A Lou Dobbs induced orgasm | 53 comments (53 topical, 0 hidden)
KenTX (none / 0)
That post shows that you are not sure what a "free market" even means...defaulting on debt is not a neoliberal or free market solution that is a case of failure of the system to support its own contradictions, as we have seen with the subprime market. Contradiction = crisis...look familiar?

Blog: http://perspectivos.blogspo t.com/

by Nick86 on 05/09/2008 12:26:16 AM EST

Government meddling in private affairs. (none / 0)
Most of these problems began when the federal government got involved in the business of regulating personal bankruptcy laws. This meant that consumers were on the hook, and they couldn't walk away as easily from debt. Then predatory lenders started pushing easy (high interest) credit on every consumer in America, and turning them into enslaved, indentured servants.

It just goes to show what happens when the federal government starts regulating the affairs of the people. There are always disasterous, unintended consequences, because they come up with stupid ideas, like biofuels, that cause global crop shortages and starvation. 

by KenTX on 05/09/2008 10:32:03 AM EST

[ Parent ]
Somebody shoot me (none / 0)

for agreeing with ken. I guess I'm more of a libertarian on issues like these. My main problem with ken's scenario is that you can't be a half-assed libertarian for it to work, you gotta go all the way. That means when bear-stearns comes crawling hat in hand you give'em the finger. Future generations of wall street investors would have you to thank for your tough-minded principled policy that ushered in an era of accountability.

Here's the catch, that's never gonna happen. Ideologically if someone was going to do this, it would have been the repubs. But you saw exhibit A of how that's an impossible outcome just last month. That's why in terms of policy, I favor an amount of regulation that protects consumers and prevents economic meltdowns. 

by hazmat on 05/09/2008 01:29:29 PM EST

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Ask Bear Stears shareholders (none / 0)
and Bear Stearns employees, and Bear Stearns creditors, and Bear Stearns lendors if they feel "bailed out".

The Feds merely facilitated transfer of control and assets to shore up confidence in the U.S. financial market, and prevent a run on the financial instititutions.

The demise of Bear Stearns was healthy for the economy, as was the demise of Enron. I have stated this position in the past.

What the federal government needs to regulate is transparency. When a lender loans money to a person with terrible credit, and bundles thousands such loans into derivative packages to be sold to investment houses, the buyer needs to know what he's getting himslef into. Same with Enron. Investors need transparency in order to make good decisions.

by KenTX on 05/09/2008 03:50:34 PM EST

[ Parent ]
agree re: bs and enron (none / 0)
I do appreciate the benefit of these companies going down, and the need for transparency. Ultimately good for the market. I'm interested in your thoughts on why executive salaries have continued to go up and corporate malfeasance is on the rise even in the wake of enron. Do you A) think there's no corporate malfeasance or B) think the wave of unaccountability has yet to crest and there's a correction coming (maybe we're hitting it NOW). I'm not using the corporate malfeasance term as a pejorative here, I'm really referring to the shell games of the type Enron played in the leadup to their meltdown. I have another question for you about your views on enron, but that can wait.

by hazmat on 05/09/2008 04:10:26 PM EST

[ Parent ]
Rainmaker (none / 0)
Executive salaries increase rapidly for the same reason that NFL head coach salaries increase rapidly. Corporations and NFL owners are trying to buy a quick fix.

In fact, it would be interesting to see a plot of average CEO salaries versus average NFL head coach salaries over the past 20 years. I’ll bet they follow the same trajectory.

If you think Jeff Skilling of Enron was bad, you should consider the malfeasance of Jeff Immelt. I knew him when he sold plastics in Dallas, and now he’s being paid big bucks to run GE over a cliff.

American business has always focused on the latest earnings statement. Nobody is measured or rewarded for growth in earnings 5-10 years from now. That’s not really good for creating a vision of long term growth.

In my own experience, I’ve been offered big money to take on projects with medium-sized companies as a “rain-maker” because I have a lot of market knowledge. What happens is that you sign a contract with a huge salary, and the company expects instantaneous results. There is never any way to live up to the expectations for a quick fix, and everyone winds up disappointed. Fortunately, I never took the bait. I’ve always preferred base hits to swinging for the fences.

by KenTX on 05/09/2008 04:40:17 PM EST

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You're officially interesting (none / 0)

to talk to, if not entirely credible. I'm just messin with you dude. Thanks for a thoughtful reply. I'm always a little skeptical when people say they "turned down the big bucks" for their current gig, but since I have at least one friend that I know did this for a fact, I know it happens, and for good reasons. Anyway have a good weekend.

by hazmat on 05/09/2008 06:33:02 PM EST

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That is not what I think of (none / 0)
When I think of overpaid CEOs I think of the guys who run a company not just into the ground but 6 feet under the ground and then get 10s of millions of dollars walking out the door.  Like the Tyco guy.  Near as I can tell they take over, fabricate a prospectus, launch an IPO based on lies.  Everyone who owns some of the company at launch makes a bunch of money, CEO leaves with his suitcases of cash, company collapses, employees and defrauded investors are fucked.  Bush tells government to make up crimes against Don Siegelman.

by ProfRich on 05/10/2008 01:44:52 AM EST

[ Parent ]

A Lou Dobbs induced orgasm | 53 comments (53 topical, 0 hidden)