The outgoing CEO of the Bear Stearns investment firm, which was just bailed out of near bankruptcy with a $30 billion guarantee from the Federal Reserve to enable JP Morgan Chase to purchase the firm at a huge discount, announced today that the firm had performed so poorly that it was returning all government subsidies that it had received, including $37 million in tax breaks and other incentives given by the City in 1991 and the $75 million benefits package also given to them by the City in 1997.

CEO James Cayne, who is stepping down, said, “We didn’t earn or deserve such corporate welfare, so we’re giving it all back. At a time when one in five of the city’s children live in homes without enough food, our company can’t, in good conscience, keep taxpayer support that could better be used to fight problems such as hunger. Given that low-income moms can’t easily obtain welfare anymore, neither should rich corporations, or even corporations like ours, which used to be rich.”

Reported The New York Times on January 8, 2008, Cayne “often left for weeks at a time to attend bridge tournaments and would take the occasional Friday off during the summer, in the midst of the subprime crisis, for rounds of golf near his second home in New Jersey.” In response, Cayne, who earned $40 million in cash between 2004 and 2006, also announced that he was returning all his salary and compensation to the company and directing that that money be spent instead on increasing the salaries of the people who staff the corporate cafeteria, serve as security guards, and clean the offices at night at Bear Stearns. Continued Cayne, “Since the only reason I was able to justify such compensation was that I was supposedly earning my company and its shareholders tons of money, now that its clear I drove the company in the ground, I don’t deserve a red cent. Many of our lowest paid workers don’t earn enough to fully feed their families, so I’m sure they could use my bloated pay package more than I ever could. Let’s face it – they work far harder than I ever did.”


In other news:

• A working class neighborhood of single homeowners in an outer borough pleaded for a homeless shelter to be located there, with residents saying “please place this in our backyard.”
• Advocates charged that the media focuses too much on poverty issues, calling for more news coverage of the rich, famous, and privileged.
• Despite soaring food costs, increasing poverty, spiking unemployment, record levels at homeless shelters, and funding cuts to food pantries and soup kitchens, advocates refrained from blaming elected officials for the worsening conditions. Said Joel Berg, executive director of the New York City Coalition Against Hunger, “It just wouldn’t be fair to blame those in charge.”




###