We are in the greatest economic crisis in almost 80 years and attempts at saving the economy, not only in the US, but throughout the world, are being turned into a circus.
First we had a big flap about earmarks, which while deplorable, represent minutia, and now we have what can only be describes as a lynch mob after the heads of the bonus recipients at A.I.G (.mp3).
The outrage is understandable, but the bonuses represent less than 1% of the money used to shore up A.I.G. If this becomes the basis for stopping further aid to the financial industry, then we would be cutting off our noses to spite our faces.
We have not and will not invest money in A.I.G. or anyone else to help them or their executives or their stockholders, but in order to save the liquidity of our economic system, and in the process revive our economy. Any distraction from that task is a disservice, particularly coming from politicians who have for years protected and defended the system they are now denouncing.
We have much to learn from history. During the Revolutionary War the Continental Congress issued I.O.U.s (since it had no taxing power) in order to pay its bills, including paying the men of the Continental Army. By the time the war ended it was generally assumed that these I.O.U. were worthless and speculators bought them up for pennies on the dollar. With Washington President, and Hamilton Secretary of the Treasury, the question arose whether the I.O.U.s should be paid at their face value. (Bulls, Bears, Boom, and Bust by John M. Dobson, p.64) The populist response was that to pay these speculators the benefits of their speculation was unfair and rewarded those who had done nothing for the war effort, while defrauding those who did. Hamilton argued, however that the issue was the “Full Faith and Credit” of the U.S. which would be endangered by a failure to honor its I.O.U.s. Hamilton prevailed and the “Full Faith and Credit” of the U.S. has never been in doubt since.
The point is that sometimes we must hold our noses and let those reap who have not sown, for the greater good of our nation.
But there is a lesson to be learned. We have arrived at this cross road because our vaunted capitalistic system has turned into crony capitalism. The outrageous bonuses paid the execs at A.I.G. are but the tip of the iceberg and we need to address the greater problem. This from the Wall Street Journal of April 28, 2008:
“According to the Congressional Research Service, the average pay for CEOs was more than 180 times average worker pay, up from a multiple of 90 in 1994. Total direct compensation for CEOs was a median $8.8 million, counting salaries, bonuses and other incentives, as well as the value of restricted stock, stock options and other long-term incentive awards at the time they were granted, according to a survey by the Hay Group of 200 major U.S. companies.”
But what is even more outrageous is the severance pay that top execs in our corporate culture receive. As long ago as December 25, 2005, the NY Times discussed this problem. “In 2000, for example, after three years as chief executive, M. Douglas Ivester left Coca-Cola with almost $120 million jangling in his pocket. Included were a six-year consulting agreement, office space, furniture, home security service and country club dues. Steven J. Heyer, a former Coca-Cola president, struggled under the weight of a severance package worth $24 million when he left the company in 2004. He held his position for only three years as well. And Douglas N. Daft, a former chief executive, pocketed more than $36 million when he left Coca-Cola in 2004.”
When executives leave after a successful stint in their jobs with such outrageous severance packages it is bad enough, but often it is after they have all but destroyed the company under their tutelage and leave pursuant to severance agreements that amazingly enough provide that they are entitled to such rewards if they are fired. In other words they do even better if they fail then if they succeed. Talk about reverse incentives!
Thus for example, the CEO of the company I used to work for, Richard J. Kogan, departed Schering-Plough after wrecking the company, received $13.2 million in severance and $26.4 million in retirement payments. This was after Kogan had gotten the company into a war with the one government agency no drug executive can afford to antagonize, the Food & Drug Administration, by reducing quality controls to unacceptable levels in an effort to cut costs, causing the companies share price to fall from $50 to about $36 in a short time, and after he was charged by the SEC of giving insider information to a group of select investors.
But this is but one of many outrages. Other examples are set forth on the Obama website referenced above.
These abuses occur not because competition of the market requires it, but because of a system where neither the public nor even shareholders have any say, and when execs destroy a company it is the shareholders and innocent employees who bear the burden. Unfortunately, it is not shareholders who decide on compensation. It is the Board of Directors! And who chooses the Board of Directors? Usually the CEOs. To be sure Shareholders get a chance to vote at shareholder meetings for the Board, and whatever issues are placed before them, but the only choices they really have is to vote yes or no on whatever the management chooses to let them vote on. And increasingly, shareholder meetings are held at out of the way places so as to discourage shareholders from attending. God forbid, they might ask embarrassing questions. They are asked to send in their proxies to confirm what has already been decided. The Chinese communist voting system is not much different.
We should not ever consider government compensation controls. But changing the governance of American corporations so as to give shareholders a real say in the companies they invest in, is way overdue.
We must not learn the wrong lessons from the banking and liquidity crisis!
Showing posts with label Homeland Security. Show all posts
Showing posts with label Homeland Security. Show all posts
Thursday, March 19, 2009
Sunday, September 17, 2006
“The Only Thing We Have To Fear is Fear Itself”
Franklin Roosevelt famously said, “The Only Thing We Have To Fear is Fear Itself” The present Republican Administration and Al Qaeda urge us to be afraid.
Why do they do this? The Administration because they believe that if the country is sufficiently afraid it will cede a degree of power to them, unprecedented in American history, and support their goal of maintaining power ad infinitum.
Al Qaeda because they do not have the power to win against us militarily. They have no armies; they can only commit acts of terror. And what is the purpose of terror; it is to make people afraid. And making people afraid is their main and only weapon, for as Roosevelt said in that famous speech, “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Would bringing down the Trade Center and killing over three thousand civilians bring America to its knees. Hardly! That could not be done by the destruction of two Trade Centers, nay not by the destruction of ten. But if Americans are afraid enough, become suspicious of each other, can be made to turn against each other, and against it’s Muslim inhabitants of somewhere between 2 and 6 million, -----Ah but what a victory- if they could turn those people or even a small portion of them into terrorists-, what a victory for Al Qaeda that would be.
Throughout the world there are between 700 million and 1.2 billion Muslims, most of whom now are on the sidelines trying to lead their lives peacefully, trying to feed their families. If they could turn those people, or even a small portion of them, into terrorists-, what a victory that would be.
But how can they accomplish this. The answer is they can’t. Only we can do that for them. And we will only do that for them if we are afraid enough.
In fact if we are afraid enough we will stop traveling by plane, and then by train and then hesitate to lead normal lives and our economy would collapse. What a victory that would be.
The Administration says those who criticize it are lending “Aid and Comfort to the enemy” No, it is this Administration that is “lending aid and comfort to the enemy.
They say they want to make us safe but they didn’t take the threat seriously enough to prevent 9/11. They say there was no magic bullet that could have prevented it. That is a lie. Long before 9/11 the Israeli’s had Air Marshals on their planes. They had reinforced cockpit doors on their planes. Why didn’t we do that? They say why didn’t Clinton do that? But Clinton foiled an attack on the Trade Center; On June 24, 1993 the Clinton Administration foiled a plot to bomb several New York City landmarks. The targets were the United Nations building, 26 Federal Plaza, and the Lincoln and Holland tunnels. The plotters were connected to Ramzi Yousef and Sheikh Omar Abdul-Rahman. If the bombing, planned for later in the year, had been successful, thousands would have died. Eight people were arrested. Clinton recommended extensive legislation to thwart future attacks but the Republican Congress said No! They wanted to get Clinton not Al Qaeda.
Bush had eight month before 9/11 with a friendly Republican Congress and he did nothing. Terrorism simply wasn’t on his agenda. He was planning to invade Iraq to show his Daddy that the egg was smarter than the chicken. But he knew the American people wouldn’t go along. And then 9/11 happened and he saw his opportunity. With the trauma of 9/11, and carefully orchestrated lies, he led the country to war. He sent our troops there without adequate equipment and without any plan for the post war. He believed in war but not nation building, and so he created a mess so bad that “all the horses and all the kings men can’t put Humpty Dumpty together again”
He sent our troops to Iraq where they are accomplishing nothing and are sitting ducks for the insurgence. Does he think that if he gives our enemies sacrificial lambs to slaughter, they will be less interested in hitting the homeland?
He talks about protecting the homeland. But when Democrats proposed the creation of a Department of Homeland Security he opposed it, and when the public demanded it, he made it appear that it was his idea all along and that was a lie. But then he insisted that all the employees of the new Department be stripped of Civil Service protection and when Democrats objected he turned it to his political advantage by claiming that Democrats only wanted to protect unions. In fact what he wanted, and what he did, was to turn the Department into a huge patronage mill of incompetents, as became apparent when the first test for the Department came before and after Hurricane Katrina. “Brownie, you're doing a heck of a job” has become immortal as symbolic of the incompetence and the president’s detachment.
Proposals to protect our ports by checking for radioactive devices before ships leave for our land are opposed by the Administration and the Republican Congress. They say it is too expensive and inconvenient. They refuse to institute measures to protect our chemical plants from attack.
And now it turns out that our president has ordered people to disappear. They call it rendition. People are kidnapped from anywhere on the globe because somebody thinks there is something suspicious about them and they are whisked to a secret location to be tortured, only it isn’t torture, it is, well its inflicting pain, its inflicting humiliation, but the president tells us it isn’t torture. Mr. President what is torture? What kind Orwellian world are you trying to create? How does Abu Graib differ from what you admit you have sanctioned.
And we will have courts where people, who the president has decided are guilty, will be tried to find out if they are guilty. They will not be allowed to see the evidence against them so they can’t rebut it, they may not even be allowed in court some of the time, and at the end they will be found guilty. Since we know they are guilty why do we need trials at all? Or as Alice in Wonderland said, “First the sentence, then the trial.”
Shades of Pinochet in Chile. He too was protecting the home front, and so was Alberto Fujimori in Peru. And so was the military in Argentina. They are always protecting us. Only who will protect us from them. Now Pinochet is facing trial in his own country, Fujimori is a fugitive and the military in Argentina are facing an uncertain fate.
I take it back! We should be afraid. We should be afraid of people in power who want more and more power to protect us. They are the real threat.
And that is not all. The lies have already started about Iran. They are not a government any of us like, and hopefully the Iranian people will take matters into their own hands and depose them, but do we want to go to war again. What would be the consequences of war? Iraq would be a picnic by comparison. Our oil supplies would be decimated and quite possibly, maybe even likely, we would face a worldwide recession or possibly even depression. But Bush has his mission and he will scare us with a little truth, a little half-truth, and a lot of lies and he will tell us, “Be Afraid”
Are the American people really so afraid and so naïve as to be taken for this ride?
The article in the Los Angeles Times entitled, "Bush Fails to Recapture the Nation’s Post-9/11 Unity" which can be found here is recommended reading.
Why do they do this? The Administration because they believe that if the country is sufficiently afraid it will cede a degree of power to them, unprecedented in American history, and support their goal of maintaining power ad infinitum.
Al Qaeda because they do not have the power to win against us militarily. They have no armies; they can only commit acts of terror. And what is the purpose of terror; it is to make people afraid. And making people afraid is their main and only weapon, for as Roosevelt said in that famous speech, “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Would bringing down the Trade Center and killing over three thousand civilians bring America to its knees. Hardly! That could not be done by the destruction of two Trade Centers, nay not by the destruction of ten. But if Americans are afraid enough, become suspicious of each other, can be made to turn against each other, and against it’s Muslim inhabitants of somewhere between 2 and 6 million, -----Ah but what a victory- if they could turn those people or even a small portion of them into terrorists-, what a victory for Al Qaeda that would be.
Throughout the world there are between 700 million and 1.2 billion Muslims, most of whom now are on the sidelines trying to lead their lives peacefully, trying to feed their families. If they could turn those people, or even a small portion of them, into terrorists-, what a victory that would be.
But how can they accomplish this. The answer is they can’t. Only we can do that for them. And we will only do that for them if we are afraid enough.
In fact if we are afraid enough we will stop traveling by plane, and then by train and then hesitate to lead normal lives and our economy would collapse. What a victory that would be.
The Administration says those who criticize it are lending “Aid and Comfort to the enemy” No, it is this Administration that is “lending aid and comfort to the enemy.
They say they want to make us safe but they didn’t take the threat seriously enough to prevent 9/11. They say there was no magic bullet that could have prevented it. That is a lie. Long before 9/11 the Israeli’s had Air Marshals on their planes. They had reinforced cockpit doors on their planes. Why didn’t we do that? They say why didn’t Clinton do that? But Clinton foiled an attack on the Trade Center; On June 24, 1993 the Clinton Administration foiled a plot to bomb several New York City landmarks. The targets were the United Nations building, 26 Federal Plaza, and the Lincoln and Holland tunnels. The plotters were connected to Ramzi Yousef and Sheikh Omar Abdul-Rahman. If the bombing, planned for later in the year, had been successful, thousands would have died. Eight people were arrested. Clinton recommended extensive legislation to thwart future attacks but the Republican Congress said No! They wanted to get Clinton not Al Qaeda.
Bush had eight month before 9/11 with a friendly Republican Congress and he did nothing. Terrorism simply wasn’t on his agenda. He was planning to invade Iraq to show his Daddy that the egg was smarter than the chicken. But he knew the American people wouldn’t go along. And then 9/11 happened and he saw his opportunity. With the trauma of 9/11, and carefully orchestrated lies, he led the country to war. He sent our troops there without adequate equipment and without any plan for the post war. He believed in war but not nation building, and so he created a mess so bad that “all the horses and all the kings men can’t put Humpty Dumpty together again”
He sent our troops to Iraq where they are accomplishing nothing and are sitting ducks for the insurgence. Does he think that if he gives our enemies sacrificial lambs to slaughter, they will be less interested in hitting the homeland?
He talks about protecting the homeland. But when Democrats proposed the creation of a Department of Homeland Security he opposed it, and when the public demanded it, he made it appear that it was his idea all along and that was a lie. But then he insisted that all the employees of the new Department be stripped of Civil Service protection and when Democrats objected he turned it to his political advantage by claiming that Democrats only wanted to protect unions. In fact what he wanted, and what he did, was to turn the Department into a huge patronage mill of incompetents, as became apparent when the first test for the Department came before and after Hurricane Katrina. “Brownie, you're doing a heck of a job” has become immortal as symbolic of the incompetence and the president’s detachment.
Proposals to protect our ports by checking for radioactive devices before ships leave for our land are opposed by the Administration and the Republican Congress. They say it is too expensive and inconvenient. They refuse to institute measures to protect our chemical plants from attack.
And now it turns out that our president has ordered people to disappear. They call it rendition. People are kidnapped from anywhere on the globe because somebody thinks there is something suspicious about them and they are whisked to a secret location to be tortured, only it isn’t torture, it is, well its inflicting pain, its inflicting humiliation, but the president tells us it isn’t torture. Mr. President what is torture? What kind Orwellian world are you trying to create? How does Abu Graib differ from what you admit you have sanctioned.
And we will have courts where people, who the president has decided are guilty, will be tried to find out if they are guilty. They will not be allowed to see the evidence against them so they can’t rebut it, they may not even be allowed in court some of the time, and at the end they will be found guilty. Since we know they are guilty why do we need trials at all? Or as Alice in Wonderland said, “First the sentence, then the trial.”
Shades of Pinochet in Chile. He too was protecting the home front, and so was Alberto Fujimori in Peru. And so was the military in Argentina. They are always protecting us. Only who will protect us from them. Now Pinochet is facing trial in his own country, Fujimori is a fugitive and the military in Argentina are facing an uncertain fate.
I take it back! We should be afraid. We should be afraid of people in power who want more and more power to protect us. They are the real threat.
And that is not all. The lies have already started about Iran. They are not a government any of us like, and hopefully the Iranian people will take matters into their own hands and depose them, but do we want to go to war again. What would be the consequences of war? Iraq would be a picnic by comparison. Our oil supplies would be decimated and quite possibly, maybe even likely, we would face a worldwide recession or possibly even depression. But Bush has his mission and he will scare us with a little truth, a little half-truth, and a lot of lies and he will tell us, “Be Afraid”
Are the American people really so afraid and so naïve as to be taken for this ride?
The article in the Los Angeles Times entitled, "Bush Fails to Recapture the Nation’s Post-9/11 Unity" which can be found here is recommended reading.
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