetz at 4:12 PM on February 25 [5 favorites]

The problem is precisely where, whether and how it is circulating. We need more transparency and more regulations, and if that means we have to draft very specific laws to ensure banks don't waste federal loan money on frivolous things, then so be it.

That's undoubtedly true, but it doesn't mean that their sponsorship of this PGA Tour event and throwing parties for clients and potential clients was somehow wrong.

There are taxpayer screw jobs a plenty out there, especially recently in the banking sector, but focusing on something like this that's not just blurs the focus. At least Northern Trust has said something about what it did with the money. Plenty of other banks either don't know or won't say.
posted by jeffkramer at 4:16 PM on February 25

focusing on something like this

The NT story that provoked the FPP is just one small piece of a larger picture, and that's why the last three links (Krugman, retail, Dodgers) have nothing to do with the NT story. I'm not advocating that the NT story is somehow the beginning and end of understanding what ails our entire financial system. I'm not that daft. But to say it does not merit attention, or merely distracts from the larger problems, is something I would not agree with. In addition to the practice of banking, people have a right to be concerned about the culture of banking right now.
posted by ornate insect at 4:22 PM on February 25

Also, one of the entertainment acts was Foghat.

These fools for the city bankers deserve Foghat. Lots of Foghat. Foghat up the wazoo.
posted by grounded at 4:24 PM on February 25

So, to some extent, it's payback time. And we all know what paybacks can be.

But this incident, what this post about, fundamentally isn't all that bad. They raised some money for charity. They treated some clients and prospects with gifts and entertainment.

I'm as irritated as anyone with how much companies get away with and how they can screw people. Death to corporate personage and all that, but you have to focus on and act at the actual problem, not let yourself get distracted by TMZrage.

The Northern Trust Open raised $1.9 million for charity and even has affirmative action. That's a long way away from a $20 million dollar personal bonus plus golden parachute for a CEO that just liquidated $30 billion in TARP funds.

You'll find events of that nature in probably every large business. Here's a list of the PGA Tour's upcoming events. What do you want to bet that something similar isn't happening for each of the sponsoring companies?
posted by jeffkramer at 4:34 PM on February 25

China executes people who cause great harm to their society.

I think the Chinese may have an important insight into how to best restore the public's confidence. I believe my own confidence in Wall Street would be markedly boosted by a few executions.

Put their heads on pikes on the trading floor and I might even believe the system can be made to work.
posted by five fresh fish at 5:12 PM on February 25 [1 favorite]

Related: The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.
posted by ornate insect at 5:50 PM on February 25 [2 favorites]

This Banker, however, completely rocks. Yay, Leonard Abess, Jr!
posted by five fresh fish at 5:55 PM on February 25 [1 favorite]

I skipped reading this thread, but I wish I was in LA to work these parties. The crisis is heavy on New York businesses and because none of them are having lavish parties I HAVE ONLY WORKED ONE DAY THIS WHOLE MONTH. I am hoping wedding season is good this year. This reminds me that I am going to have to go and drop my resumes around to probably every party company in the city in hopes that one of them will have something going on so I can pay my rent.

I don't think all of the four or so big parties of NYC will make it through the depression, but I'm sure at least one or two will. Maybe some of the companies will merge. According to one account from Studs Terkel's excellent oral history of the depression "Hard Times" there was still entertainment and party jobs to be had. I wish I had the passage on hand but I gave away my copy of the book.

Being a production assistant for these events is wonderful. This is my favorite job that I've had. Some (not all) of these parties involve creating a sort of wonderland. Presumably, no one on this thread (which I haven't read through yet) has ever been to a party like this. To create these worlds gives me great pleasure, and everyone at my company is great to work with. Not only does the job pay pretty well, but there are benefits in the form of ...liberated... party supplies. It is great work to get, but no one is hiring now.

There is a lot of talk of the bands that played, but none of the articles mention what companies designed, catered, lit, rigged, ran the soundboards, supplied and put together the party.

Well, I guess I'll just go out and start looking for another job like the rest of America. Also I will read the thread now. I think I will agree with the people who want redistribution of wealth.
posted by fuq at 5:57 PM on February 25

"If somebody offered you $200,000 to juggle for an hour on stage at an event, would you turn them down?"

As long as they paid me ahead of time, and they couldn't ask for their money back. Because I think they might become violent watching me attempt to juggle for a solid hour.
posted by krinklyfig at 10:41 PM on February 25

"There is a lot of talk of the bands that played, but none of the articles mention what companies designed, catered, lit, rigged, ran the soundboards, supplied and put together the party. "

You know those corrupt government leaders that eat caviar and spends lots and lots of money while their people are starving? If you think a lavish party for some people "stimulates the economy" then you have to buy the idea that the people who steal foreign aid money to buy mansions and buy jets while their country is starving, are geniuses that helping to "build" and "stimulate" the economy, creating "jobs" for waitstaff and housekeepers and Benz washers. And that's ridiculous. The stimulation of the economy has to be done evenly throughout the system. And it's not. After that money is spent, it's gone. What percentage of Americans are benefitting from this? Just the ones who are event planners and lighting artists? What about the enormous number of people who don't have anything to do with the one company put in charge of this? It's not a stimulation of the economy. Sorry, but it's not. That money could have been used in severance packages or extended health benefits for people who lost their jobs.
posted by anniecat at 7:30 AM on February 26 [3 favorites]

Seems like these bankers watched Brewster's Millions and got confused.
posted by bokeh at 7:55 AM on February 26

"If somebody offered you $200,000 to juggle for an hour on stage at an event, would you turn them down?"

That 200K isn't worth nearly as much to Sheryl Crow as it would be to an amateur Metafilter juggler. SHE can afford to turn this job down.

"There is a lot of talk of the bands that played, but none of the articles mention what companies designed, catered, lit, rigged, ran the soundboards, supplied and put together the party. "

Again, these people aren't in the same position as a rich celebrity to be able to dismiss this offer.
posted by orme at 10:01 AM on February 26

i just came in here to say that wells fargo is a bunch of thieving bastards who need to be keelhauled.
posted by msconduct at 10:05 AM on February 26