Come, Shoot the Messengers!
So some dozens of men and women, many of them relatively young, graduates of our best business schools, stars in the business firmament of the giant financial institution they worked for, which giant institution was now receiving billions of bailout taxpayer dollars, accepted large bonuses under the terms of the contracts they were offered by the leaders of said giant institution in their exquisitely furnished offices in the world class temples of grandeur they built around the world as monuments to themselves and their success, which success delighted the peoples' elected representatives who were dazzled by their wealth and fame and success and the political dollars dripping from their till, to the point where where they neither saw nor smelled anything wrong in the institution's business practices over the years, and so in a sense officiated over the impending doom that was to overwhelm the economy of which they were the ostensible custodians.
Like raising a thumb to block out the sun, let's take back some 70 odd bonuses and fail on all sides to see the systemic disease that got us here: short-term thinking; the lunatic need for a profit statement this quarter considerably larger than the last, at the expense of every other value.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
Profit definition - a positive gain after extracting all expenses, so smart folk made a profit because the accounts showed a gain after all the expenses were taken out and so they were awarded bonuses, yippee! By all means give people their bonuses and large pensions but change the rule so that they have to spend it all within 30 days in the country where it was earned on non-luxury items or they lose it or recalculate the accounts to show the losses underwritten by Mr and Mrs America and then see if there is a bonus to be paid.
The Bonus tax is just that on Bonus over a certain amount based on money provide by the Tax payers...S
Do you understand that profit IS the Motive for everything in our current system? It's not the amount of resources used or the most efficient and equitable use of those resources, it's money, the bottom line. You can make a profit or you can be homeless and starving, that's how we've been doing it. We can change it, but realize that, thus far, that's the system we've been using--monetary profit. Their behavior is rational and understood given the "rules of the game" so to speak.
Your last sentence says it all.
For too many years, since the Eisenhower administration where the highest income earners were taxed at 90%, we've had the rules of the game increasingly and consistently be adjusted to promote, even create, fiasco we have now.
There's nothing rational about the "profit at all costs" motive. It's a warped way of thinking.
The business in question (what we're "shooting" them for by letting them be paid only a kings ransom instead of that of an entire imperial court) was to issue insurance policies on mortgage pools, with no assets available to pay claims. They weren't using arcane financial instruments to write virtual jeremiads against the short-term outlook of Wall Street. Just what would have been called "garden-variety fraud" if it had been done on a smaller scale.
It's folly to raise a thumb to block out the sun?
Is it better to curse the darkness rather than light a single candle?
The flawed incentive system in this "industry" is at the very heart of the recklessness and risks that caused the mess.
Unless I am mistaken, the author's entire point is the same as yours. But put differently:
It's folly to protect yourself from sunburn with the shade from your thumb.
It's folly to light a stadium with a candle:
Being satisfied with drawing back the bonuses - or even focusing on them as more significant than a single grain on a beach of corruption, is folly.
"...and fail on all sides to see the systemic disease that got us here: short-term thinking; the lunatic need for a profit statement this quarter considerably larger than the last, at the expense of every other value."
It's chicken or egg. Did the system foster the greed, or did greed completely corrupt the system? It's self-feeding cycle - a dragon swallowing its tail.
Deeming the focus on the bonuses as absurd in light of the larger issues is to make the perfect the enemy of the good.
The compensation mechanisms in finance are precisely what fueled this debacle. "Greed" might indeed be an intractable human flaw, but the formal rules and regulations of business don't need to be written in such a way as to exacerbate that weakness.
To keep piling on the metaphor, attacking these bonuses might be a case of shutting the barn door after the fact, but the attention this is bringing to the rewards system as it has stood in finance is a good thing, and if it brings about permanent change, than let's keep talking about the bonuses. Or do you think everyone's already learned their lesson?
I dont believe Obama realizes that the so called centerist and republicans are the ones that have been in charge for 30 years now..If he really does want change it wont come from them..
This is correct in that we must focus on the big systemic picture and the long term. It should be obvious that the opportunity to make large sums of money has not improved the economy and strategic position of the United States. What is needed is a set of parameters that direct economic activity is positive directions. People on Wall Street moving money just to be able to take large fees from each move is not useful. It is the opposite of the idea that the market directs capital where it is best used since it is only directing it for the profit of the intermediaries.
We need a long term plan to rejuvenate U.S. manufacturing and technology. This must include eliminating the trade deficit and drastically cutting foreign borrowing. Throw out the old idea that we are on top, folks. Time to look abroad for best practices in manufacturing, transit, whatever, and modify or improve as needed. And are MBAs really all that great? Have they and the business schools caused some or this problem?
And as for national security, it's the economy, stupid. Rich Country, Strong Army.
Thank you, Mr. Lear! The whole financial system is corruption incarnate. Suits getting rich running scams that produce nothing but ways to hurt the meek and enrich themselves.
Down with them all. This is not banking, this is genocide.
This nothing new Norman. The rich have always excelled at being the haves in a whole dying of hunger and disease. Money often not earned by labor. How much is enough? These buildings built at our expense truly, tax deductible, salary the same, that it itself was a warning, no regulation as well.
But to do this to mankind on such a scale is beyond the pale, for all of mankind suffers. What did they expect? That we would remain powerless. This president has the capacity to learn, but it was given to him ruined beyond anyone's understanding as to the way out. The big guys will lose their elite positions and their riches before this is over. The word socialist now has become the only way. How could we go back to the way of destruction in this age of communication and knowing?
I seek work at 66 in community corrections and now Washington is reducing or eliminating supervision for those at lowest risk, yet they may have fines that will not be paid and at a time when lawlessness becomes rampant. 190 officers lost. and so it goes.
Let's just cut the crap: The Administration saying it didn't know about these AIG bonuses is pure BS. Obama was first in his class at Harvard Law School and this isn't the first corporate bailout to be followed by corporate execs awarding themselves lavish bonuses.
Ron Wyden said he "introduced a provision that would have forced bailout recipients to cap their bonuses at $100,000. Any amount paid above that would have been taxed at 35 percent." These are the same corporate heads who caused the conditions for which they are now asking for a government bailout, and Wyden wants to reward them? Who among WE THE PEOPLE makes $100,000 per year? WE THE PEOPLE are living in an economic recession, losing our homes and our jobs by the millions. Yet WE THE PEOPLE are supposed to pay the AIG bailout as well as these corporate bonuses out of our tax dollars?
Would it kill the stock market if any corporation with investments from retirement funds be required to meet quite strict standards in terms of ceilings on compensati
Seems to me that the traders are well -insulated from us, but we are at their mercy.
And let's put the same restrictions in the health industries.
You assume too much. Specifically, you assume that refusing to reward failure is symptomatic of failure "to see the systemic disease that got us here: short-term thinking ..."
quote:
Like raising a thumb to block out the sun, let's take back some 70 odd bonuses and fail on all sides to see the systemic disease that got us here: short-term thinking; the lunatic need for a profit statement this quarter considerably larger than the last, at the expense of every other value.
/quote
_Paying_ bonuses for participating in the most colossal acts of fraud in history only encourages more of the same. Your willingness to sweep that abuse under the rug by paying the undeserved AIG bonuses is what in fact ignores the motive for "the systemic disease that got us here." In short, you're projecting.
That's not what Mr. Lear is saying. He agrees with your position.
The "haves" versus the "have nots". It is what brings down ruling classes throughout history. To allow the latter to reach critical mass is in no one's interests.
As a Money.CNN article yesterday described the opposition to bonuses as, "The pitch-fork wielding anti-bonus mob...", is this a reference to the "have nots"?
The mob mentality rarely involves sound logic a calm reasoning it seems. The mob rarely sees the forest for those pesky trees.
The comments here regarding the power of a solid middle class neglect to mention that they are a buffer between the rich and poor. An indifferent, stoic, sedate mass that does not pay attention and thereby keeps the "Have nots" from reaching critical mass.
As the middle class awakens from it's stupor, their net worths halved in the blink of an eye, forced to look away from sports programming and reality TV, and having to quit Starbucks cold turkey will fail to see any culpability in the present crises. They, as did others, took the easy money loans or refinanced their homes to get more cash to frivolously spend on non-necessities without ever understanding they were actually borrowing money against dreams of ever increasing property values.
And now, the creators of what was once looked upon as opportunity are entirely to blame?
Don't join the mob.
The bonus issue dominates the media attention and policitians are given the chance to bellow. It's red meat for everyone struggling to figure out how Wall Street scammed us. But, also serves to distract our attention away from the corporate criminals who continue to profit from war.
Very true. I am tired hearing about those "bonuses" which in reality were part of contract payments for a particular job done. The people that created the mess were long gone. Those fixing the mess deserve their due pay.
Those who don't learn the lessons of history are doomed to repeat it.
The divide that now exists between the wealthiest and poorest has happened many times in history and we know the results.
Unless we grow the middle class in the USA and get back our middle class jobs, we are doomed.
Novelists could use the following for a political suspense thriller---Forces bent on destroying the USA gain large numbers of shares of US companies, create hugh bonuses for the few decision makers at the top, (making them beholden, like drug users, to their new wealthy lifestyle and their new doublemined sharesholders). Bizarre fake investments are made out of fake mortgages, workers' pay is slashed, unions destroyed, factories sent out of country. Country destroyed, job complete.
Pity we have classes of citizens some more equal under the law than others. lest we forget
chosen which of the following applies to our situation.
pernicious , baneful , noxious , deleterious , detrimental mean exceedingly harmful. pernicious implies irreparable harm done through evil or insidious corrupting or undermining - noxious applies to what is both offensive and injurious to the health of a body or mind - deleterious applies to what has an often unsuspected harmful effect -. detrimental implies obvious harmfulness to something specified
You must be logged in to comment. Log in or connect with
