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Originally posted by zeeblebotDo you have a plan to change tax law so that only Oil Exectutives will feel the pain?
i'd go for the executives. is it really necessary for
corporations to shell out jillion-dollar bonuses to attract competent help, especially when the help isn't punished for screwups?
No other employees, no stockholders, and no customers?
Also, do other people feel that professional athletes are paid too much? Shaquille O'Neal makes $32 million a year. Seems like he
would play basketball for half that. After all, what else would he
do, work for Exxon?
Originally posted by zeeblebotI hesitate to even get into this because I initially was just commenting that changing tax laws for domestic oil producers will hurt employees, stock holders, and customers. The "Articles of Incorporation" are just legal words on a paper and they will not be hurt in the least bit no matter what happens to the company.
they are supposed to be earning value for the stockholders. not moving nominal headquarters to the Bahamas, diluting the stock, bankrupting the company, and earning top salaries and bonuses all the while, pass or fail.
While we could squabble about details, likely we'll agree that many CEO's have been greedy and overpaid. The problem comes in making laws. You can't make laws like this:
CEO's that are greedy should make less money
What if some ordinary guy grows up poor, works very hard and builds a company that one day becomes publically traded? We like to say we're a free country, but I personally don't feel good that some politician that couldn't even run a lemonade stand comes along and caps the guys salary all becaused he's deemed to be "greedy" by current public sentiment.
Personally, I'm a lot more afraid of giving politicians more power than I am of CEOs making more money.
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Originally posted by zeeblebotI am not sure what you mean by that.
the corporate veil is too strong. they don't HAVE to provide any value to shareholders.
You don't HAVE to buy stock in a company and you don't HAVE to work for them.
But if the government wants to use tax money to bail out failed businesses, you HAVE to pay up. And if the government wants to spend taxpayer money to pay some one to create elephant dung art, you HAVE to pay up for that too.
Also, up until recently, corporations generally had to make a profit over the long term, which means they had to produce something someone would buy willingly. A corporation can operate at a loss for a while, but eventually cash runs out. Unfortunely now the government will prop up failed corporations (especially those with strong unions, and hence large campaign contributions) indefinitely.
The government has never had to make a profit. They can take as much money as they want from us and they can inflate the currency by printing more (devaluing the money private citizens hold).
Originally posted by zeeblebotSo you are saying that as long as you have Articles of Incorporation, money to pay executives always materializes regardless of whether you produce a product people will buy.
cash runs out, but the corporation can reorganize, shed its shareholders, and keep the executives. no penalty, except to the creditors and shareholders. and to future ability to attract equity.
Perhaps I could start one of these corporations. It only costs a few hundred dollars in my state. I would declare myself CEO. Then I could start flying to conferences around the country and paying myself 7 figures with the money that would materialize.
Originally posted by techsouthHe's saying that as long as companies don't go bankrupt, CEOs can give themselves whatever they want.
So you are saying that as long as you have Articles of Incorporation, money to pay executives always materializes regardless of whether you produce a product people will buy.
Perhaps I could start one of these corporations. It only costs a few hundred dollars in my state. I would declare myself CEO. Then I could start flying to conferences around the country and paying myself 7 figures with the money that would materialize.
And your hypothetical company is not so absurd; many people do this. It's called bankrupcy fraud.
Originally posted by KazetNagorraWith all due respect, that is not what the gentleman is saying. Perhaps that is what you'd like to say, but that's a different conversation.
He's saying that as long as companies don't go bankrupt, CEOs can give themselves whatever they want.
And your hypothetical company is not so absurd; many people do this. It's called bankrupcy fraud.
As a matter of fact, he specifically mentioned exectutives that bankrupt their companies without punishment. And, CEOs cannot do whatever they want. The sooner we agree on that, the sooner we can agree on the things CEOs can do that we don't like.
As far as bankruptcy fraud, the cool thing about freedom is I don't have to invest in nor loan money to suspect entrepenuers. Only when the government steps in am I forced to be on the hook.
The worst bankruptcy fraud I know about is the government using its power to take tax dollars and throw this money at GM and Chyrsler in spite of their aweful business strategy (in some ways the result of union demands). Prior to now, I was luck/smart enough to not own GM stock, but the government has decided I'm going to lose anyway.
I haven't bought a new car since 1992. In that time I've seen probably 5000 new car commercials on TV. Some of them were good and had some appeal. But I've always had the the choice to spend money on a new car, or keep my money. Until now. Lately the government has decided that since we're not buying enough new cars, they'll take money from us (sending us to jail if we don't pay) and give it to the car companies. I blame the government for that, not the car companies.
Originally posted by techsouthBankrupcy fraud does not only affect investors. Bank loans fold, and banks increase their interest rates for compensation.
With all due respect, that is not what the gentleman is saying. Perhaps that is what you'd like to say, but that's a different conversation.
As a matter of fact, he specifically mentioned exectutives that [b]bankrupt their companies without punishment. And, CEOs cannot do whatever they want. The sooner we agree on that, the sooner we can agree ...[text shortened]... ive it to the car companies. I blame the government for that, not the car companies.[/b]
One problem is that some businesses become so large that they become "too big to fail" -- if such a business, like AIG, is simply allowed to go bankrupt, it can drag a lot of other businesses down with it, create mass panic on the stock and bond markets, and ultimately cause an economic cataclysm.
This is why we have these bailouts.
The problem with bailouts is that tax dollars are now being spent - and it can be very frustrating when things don't seem to improve after the bailout - or if the CEOs decide to spend that money on superfluous things like pahtridge hunts in England. And there's a moral hazard when these companies know they're "too big to fail" and can take all sorts of wild risks knowing that Uncle Sam will catch them if they fall.
So --- the government must either make sure no business ever gets large enough or powerful enough to become "too big to fail" -- or the government needs to closely regulate such businesses to ensure that they're not taking excessive amounts of risk -- or we must resolve to allow even the biggest businesses to fail and accept all of the consequences, no matter how severe.
another problem is that CEOs can make absurd amounts of money while they run their company into bankruptcy, and when it's all done, they still have their money pile.
it's a lot like when your favorite sports team signs some superhero to a contract paying him a gazillion dollars per year for the next half century -- and then he plays like crap and the team and it's fans are stuck with his contract.
unfortunately -- in both these cases, it's "buyer beware" -- boards and teams need to be very wise about what CEOs or superstars they give the big contract to. But usually, these people have strong resumes and many other companies/teams are bidding for their services as well - and a strong CEO like a strong player can be the difference between winning and pretending
Originally posted by MelanerpesBailouts are an extremely inconsistent policy. If governments argue that companies are "too big to fall" then they either shouldn't have authorized the mergers that created these companies or nationalized them in the first place.
One problem is that some businesses become so large that they become "too big to fail" -- if such a business, like AIG, is simply allowed to go bankrupt, it can drag a lot of other businesses down with it, create mass panic on the stock and bond markets, and ultimately cause an economic cataclysm.
This is why we have these bailouts.
The problem wit ...[text shortened]... e biggest businesses to fail and accept all of the consequences, no matter how severe.
Originally posted by MelanerpesThese are all good points and illustrate that capitalism has flaws.
another problem is that CEOs can make absurd amounts of money while they run their company into bankruptcy, and when it's all done, they still have their money pile.
it's a lot like when your favorite sports team signs some superhero to a contract paying him a gazillion dollars per year for the next half century -- and then he plays like crap and the t ...[text shortened]... and a strong CEO like a strong player can be the difference between winning and pretending
What I find ironic though is that some say in essense the following:
Corporations have too much power and that creates problems in our lives. Therefore, lets give our government complete and abosulte power so that we don't have to deal with the reprecussions of there being an entity with too much power.
Members of congress that complain that corporations have too much power are like lions complaining that kittens have too much power. Rich corporations that might get fed up and donate money to opposing politicians are about the only realistic check that the congress and president have to unlimited power.
Originally posted by techsouthI just woder if and when government goes bankrupt if the corporations will come bail them out. I'm thinking no.
These are all good points and illustrate that capitalism has flaws.
What I find ironic though is that some say in essense the following:
[i]Corporations have too much power and that creates problems in our lives. Therefore, lets give our government complete and abosulte power so that we don't have to deal with the reprecussions of there being an ent ...[text shortened]... ans are about the only realistic check that the congress and president have to unlimited power.