There is a slew of reports this week that paint a pretty bleak picture. The Labor Department has placed the unemployment rate at 9.4 percent (the highest since 1983), If you add “temp workers” the rate is higher. In the meantime, another report indicates that over 16% of personal income of the United States is now coming from the government.
while
With jobs cuts continuing, we are now at an unemployment rate of roughly one in ten Americans — not including temp jobs or low wage service jobs.
The good news is that the loss of jobs is slowing.
However, we are now seeing the impact of our crushing deficit spending. The government has been pouring out money and it is now endangering recovery according to the Chinese who hold $768 billion in our Treasuries, here.
I’d keep on writing but the combination of these reports and the invention of a new robot teacher has led me to start a subsistence garden.
For the unemployment story, click here.
“me: stock options are one way that employees can earn bonuses for doing good work and most options are deferred and meted out only after they have been fully vested over a period of years.”
GWLSM,
Was your husband a CEO, COO or other top level manager? That makes a difference because in my mind it’s the people at the top, making ridiculous compensation, that ruin the firms. Since you’ve alluded to your current troubles, I think I’m safe to assume that your husband wasn’t one of those making $100 million dollar bonuses. I get bonuses and don’t think they’re wrong per se, but it disturbs me when the people at the highest levels get to set their own compensation. Kind of a fox in the hen house situation.
Mike S writes:
Don’t get me started though because I feel the anger bubble up in me when this topic is discussed and that’s bad for my heart condition. One of the many failures of this system is the use of stock options as compensation. This should be banned. All stock options do is ensure that rather than looking at taking care of a firms bottom line, the Executive
looks at its stock price. This makes short term policies like firing the best people raise the stock price, but destroy the future of the company.
me: stock options are one way that employees can earn bonuses for doing good work and most options are deferred and meted out only after they have been fully vested over a period of years. thank god for them. because my husband had good ones that he was able to cash in when he lost his job we are surviving. of course, we had decided to use those to pay for our kid’s education and that worked for 4 years, but we have 2 years left and that money is being used to sustain us right now.
IS,
When I retired from NYC Government I led an operation of 300+ employees, located in 15 different offices around the City. I had also, in my part time developed a reorganization plan for a medium sized Agency to ensure greater efficiency and savings.
In the 3 years I served in the position I had saved NYC $150 million in sanctions. Yes I could run a company. The thing is while I’m a good leader of people and an excellent analyst, I don’t have the ego or interest to always be on top. I did what I did to support my family, but garnered no real pleasure from the 12 hour days, constant deadlines and the pressure. Perhaps that is why I am now disabled by a heart condition.
Puzzling,
You are right there are ways to work around it, but even long term stock options can be highly beneficial with an early retirement or change of company. The fact is too that while some company’s have adopted this, most of the major ones haven’t, or the policy has been reversed by powerful executives who control the Board.
When I received my BBA degree in the mid 60’s the conventional wisdom taking hold was to go into the business world and rise by moving from company to company to increase position and compensation. This soon became the mantra and the idea of spending one’s career with one company became a thing of the past. This too has led to instability in the business environment.
Mike raises an excellent point on compensation and incentives.
One way that firms work around the potential stock “pumping” conflict is to have the stock options begin to vest years out so that there is no reward for short-term price changes. This aligns management interest with those of the owners, the stockholders.
Another method is to distribute a moderate level of stock options to working level staff and management. These staff tend to stay for longer and have an strong interest in derailing self-destructive initiatives from senior management. In my experience in the private sector this is actually quite effective.
Didnt Clinton cap executive pay? And didnt that cause other methods of compensation to come about.
Even though I believe in free markets I also believe that there are many qualified people to lead large corporations and there is some sort of lemming like mentality when it comes to CEOs. People just blindly follow them even if they dont know shinola.
I bet GMOM and Mr. Mike could run a decent size corp as well as any of the current crop of execs.
“There are plenty of other qualified leaders and upper level managers who could do better with less and would not balk at a $750K/yr salary until their company was back in the black. as long as we own their companies we ought to have some say in the salaries, hiring and firing of CEO’s”
GWLSM,
This is so true. Most people who rise to the top of any hierarchy are not the most capable, but those most adept at “office politics.” This tends to insure that the greedy and the egotistical assume commands, rather then the best able to lead.
Don’t get me started though because I feel the anger bubble up in me when this topic is discussed and that’s bad for my heart condition. One of the many failures of this system is the use of stock options as compensation. This should be banned. All stock options do is ensure that rather than looking at taking care of a firms bottom line, the Executive
looks at its stock price. This makes short term policies like firing the best people raise the stock price, but destroy the future of the company.
I could detail the many ways that Executive compensation is destructive to business, but I bet you know them all already.
Mike S you wrote: 3.”I think the idle rich are full of the stuff that comes out of the south end of a north bound mule and dont disagree with your assesment on that score.”
What you don’t realize is that the CEO’s of most of our largest Corporations and their minions are also like the idle
rich. People bitch when a ballplayer makes $25 million a year for being in the top thousandth of a percent in the world for his skill. Yet until this latest financial disaster most people were uninterested in the fact that some CEO was pulling down $100 million a year, by firing workers, lowering benefits and then destroying the future viability of his corporation. These guys normally aren’t even in the class of being in the top 20% of executives. They fly in private jets, do business on the golf course and at long lunches and dinners in the most expensive restaurants. They too are the “idle rich” and we should tax the hell out of them.
Just thing morning it was reported that attempts to limit CEO salary/bonus pay for those whose companies are receiving bail-out $$ was too onerous. $750k a year was thought to be way too little and would force these pampered few to seek jobs overseas. I say: Let ’em go. Show them the door. Today. There are plenty of other qualified leaders and upper level managers who could do better with less and would not balk at a $750K/yr salary until their company was back in the black. as long as we own their companies we ought to have some say in the salaries, hiring and firing of CEO’s
Mr. Mike:
I like this quote from the good Rabbi:
“He who refuses to learn deserves extinction”
But good thoughts about corporate excess.
Disagree about Burke and Locke though, a good idea is a good idea and human liberty is always a good idea.
Your dad was a lucky man to have loved your mother that deeply.
IS,
I appreciate the words about my father, he was tough but died a 54 because my mother and his dreams had died before him.
Here’s where we differ:
1. Private Industry can do it better and cheaper:
I would really like to see proof of that since I worked for government for 32 years (a reaction to my father perhaps)and we consistently performed our tasks better and cheaper than private industry. In my last 10 years I was the guy who went in and reorganized/remodeled/reconstructed sub Agencies and programs, so I knew how things operated. My wife on the other hand was an executive for a large multi-national. It was amazing to hear her stories on the waste and ineptness there. Beyond that though, being that I was in management and held a BBA from undergraduate work, I have always kept myself well-informed on business matters. when you speak of business efficiency you are talking mythology rather than reality.
2. Taxes are bad as is government:
Our tax system at presents rewards investment and inheritance at the same time it punishes the middle class and the rest on the lower end of the tax scale. It is true, as I previously stated, that in the last century and today the times of greatest American economic growth coincided with the times when the tax rates on the wealthy were highest.
3.”I think the idle rich are full of the stuff that comes out of the south end of a north bound mule and dont disagree with your assesment on that score.”
What you don’t realize is that the CEO’s of most of our largest Corporations and their minions are also like the idle
rich. People bitch when a ballplayer makes $25 million a year for being in the top thousandth of a percent in the world for his skill. Yet until this latest financial disaster most people were uninterested in the fact that some CEO was pulling down $100 million a year, by firing workers, lowering benefits and then destroying the future viability of his corporation. These guys normally aren’t even in the class of being in the top 20% of executives. They fly in private jets, do business on the golf course and at long lunches and dinners in the most expensive restaurants. They too are the “idle rich” and we should tax the hell out of them.
4.”Reagan did some good things”
Ronald Reagan was a figurehead. He was a wholly owned subsidiary of GE and other defense contractors. This is not speculation it is fact. GE literally supported him for many years after his movie career dried up. He was responsible for the greatest rise of taxes in history to pay for a defense budget that was geared to making money for his backers. He sold missiles to the Irani’s and probably worked a deal to prolong the hostage crisis until he was elected. He didn’t bring down the Russians Mikael Gorbachev and the
inability to keep out Western news did. All of our major intelligence organizations knew the Russians were financially collapsing, but the news was kept quiet from the public to keep the defense money flowing. I could go on and on about this clown of a man who was too stupid and later too addled to actually know what a farce he was.
5.”I know it is hard for people on the left to think about the possibility of an alternative to big government, but it is out there. And John Locke and Edmund Burke would probably like it because it sets man free from the tyranny and oppresion caused by big government.”
Locke and Burke were no doubt wise men but Locke died 300 years ago and Burke 200 years ago. The world they wrote about was dominated by Monarchies and had not yet established a viable market system, money system or even undergone the industrial revolution. Burke, died in 1797 was horrified by the French Revolution and felt the American Revolution was a somewhat misguided act by Englishmen, though with some justification. In the era which these two lived the concept of a Republic was really too far out. Neither of these mens’ comments on government can be taken out of context as some conservatives like to do.
The problem is that you really don’t understand what you think of as “people on the Left.” The liberal/conservative model no longer is a valid one. I personally am a pragmatist when it comes to how to solve problems. My interest is in a world that my children and grandchildren can live in and prosper. I believe that every human being has the right to the basics of food, shelter, health care and education. I believe in Free Speech, rather than freedom to purchase. I believe in civil rights in all its’ many forms. I believe in the complete separation of church and state. Finally, I believe that all of humanity needs to evolve and grow into a world of peace and freedom.
You may think that I’m just another “namby-pamby” liberal, but trust me I’m as smart and tough as anybody from the so-called right and I have the life to prove it. The difference is that I have lived my life believing in and trying to emulate Rabbi Hillel’s (and Jesus’) formulations:
“That which is hateful to you, do not do to your fellow. That is the whole Torah; the rest is the explanation; go and learn.”
“If I am not for myself, who will be for me? And when I am for myself, what am ‘I’?”
hidflect:
I clean toilets at night so I have all day to post pro capitalist musings.
If you want a job send me your resume and maybe I can find a bowl for you to fill.
Don’t you have a job, IS? Cleaning toilets or something? You seem to have far too much time to post your cr@p online.
IS: writes: GMOM:
its my money, its not the governments money, end of story. We are being raped by big government.
what a picturesque response.
again, as I asked before, what parts of government would you like to eliminate ?
Mr. Mike:
you are wrong on all counts, I want everyone to have less taxes so they have more to put in their pockets. The money is theirs, they earned it. It dosent belong to me or you or puzzling or GMOM.
I wish I would have met your dad, he sounds like a good guy and tough too.
I think the idle rich are full of the stuff that comes out of the south end of a north bound mule and dont disagree with your assesment on that score.
GMOM:
its my money, its not the governments money, end of story. We are being raped by big government.
IS and Puzzling,
Yes, yes I get that the government played it’s part, I never said that it didn’t. Taking the labels out of what you’re saying: A and B conspired to take advantage of C. Therefore we need to restrict A’s power over C. I agree. My question is still, what about B? Believe it or not, being anti-corporation does not mean you’re pro-government (See Thomas Jefferson).
Also, if the company only sells cars in China, then it should probably move to China to produce them. It would avoid all sorts of tariff’s and other costs that way. Do most companies that move production (or call centers for that matter) overseas suddenly stop selling in the U.S.?
Mike S writes: Author: Mike Spindell
Comment:
Puzzling,
When you blame government for these wrongs there is some modicum of truth. However, when government is controlled by corporate interests, that manage to tweak the system for their benefit, it is not government per se to blame. The blame falls on our political setup that allows politicians to be bought, or need to be bought, to attain office. If we take government completely out of the equation, this same corporate elite will only have more control of our lives. If we could trust the Corporatists to behave in a rational manner, perhaps the dreams of libertarians everywhere could be realized. The problem is that human beings being what they are, the drive towards power, fueled by greed that compels people to reach the top, also keeps them seeking greater power continually. It also makes them jealous of their perogatives and so desirous of keeping the masses in a subservient position.
what we allowed was a system where the corporations that should have been supervised by independent agencies but were instead supervised by agencies on their own payrolls. AIG, for instance, was an insurance conglomerate that bought a bank. the bank represented about 1% of its total financial stake but because they had a bank they turned all regulation to this one agency that manages thrifts and S & L’s. That agency,whose name I can’t recall just now…. wait for it… was paid by AIG.
see how the money goes from one pocket to the other? then other investment banks that didn’t like the rating they were getting and paying for, from say Moody’s threatened to take their business across the street to someone else, say, to Standard & Poor to get AAA instead of AA and it gets even worse. The banks are not allowed to carry bonds that have less than a certain rating. so if they lose their rating the banks are legally required to sell their banks. Suddenly everyone is selling, no one is buying. all this was reported on NPR over the past weekend.
Indentured wrote: why is it the left goes apoplectic over some tax cuts and free enterprise? Also name calling, the left loves to do that. Don’t have an argument start name calling. Next I will be called a racist or worse. I have read a lot of these posts too and that is usually how it goes, don’t like someones argument start calling them names. Its very predictable, almost formulaic.
me: apoplectic? over tax cuts? hardly. if we are going to cut taxes then lets do it fairly and reasonably. lets cut taxes on the middle class. lets cut taxes on the working poor. ok. now that we’ve done that how are we going to pay for government institutions that the right supports like the military? lets say we cut NASA or the FAA.
IS:As far as HMO’s are concerned I believe the jackal of the senate Edward Kennedy created those.
Me: you’d be wrong. the first HMO’s were all doctor owned following the invention of Kaiser Permanente. Ted kennedy had nothing to do with that.
IS And you assume I am pro Bush and pro Reagan without even knowing.
Me: well are you?
IS: Reagan did some good things and Bush did go after the Taliban after 9/11. But Bush turned out to be a pretty bad president on the whole. And Reagan could have been better on a number of issues.
me: what did reagan do that was good? name three things. as for bush going after the Taliban, he did a great job there.
IS: I love the left, the only choice they want is green. Want an SUV cant have one, nuclear power nope, fatty foods no way. School vouchers definitely not, the teachers unions might actually have to perform.
me: I love the left also. I love the left because we champion causes that affect people’s lives in positive ways. want an SUV? fine by me. Spend a bit more and get a hybrid Lexus. You will love yours. I adore mine. Want to live next to Three Mile Island? call me when you buy a home there. fatty foods? sure thing. get as big and fat and disgusting as you can if you want. have a heart attack. better still have three or four. and don’t worry about who will pay for it. Hell I am all for fatty foods. but all things in moderation. moderation. as for school vouchers… they have zero to do with teacher performance in public schools. they are about funding the christian right’s access to have the government, yes say it along with me, the government pay for their kids to get free or subsidized educations in religious schools. expensive ones. some secular ones too. but mainly vouchers came alone around the exact same time that the christian right began complaining that the left didn’t want prayer in public schools and evolution and sex ed out of them and their only option was to pray silently, or around the flag pole before classes or opt out of certain classes or be home schooled or go….. wait for it… here it comes… to expensive parochial schools that the parents could not possibly afford for all 7 kids.
next?
One of the most fundamental freedom is that of being able to buy what you want, when you want and that is what the left wants to deny us all the chance to do and that is not freedom.
IS,
You’ve said it, but unfortunately I’m on a library PC that doesn’t allow me to cut and paste. What you’ve said in effect though if I may interpolate is that most business failure occur from lack of capitalization or
knowledge. I would suggest to you that the main reason is the lack of adequate funding. This indeed is where the problem lies and where your analysis breaks down. Not many people are in a position to garner sufficient capital to establish a viable business.
My father failed in 5 businesses that he established and yet he was intelligent, charismatic and well experienced in his fields of endeavor. In each instance his lack of capital proved ruinous. Your view of things is probably that “that’s how the cookie crumbles,” while my view is that the system is set up to reward those who already have a leg up. For every “American Dream” success story, there are literally tens of thousands of failures.
I’m not saying that people aren’t entitled to the fruits of their success, but what I am saying is that given an unequal playing field, there should exist a viable safety net for the 85% of the people who are not able to make it.
As far as your repeated points about taxation, arguably the greatest financial growth periods in the 20th century occurred during the era of highest taxation of the wealthy. the reason is simple: The masses aren’t being used to prop up the country with their limited funds and consequently they have the extra cash to spend and pump up the economy. This is a fact which you can easily discover, should you wish, but I think you are
realy enamored with your current world view and are loath to question it.
I’ve no doubt you live in a neighborhood where $75 for a
lawn is normal. however, the point I’m making is that therein lies your inability to understand the plight of some hard worker, who did all the right things, but finds themselves out of work because their company was bought up and dismantled by predatory financiers.
As examples i would point out to you Donald Trump. The man who inherited a real estate empire in the beginning of the bubble in Manhattan real estate, made a fortune and then proceeded to go bankrupt in the gambling business because of his own incompetence. This clown though presents himself as a business genius and has books ghost written for him telling people how to make money and a TV show to extol his management style. He is a legend in his own mind. Many, many people who have benefited by virtue of birth, or by being at the right schools have networked themselves to success and believe it is because of their own skills. They then decry as weak those born without their benefits and exhort them to just try harder.
In many ways I’ve been lucky in my life and I certainly was successful in my chosen field. However, I was given a great brain through genetics and was in my younger days tall and handsome. Although I inherited nothing and was orphaned as a teenager, this gifts of genetics helped me succeed, but I’ve never lost sight of the fact that it was all luck of the draw. That is why I can empathize with those who weren’t as lucky and understand that as a society we owe it to them to at least be protected from disaster. You disagree I take it and that is a shame, because i bet that otherwise you’re probably a decent person.
Puzzling,
When you blame government for these wrongs there is some modicum of truth. However, when government is controlled by corporate interests, that manage to tweak the system for their benefit, it is not government per se to blame. The blame falls on our political setup that allows politicians to be bought, or need to be bought, to attain office. If we take government completely out of the equation, this same corporate elite will only have more control of our lives. If we could trust the Corporatists to behave in a rational manner, perhaps the dreams of libertarians everywhere could be realized. The problem is that human beings being what they are, the drive towards power, fueled by greed that compels people to reach the top, also keeps them seeking greater power continually. It also makes them jealous of their perogatives and so desirous of keeping the masses in a subservient position.
Government can be a force for good or ill, but it does offer the possibility of redress of the majority of people’s grievances. The kind of “free market” many people idealistically envision, in the end will come to
monopoly and a rigid class system such as feudalism.
GMOM:
why is it the left goes apoplectic over some tax cuts and free enterprise? Also name calling, the left loves to do that. Don’t have an argument start name calling. Next I will be called a racist or worse. I have read a lot of these posts too and that is usually how it goes, don’t like someones argument start calling them names. Its very predictable, almost formulaic.
As far as HMO’s are concerned I believe the jackal of the senate Edward Kennedy created those.
And you assume I am pro Bush and pro Reagan without even knowing. Reagan did some good things and Bush did go after the Taliban after 9/11. But Bush turned out to be a pretty bad president on the whole. And Reagan could have been better on a number of issues.
I love the left, the only choice they want is green. Want an SUV cant have one, nuclear power nope, fatty foods no way. School vouchers definitely not, the teachers unions might actually have to perform.
One of the most fundamental freedom is that of being able to buy what you want, when you want and that is what the left wants to deny us all the chance to do and that is not freedom.
IS writes go reread first off.
thirdly the private sector can do all those fucntions for less money and probably more efficiently than can the public sector. There are many alternatives to big government. I know it is hard for people on the left to think about the possibility of an alternative to big government, but it is out there. And John Locke and Edmund Burke would probably like it because it sets man free from the tyranny and oppresion caused by big government.
Me: Reread? You are generally incomprehensible unless telling people off and/or spouting Glenn Beck nonsense. I did read your post directed to me. I read all of your posts and most parts of this blog every day. It is my only joy. Still, sometimes, and with you it is fairly often, I have no idea what part of neocon fantasyland it is that you adore so much.
are you really saying you want to give police and fire protection over to the private sector? like the military gave huge chunks to KBR who built sinks where the water actually electrocutes soldiers? or who has billed the government (you and I ) for a dining hall it built a year ago, remodeled 6 months ago and is billing for a second remodel. You mean like that?
or do you mean the private health insurance industry that did away with the single payer system of the 50’s and 60’s with its doctor and then insurance company owned HMO’s ? you mean like that? where most doctors I know are working now in private practice and refusing to take insurance at all? And employer sponsored benefits are being transfered in larger and larger percentages to the employees who are not being paid more to get their premiums paid and in many cases are opting out of the insurance system to use their default medical care facility…. the local emergency room? you mean like that private sector?
Why I’ll just bet you like to sit around the fire on cold winter evenings and on the back porch in the summer feeling all mushy and nostalgic for the good old days with Ronald Reagan, the most recent man to be anointed into sainthood by the right.
he was great, wasn’t he? especially when he raised taxes as CA governor and president and pumped money into the military like a body builder on roids. I especially liked his refusal to say the word :AIDS: let alone fund research. I also really liked he way he totally ignored the huge losses of rustbelt jobs causing a tidal wave of homelessness in this country that went unmatched until BushCo came along. His refusal to improve VA benefits, or failing public schools was neat also. But Nancy did look good in her red suits, with her new white house china, like a bobble head on a stick. and don’t get excited about this, but if she could have a kid tomorrow and use its parts to bring Ronnie back to life she would. She’d have conceived, aborted and used fetal brains whizzed around in her cook’s blender if she thought it would cure his Alzheimers and there is something really noble and sweet about that kind of love and I am not being sarcastic about that one part because I know what that kind of love is about.
freedom from tyranny? if you really want to talk about that lets talk about it. but you are going to have to get way more serious.