I read this and I felt the need to write. No matter what side of the isle you stand on these questions will make you think about the current economy and what the past has done and the future does hold……
http://www.washingtonpost.com/wp-dyn/content/discussion/2009/03/17/DI2009031701148.html
Transcript
Public Outrage Over AIG
Fed Decided Payouts Couldn't Be Stopped
Jonathan Macey
Professor of Corporate Law, Corporate Finance and Securities Law, Yale Law School
Tuesday, March 17, 2009; 1:00 PM
Here I sit with a job! Thank the God of your choice. I have a home. I managed to keep it. Most of my family is working, as are many of my friends. I should sit here and think well this isn’t about me… Well guess what it is about me and you and that fellow over there. T’aint over in fact we are just beginning.
I like many am outraged that anyone in this current market is receiving bonuses. Out side of auctioneers, repo men/women and appraisers I cannot think of anyone who is having a stellar year. I do understand that under contractual law bonuses must be paid. Fair enough I understand that the legal system is what makes us different. We could after all be wild-eyed idealist who would round up those we deem corrupt, unworthy, lacking in socially acceptable values and shoot them or maybe send them away for reeducation? WARNING!!! It has happened before it could happen again.
Back to the point, I sat and pondered why are bonuses expected? Isn’t a bonus something earned for hard work and profit? Then it hit me! Yes they are. In the past when industry boomed a bonus was paid without question. Okay, a raise given and all was well. My question is what is the cost of this system.
Nothing if you follow an ethical value system. Before you start thinking I have gone soft I have not. I am not talking about sexual morality, drinking or others forms of leisure. I leave that too religion and personal choice/responsibility. I am talking about right and wrong or personal gain over the losses of many, hundreds, thousands and millions.
Business has played a game of chance. When you roll 7 11 is not always the way the dice land. Sometime you do get snake eyes and you do not make your point. The there is Business Hedonism! When did hedonism become the mantra? I am just a guilty I like pleasure and dislike pain but not at the cost of others. In order to get those lovely gold coins you must put all else aside and look only to lining your own pockets.
No one asks the simple question at AIG or many other companies what does this action mean for next month? Next year, next decade and so on... There in lies the rub. AIG is a VERY large reflection of the problem. As a nation no as a world we are about self-gratification. Executives become multi-millionaires because of a company success. Still when the company is not successful they still become millionaires go home and need not work again.
Now add to that that bonuses are driven by a company’s bottom line. Sounds good but what if a business puts aside good judgment and only looks to income in order to gain that bonus. I know that I am selling something that is horrific but the mark up is good the return easy and the profit marvelous. I have made a mint and my bonus is stellar. I think I will go buy a vacation home in Tuscany and drive a sports car!
Then sometime after I find that I have made brown fields, caused cancer in consumers using my product and am now in the middle of crippling lawsuits. My company lets me go for my efforts. I still have my bonus from days past, I still get my buy out and I am still living a pleasant life in Tuscany and driving a new sports car.
As far as I can tell there is no down side unless of course you work for said company. You know those 8 hour a day five days a week people. Who are now jobless, getting buy on unemployment and wondering what happen? I was doing my job and then wham here I am.
So AIG makes some bad investments (gambling). They at first make a mint. They write contracts for employees so that bonuses are no long earned but an expectation. Want to make more money take high risks they pay off well. Gamble with the money of others you will be well rewarded but if you fail no problem those 8 hour a day five day a week former employees will bail you out from the tax dollars they are paying from their lowly unemployment checks….
Can I hear a cheer for immediate gratification?
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