Goldman, Morgan, JPMorgan Plan $30 Billion Bonuses:Today's Outrage

Goldman Sachs, Morgan Stanley and JPMorgan Chase are expected to pay out $30 billion in bonuses to their rainmakers this year. That money should go to taxpayers, who were the real rainmakers.
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NEW YORK (

TheStreet

) -- The bank bonus debate is being stoked today by a

Bloomberg report

estimating that $30 billion in payouts will be made by

Goldman Sachs

(GS) - Get Report

,

Morgan Stanley

(MS) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

this year.

The reward money will be split among 119,000 employees at the banks, for an average of $250,400 each, which Bloomberg conveniently points out is five times the median household income in the U.S. last year. That's enough to give more than half a million unemployed Americans a decent salary.

Even more irksome to the general populace, whose tax dollars financed the massive banking bailout that kept bankers in business, is that average bonuses are expected to increase as much as 40% this year, according to the compensation consulting firm Options Group, whose analysis Bloomberg cited.

As if it wasn't insult enough to pay bonuses at all given near-death experience of the financial system this year, Goldman, Morgan Stanley and JPMorgan seem to be going out of their way to thumb their noses at everyone who helped them when they were down.

The biggest chunk of bonus money will go to the folks who trade in fixed income securities, which became the biggest game in town when the markets were collapsing and investors scrambled for the relative safety of bonds.

The folks in fixed income didn't have to earn the bonuses because the money came rushing over to them amid all the panic that the banks created with the financial meltdown. Talk about easy money.

Meanwhile, Treasury Secretary Tim

Geithner is begging the banks to start lending again

in order to help the rest of the country get out of the mess that the banks created - and he's not getting any love back.

The big defense of the bonuses is that you have to reward the rainmakers and if you don't then they will go somewhere else and make it rain there. In normal circumstances, that would ring true. In the current environment, it's just plain wrong.

It's wrong because the real rainmakers of the past year have been the American taxpayers.

Taxpayers who were never asked if they wanted to provide trillions of dollars in bailouts and guarantees to keep the banks in business.

Taxpayers who saw their retirement savings and nest eggs shrink away because of the market damage caused by the banking crisis.

Taxpayers who lost their jobs because of the economic fallout of the banking crisis.

Taxpayers who lost their homes because of the mortgage mayhem induced by the banks.

If anyone deserves a bonus this year, it's the taxpayers.

My advice to Goldman, Morgan, JPMorgan and any other bank that thinks it needs to pay bonuses to stay in business is this: A self-imposed, industry-wide, one-year ban on bonuses. Then your rainmakers won't be wooed away by bigger bonuses elsewhere since there won't be any.

And if you want to buy a little goodwill - at let's face it, you bankers could use a little after all this - maybe you can find a way to give a bonus to individual taxpayers as a way of saying thanks.

--Written by Glenn Hall in New York.

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Glenn Hall is the New York-based Editor in Chief of

TheStreet.com

. Previously, he served as deputy editor and chief innovation officer at

The Orange County Register

and as a news manager at

Bloomberg News

in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at

The Journal-Gazette

in Fort Wayne, Ind. His work also has been published in a variety of newspapers including

The Wall Street Journal

,

The New York Times

and

International Herald Tribune

. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.