Illusion of competence

[Muddy]

Illusions of Competence

Following the current news of economic disasters, I am struck by what is missing from the news rather than the usual daily bulletins of bankruptcies, downsizing, layoffs and pleas for bailouts. We have no news of executive officers, presidents, comptrollers and various highly paid executives of banks, brokerage houses, businesses and industries getting the axe. Nothing.

Many of these entities are announcing losses of $$ billions and that they are taking action to reduce costs and blaming their woes on global problems. Excuse me, but these are the executives who sold their knowledge of global markets and international connections as the reason why they should command breathtaking salary and benefits packages. Compensation of high six figures are common while the elitists measure compensation in seven and eight digits.

We have been conned by snake-oil salesmen. We have tens of thousands of private enterprises who employ hundreds of thousands of Canadians who do not pay their executives huge salaries. They are compensated in accordance with their contributions to the operation, and are clearly accountable for their actions. What makes the executives of Megalopolis Inc. any different? So far it appears that the gargantuan operations have an endless source of places to spread blame and zero accountability.

The biggest con of all is that our governments have to pay huge salaries and bonuses to senior civil servants in order to compete with private enterprise. Apparently we are competing with people with delusions of grandeur and no sense of responsibility. Worse, our governments, like mega corporations, allow executives to spread blame and avoid accountability.

Fallout of the current recession has to be a review of executive compensation. If our governments fails to take note and get back to appointing senior civil servants ‘at Her Majesty’s pleasure’ for reasonable compensation based on what they contribute, we need drastic changes to government. We have nothing to lose. If elitist civil servants choose to return to the private sector, so be it. Their peers in the private sector have proven to be overpaid incompetents unworthy of taxpayer support.

[Progressive Tory]

Illusions of Competence

Their peers in the private sector have proven to be overpaid incompetents unworthy of taxpayer support.

Very good article, and while I don't share the opinions of the author completely, I do feel that the faults of struggling corporations, often lies with mismanagement and over compensation for company execs.

Many people blame it on unions, but that's a cop-out. At least with union salaries, we all reap the benefits from the high personal income taxes that most union employees pay. We also benefit from their increased spending capabilities in the form of sales tax and subsequent job creation. I don't personally know any high ranking civil servants, so can't really comment on whether or not they are overpaid.

However, in the U.S. after the first bank bailouts by George Bush, the bank executives took their cut and then starting buying up smaller banks. None or very little of the money went to bank customers or 'victims' of their errors in judgement.

If we have to 'bail out', the executives should be replaced or demoted, and a more competent team brought in to weather the storm.

Many defend corporate tax cuts because of a belief that corporations create employment. If that's true than we should not give tax cuts to corporations who outsource jobs overseas. We should also lower their taxcuts if they immediately go to layoffs to fix their financial problems. Execs should work for $ 1.00 a year until they clean up their acts, and keep as many people employed as possible. Otherwise, close up shop. We can no longer afford to keep you around.

[bush_cheney2004]

However, in the U.S. after the first bank bailouts by George Bush, the bank executives took their cut and then starting buying up smaller banks. None or very little of the money went to bank customers or 'victims' of their errors in judgement.

But there have been no bank bailouts in Canada IIRC. Why should "victims" be rewarded any more than incompetent executives?

If we have to 'bail out', the executives should be replaced or demoted, and a more competent team brought in to weather the storm.

You can skip the bailouts entirely and achieve the same result.

[Vancouver King]

Illusions of Competence

We have no news of executive officers, presidents, comptrollers and various highly paid executives of banks, brokerage houses, businesses and industries getting the axe. Nothing.

CNN reported results of polling this week showing corporate chieftains now are held in lower esteem than used car salesmen and, gawd forbid, politicians. Obama reflected these public perceptions when he chastised Wall Street bankers as "disgusting" for using taxpayer bailout money to award themselves $18 billion US in unearned bonuses.

Disgusting hardly cuts it, although full marks for the sentiment by a president straight jacketed by corporate interests that own the American govt. Surely this latest demonstration of stealing public funds coming on top of spawning frankenstinian derivitives that plague world financial circles, warrants rewards much more severe than loss of inlated bonuses or pay.

My modest proposal? In America's "jail them all" culture, the turn for bankers has arrived. Include in infrastructure spending, funds to build a hundred new prisons to house the worst 20,000 corporate management offenders, all to be charged with a retroactive new law - crimes against the American people.

[bush_cheney2004]

....My modest proposal? In America's "jail them all" culture, the turn for bankers has arrived. Include in infrastructure spending, funds to build a hundred new prisons to house the worst 20,000 corporate management offenders, all to be charged with a retroactive new law - crimes against the American people.

But they weren't crimes against the American people....far from it. The US government was complicit in an altogether very American idea for risk and reward.....winners and losers. Doesn't get any more American than that.

[Vancouver King]

But they weren't crimes against the American people....far from it. The US government was complicit in an altogether very American idea for risk and reward.....winners and losers. Doesn't get any more American than that.

Fine then, at your suggestion, George Bush and his cronies will also be charged.

[Muddy]

Lets not go overboard. The free enterprise system is still the greatest boost to allowing a person the chance to rise above the station they were born into. If CEO`s have committed fraud, just like Conrad Black they should face jail time. It is beyond my comprehension how any honourable person can take a bonus while their company runs into the red , while share holders who have invested in their company are being devastated. Although I only have to answer to my business partner, I still have an obligation to be honest and forthright. We pay our employees,taxes and suppliers first and then if we are into the black and can sustain a downturn in the economy do we reward ourselves with bonuses. I have people and their families, who depend on my stewardship. There are CEO`s who are honourable who get little recognition for being forthright and honest. But they are few and far betwwen unfortunately. Maple Leaf Foods is a fine example of a CEO who earns his money and public trust.

[WestViking]

Lets not go overboard. The free enterprise system is still the greatest boost to allowing a person the chance to rise above the station they were born into. If CEO`s have committed fraud, just like Conrad Black they should face jail time. It is beyond my comprehension how any honourable person can take a bonus while their company runs into the red , while share holders who have invested in their company are being devastated. Although I only have to answer to my business partner, I still have an obligation to be honest and forthright. We pay our employees,taxes and suppliers first and then if we are into the black and can sustain a downturn in the economy do we reward ourselves with bonuses. I have people and their families, who depend on my stewardship. There are CEO`s who are honourable who get little recognition for being forthright and honest. But they are few and far betwwen unfortunately. Maple Leaf Foods is a fine example of a CEO who earns his money and public trust.

I am not sure where you picked this up Muddy, but I am the author. I agree with your comments and did so on the piece:

"We have tens of thousands of private enterprises who employ hundreds of thousands of Canadians who do not pay their executives huge salaries. They are compensated in accordance with their contributions to the operation, and are clearly accountable for their actions."

I strongly support private enterprise, but am appalled at the behaviour of the elitist executives of conglomerates. Business ethic and morality should apply to the big boys too, but they apparently feel otherwise.

[Muddy]

I am not sure where you picked this up Muddy, but I am the author. I agree with your comments and did so on the piece:

"We have tens of thousands of private enterprises who employ hundreds of thousands of Canadians who do not pay their executives huge salaries. They are compensated in accordance with their contributions to the operation, and are clearly accountable for their actions."

I strongly support private enterprise, but am appalled at the behaviour of the elitist executives of conglomerates. Business ethic and morality should apply to the big boys too, but they apparently feel otherwise.

[/quote

It is so well written it is not a surprise to me that this is your work West Viking. Very well done old chap. You will notice that I disclaimed any ownership of this material. Only admiration.

Edited February 26, 2009 by Muddy

[Progressive Tory]

You can skip the bailouts entirely and achieve the same result.

I agree with you. I'm not a supporter of bailouts, and the victims are those lured into 40 year mortgages, or who trusted the banks to invest their savings wisely. If we bail anyone out, it should be them.

I hate to admit this, but I'm sort of an almost kinda' fan of Ron Paul. Like Preston Manning, his beliefs on the surface may sound a little radical, but damn it if they don't make sense.

I watched Mr. Paul on Bill Mahr recently, so naturally wanted to read his bio. For those of you who don't know, he is a Republican congressman who believes that the gov't should just let the banks fail. It will sort itself out without intervention. He's a grassroots guy who has quite a following.

Read his bio here.

"He criticized the Republican party for abandoning its principles of limited constitutional government, low taxes, free markets, and sound monetary policies, and in particular strongly opposed American involvement in the War in Iraq. He also called for abolition of many federal institutions including the FBI, CIA and Department of Education, abolition of the federal income tax and an end to the war on drugs."

I don't agree with everything he says, but a lot of it is worth considering. Only the criminal element is winning the War on Drugs.

[Progressive Tory]

But they weren't crimes against the American people....far from it. The US government was complicit in an altogether very American idea for risk and reward.....winners and losers. Doesn't get any more American than that.

They were crimes against the American people when they took money that was supposed to help them, and instead used it to help themselves.

I think prison's too good though. They should spend the rest of their lives in community service, with mop and bucket, or garbage bag and shovel.

[Progressive Tory]

But they are few and far betwwen unfortunately. Maple Leaf Foods is a fine example of a CEO who earns his money and public trust.

I'm not against corporations, just the corporate executives' culture of entitlement. If they do a good job they should be rewarded. If they screw up, they should be demoted.

Lawyers love corporate executives now though, because they're no longer the brunt of jokes. OK, maybe they still are, but they now have company.

Q: What do you have when an executive of a failed corporation is buried up to his neck in sand?

A: Not enough sand.

[Progressive Tory]

I strongly support private enterprise, but am appalled at the behaviour of the elitist executives of conglomerates. Business ethic and morality should apply to the big boys too, but they apparently feel otherwise.

Exactly. They give everyone in the profession a bad name.

[bush_cheney2004]

Fine then, at your suggestion, George Bush and his cronies will also be charged.

Charged with what....not being thrifty Canadians? As Oleg pointed out, we actually did manage to convict one of the scammers....turned out he was Canadian (Conrad Black)!

[Topaz]

They were crimes against the American people when they took money that was supposed to help them, and instead used it to help themselves.

I think prison's too good though. They should spend the rest of their lives in community service, with mop and bucket, or garbage bag and shovel.

I agree with you, don't they have special prisons for the rich in the US, so they can relax while doing their time? I saw one CEO that did go to jail and spent all day playing tennis!

[madmax]

Charged with what....not being thrifty Canadians? As Oleg pointed out, we actually did manage to convict one of the scammers....turned out he was Canadian (Conrad Black)!

Thank you. I appreciate that very much. Turned out he wasn't at Canadian Citizen though.

From Wiki

Conrad Moffat Black, Baron Black of Crossharbour, PC, OC, KCSG (born 25 August 1944, in Montreal, Quebec) is a Canadian-born British convicted criminal, historian and columnist who was for a time the third biggest newspaper magnate in the world

[bush_cheney2004]

Thank you. I appreciate that very much. Turned out he wasn't at Canadian Citizen though.

From Wiki

Take it up with Oleg....if he says Black was Canadian, that's good enough for me!

[Michael Hardner]

I watched Mr. Paul on Bill Mahr recently, so naturally wanted to read his bio. For those of you who don't know, he is a Republican congressman who believes that the gov't should just let the banks fail. It will sort itself out without intervention. He's a grassroots guy who has quite a following.

I point out that Mr. Paul is a shady demagogue who came out of nowhere, and is mostly supported by many internet blogs and forum readers. His policies appear to be grassroots, however they are extreme. He wants to abolish the Federal Reserve System, and has somehow convinced his followers that this move would be as effortless and simple as flipping a switch. ( There's also a matter whereby he allowed extreme racial views (against African Americans) to be published in his newsletter. That was supposedly a mistake, however it shows you the kind of company he was keeping at that time.)

Before the Federal Reserve guaranteed banks, you didn't know if your savings were safe. Banks failed, leaving depositors in ruin. There could be disastrous effects on the worldwide credit system if the banking system was fundamentally changed as he proposed, yet he just says it and his followers believe him.

When a new medium such as the internet enters into the public sphere, there is always an example of a new politics that rides on its coat tails. With television, it was JFK. With radio, in Germany, it was Hitler.

We need to hold these new politicians to the same standards as the old ones, and to absolutely listen to the established wisdom about their new ideas.

[WestViking]

Take it up with Oleg....if he says Black was Canadian, that's good enough for me!

Conrad Black was a Canadian. When he became eligible for a British title, Jean Chretien refused to allow Black to take the title, so Black renounced his Canadian citizen and became a British Lord. Black is currently a British citizen doing time in an American prison.

[WestViking]

I would respectfully submit that politicians and political parties share illusions of competence with major corporations and their elite executives.

[Progressive Tory]

We need to hold these new politicians to the same standards as the old ones, and to absolutely listen to the established wisdom about their new ideas.

I didn't say I agreed with everything he said, only that some of it made sense. He's not the only one suggesting that the banks should be allowed to fall. They definitely have not spent their 'bail out' money wisely, which should have gone directly into the bank and not the pockets of the bank executives.

I'm not a follower of his. That was the first time I'd ever heard of him.

However, I think we need to hold the old politicians to the same standards as we thought we were holding them to, and when their established wisdom becomes nonsense, start looking for new ideas from others.

There will be a lot of hits and misses, I'm sure.

[Progressive Tory]

I would respectfully submit that politicians and political parties share illusions of competence with major corporations and their elite executives.

I think many of them already are.

[Shady]

They were crimes against the American people when they took money that was supposed to help them, and instead used it to help themselves.

Not all of them did. And if you want to blame somebody, blame Congress for not attaching any rules to the way the bailout money was suppose to be used. You can't give someone $20 dollars no strings attached, and then complain about the way they spend the money.

[Progressive Tory]

Not all of them did. And if you want to blame somebody, blame Congress for not attaching any rules to the way the bailout money was suppose to be used. You can't give someone $20 dollars no strings attached, and then complain about the way they spend the money.

I agree with you. The Bush Administration or Congress, or whoever holds the public purse, should have controlled the bailout money since it belonged to taxpayers, who are getting it from both sides. I won't argue with you there.

However, the fact is that we are entering unknown territory with this recent economic crisis, so all options should at least be looked at. There are probably no right or wrong answers, but just handing out cash with no strings attached doesn't sound like a good option.

It'll be a lot of hit and miss from here on in, in Canada and the rest of the world.

[Oleg Bach]

Not all of them did. And if you want to blame somebody, blame Congress for not attaching any rules to the way the bailout money was suppose to be used. You can't give someone $20 dollars no strings attached, and then complain about the way they spend the money.

Like I said, bail out money is just the theft of money from the helpless and trusting citizenry...money created our of thin air..they give that air to their rich friends and leave us gasping. There are no rules attatched to bail out money - in America there were no rules in regards to invading an atonomous nation and smashing it back into the stone age...so why would you expect them to act with more moral fiber when dealing domestically - Kind of like the crooked sister who steals from the family because she knows we love and trust her...some governments are not to be trusted ----- + = You give a billion bucks to a failing company and still fire 50 thousand employees?? What the heck - It would be legit if you gave a billion bucks and KEPT the employess..this is not complex.