Merrill Lynch's CEO Loses $8 Billion...

[chibnkr]

Originally Posted by jcarlton

I'm not saying the BOD has no responsibility, they do, but they didn't get a bonus with their walking papers. If I can get my foot out of the way to ask; what is the responsibility of the CEO if it's not to run a profitable business?

That is precisely his primary responsibility. The point that I'm making is that it is the Board's responsibility to structure a compensation package that properly aligns the CEOs goals with those of the company's shareholders. One can't blame the CEO for what he gets paid, one can only blame the board of directors.

[Steeleagle]

In order to get a qualified person to take such a demanding job, you must offer an attractive compensation package. he took some chances that paid off and some that did not. Much like almost everything else, people will judge him with 20/20 hindsight. Most companies did not bank on the subprime meltdown. This is similar to the dotbomb crash a few years back.

The CEOs get paid like this beacuse there are not many people in this world that can or want to run a large organization.


The "good old days" of the 1950s NEVER, EVER existed. these things happened them, but you never heard about them beacuse there was no Internet, Blogs, cable etc.

[jcarlton]

Originally Posted by chibnkr

That is precisely his primary responsibility. The point that I'm making is that it is the Board's responsibility to structure a compensation package that properly aligns the CEOs goals with those of the company's shareholders. One can't blame the CEO for what he gets paid, one can only blame the board of directors.

I agree with you completely on the point of blame for compensation, and further think standards should be adopted for BOD's to follow outlining pay for performance standards that could control the money giveaways while companies and stockholders hemorrhage cash. I think that it should be industry driven standards leading the way and not laws managed by our dysfunctional government.

[Drazzil]

This man did nothing but play cost-cutter and get rid of a lot of the "fat" that Merill Lynch was carrying to make it more "market competitive". Its unfortunate that the capitalist system is built to increasingly exploit the American worker, but lets face it.

Before you point the finger at the average CEO running the a multinational company as being responsible, read a bit of history. Read up on the NAFTA, Globalization, So called "Free Trade", Wal-Mart and the marginalization of the American in the next economy. Read "Credit Card Nation", "Maxed Out", "Nickeled and Dimed", "Brand Name Bullies" and any of Noam Chomsky's work and read every economic journal out there.

Within a few weeks a very bleak picture will begin to emerge. A picture of a "Military Industural Complex" gone amok. Back in the fifties Eisenhower warned us that given enough time and lack of oversight, the "Military Industural Complex" would threaten democracy itself. It has always needed a boogeyman to justify its existance. First it was the Communists, and Russia and the Cold War, and now its the terrorists.

Since Nixon was elected in the Eighties corporations profits have rose exponentially while "real" wages, wages tied to the inflation index have fallen almost seventy percent. In 1970 the average american worker made over sixty dollars an hour ((in todays terms)) in a manufacturing job,counting benefits. Today its something like fourteen dollars an hour, and no benefits.

We are told, time and time again that globalization is a good thing, that it means more money and profits and a higher standard of living for everyone. This is wrong. Globalization is a bad thing as it is. All it really does is allows companies to move abroad, to offsource, outshore and pack up their bags and leave for some third world country with little standard of living and even less respect for human rights. Unregulated globalism is nothing more then the total antithesis of everything the United States should stand for.

We are told that affordable healthcare is untenable. It is untenable only because hospitals charge obscene amounts, and the pharma companies are making profits in the hundreds of billions of dollars. Healthcare lobbiests drive the politicians to extend patents on drugs, drive them to make laws to make DNA patentable, and the healthcare insurance industry raises the rates on healthcare as much as 20% a year... and refuses to insure everyone but the most healthy.

On the domestic front our educational system is failing. We are going from a nation of scientists and engineers to a nation that packs grocery bags, pitches cars and asks "would you like fries with that?" Educational funding is drying up at the higher levels, as the cost of higher education triples every ten years.

As a nation, we are working harder, spending less time with our families and driving GDP to an all time high, and yet the last two economic booms werent even felt by 95% of those in the workforce. The average standard of living did not rise. CNN and the Wall Street Journal and all the other news corporations declared that we had entered an "age of prosperity" and yet, we as an average american worker, didn't see a dime. Why is this?

As Americans, our whole way of life is under threat. We are under siege and we are made to believe that the problems of healthcare, social security, medicare and a slipping standard of living are "too complex" to fix. Politicans pay lip service to how they "feel our pain" to be elected but then its business as usual in capital hill. These mouthpieces dont rock the boat. Our very electorial system is nothing more then a sham. We dont see a canidate take the national stage unless he has been bought, sold and paid for by the lobbiests. These canidates know who paid for them to get into office, so they dont do anything radical, and the rot continues.

We are involved in a highly expensive, miserably planned and poorly executed war overseas. This war is funded not with our taxes but with American dollars, bought by countries that are terrified of what may happen if they stop buying our dollars. These countries already own trillions of dollars of US debt that will become worthless if they do not buy. The current administration hands out multibillion dollar no bid contracts to companies that they themselves have vested intrests in. Gasoline prices are at a record high, not entirely because of scaricity, but because the multinational monopolies that run the refineries do not increase capacity, and routinely take refineries offline to extort record profits out of a captive consumer who is forced to commute to far flung areas just to get to work.

The bottom line is that we spend more then we make. We as Americans have been supporting our standard of living on credit cards, and then paying off the credit cards with lines of credit on our very homes itself. The very system will be its undoing. What these multinational corporations dont realize is that America is still the engine that drives the world economy. You cannot ship jobs overseas, and ship goods back and expect Americans to buy what they can no longer afford on credit forever. It is untenable.

Why arent we as Americans angry yet? Perhaps it is because most Americans have been raised to accept this, and as long as we accept it, those who exploit will continue to take advantage of our political nievity. We face now a "collapse" as real as the Soviets faced in the early ninties, not because we are communist, but because we allow those who are in power to continue to take and take until there is nothing left to drive the economy at home. I have been predicting the "housing crisis" for two years now. It is there because Americans are deeply in debt, and willing to put their homes on the line to maintain their standard of living, because mortage loan companies are willing to offer exploitative ARM's with nice looking rates up front. This recession we are now in will extend into a depression when the banks collapse in a domino effect when they realize that they cant get $100,000 for the house that they financed to the tune of $450,000. It will be made worse when countries switch their standard from the dollar to the Yen, the Euro of the Chinese dong.
The pain hasent even started yet, and we, as Americans are largely to blame.

[chibnkr]

Well, I can see that someone clearly isn't a Chicago School guy like myself! LOL! Interesting points, but I just don't have the will to comment on them...too much work to do this week.

[Drazzil]

Originally Posted by chibnkr

Well, I can see that someone clearly isn't a Chicago School guy like myself! LOL! Interesting points, but I just don't have the will to comment on them...too much work to do this week.

I never really suscribed to a "school" of economic thought. I do believe in the capitalist system. I believe that it needs a lot more checks and balances then it has now, not in a controlled economy sense, but in a government rules to step in and "protect the worker" sense.

I believe that education is the magic bullet that can defeat just about all of the worlds ills. The capitalist system works best when everyone is "plugged in" as it were. People can only change the world if they are "plugged in" and see gain in participating... The more educated you are, the more you contribute. Participating in the economic system should mean the individual recieves a fair days wage for a fair days work, when the worker doesent have to worry about working three jobs to cover an apartment, family and food. A system in which people are forced to do this is really no better then the feudalist system of old where serfs scraped along under the lords benovalent eye.

Someone forced to work two or three full time jobs to make ends meet normally doesen't have room for betterment, college education, family or anything else but work or sleep. And yet this is how things are going now, people are being forced to work longer for less and have less then they ever had before, less for themselves, less for their families and less to pass along to their kids.

If this system isint checked, our country, the United States of America will become little better then most of South America. A small minority of terrified super-elite surrounded by walls, armed guards and barbed wire in a vast sea of poverty and decay. This sort of system is little better then the soviet systems of old where all the shots were called by the corrupt party apparacheiks.

The average american is increasingly being marginalized in todays economic world. Marginalized people dont contribute to the economy in a full capacity, and this is bad when the people being marginalized are the very people expected to drive the world economy. The system we have now is very anti democracy, it seeks to do business with the same countries we should be either bombing the hell out of because of ties to terrorist countries or sactioning the hell out of because they are abusing their populace.