Just last year the government claimed bailouts of major banks like CitiGroup were necessary to prevent economic collapse. But now that banks are turning a profit NBC is returning to attacks on pay.
A June 24 segment of “Today” attacked CitiGroup’s “internal discussions” to raise salaries (by 50 percent in some cases) and other major banks with footage from the 1987 movie “Wall Street,” AIG protest footage and an unemployed Michigan woman.
Meredith Vieira began by stoking class envy saying the story “might make some people hot under the collar.” Citigroup “wants to move away from paying big bonuses by instead giving nearly 300,000 workers large pay increases and it is not alone,” Vieira said.
CNBC’s Melissa Lee took up the narrative saying, “While many Americans remain out of work and everyone’s 401(k) plans have taken big hits, some banks that have gotten TARP money are again profitable and now they're spreading that wealth to their employees. After being bailed out by taxpayer money last year, the biggest banks on Wall Street seem to be back in business.”
Lee told viewers that CitiGroup has yet to pay back it’s share of the TARP money. The reporter also mentioned the profitability of Goldman Sachs, JPMorgan Chase and Morgan Stanley and noted that those three companies had repaid TARP funds. She didn’t mention the administration’s initial unwillingness to accept those repayments
Lee mentioned CitiGroup’s perspective on moving from bonuses to salary increases saying, “The company says it is an important part of being able to attract the best talent.” But then went to video of the infamous character Gordon Gekko in 1987’s “Wall Street,” as Lee said “What some see as a glimpse of Wall Street’s past – others say that after the historic downturn, greed is no longer good.”
An out of work administrative assistant from Detroit, Martha Schwartz, also criticized banks in Lee’s report saying, “I’m really hoping that these guys will take a look at the little people and realize that, you know we’re really hurting here.”
Schwartz’ comments portrayed Wall Street and Main Street as at odds with one another. “We're trying to survive just like everybody else is and you've got the big guys out there eating steaks and, you know, living high off the hog on these bonuses while us little guys are eating peanut butter and jelly and dry cereal,” Schwartz said.
That was a characterization the network media, including NBC, have used in the past. In 2007, “Nightly News” anchor Brian Williams treated good news for Wall Street as not necessarily good for “Main Street.” CNBC’s Vera Gibbons also complained about Wall Street bonuses on “Today,” in 2007.
Lee did include Jeffrey Hart, an analyst with Sandler O’Neill & Partners, who defended the banks by explaining, “The companies need to pay for performance.” But his brief comment was outweighed by the rest of the segment which also included AIG protest footage and an old clip of White House economic adviser Larry Summers saying that “every legal step possible to limit those bonuses is being taken.”
Following Lee’s report, CNBC’s “Mad Money” anchor Jim Cramer attacked CitiGroup saying, “Where is Treasury. The U.S. Treasury should be in the room. There should be a package that’s negotiated with Tim Geithner.”
Only Vieira asked if it was possible that these salary increases could be good news for everyone. “Jim, could there be a silver lining in this? Could you look at this and say, look instead of saying it’s outrageous, how about looking at it the other way, that this means the economy is getting better? Or is it only getting better for the fat cats,” Vieira asked.”
Cramer replied that “I think it is getting better for the bankers because they’re paying you nothing on the money you keep in the bank and they’re lending out at very high rates.”
The media have long complained about “staggering” salaries and profits of Wall Street as well as other businesses.