Monday, January 4, 2010
Wednesday, March 4, 2009
Well if you can’t beat’em, join them. The issuing of big bonuses in the face of not being able to afford them is not always a bad idea. Here is the plan in a nutshell:
Essentially, America’s decisions, material or not, are being made in Washington by persons who are susceptible to lobbying. Those lobbyists create incentives for Senators and Representatives to vote according to the narrow agenda set by those who the lobbyists represent rather than for the good of America as a whole. Over the past decades or longer, the American people have suffered greatly and now America is financially crippled. For example, how did unregulated Credit Default Swaps become acceptable in the minds of the public stewards in Washington? Notwithstanding how or why, the reason we are here today is that we do not pay our Congress people near enough.
No lobbying firm, however, can match the power of the US Treasury. The people should demand that Congress be put on a very simple bonus plan. Every Congress person who serves during a legislative session which actually passes a budget that cuts spending 10% or more from the prior year should be eligible for a $5 million dollar bonus, payable immediately after the budget is passed. We spend less than $2 billion dollars in bonuses to ensure we cut spending hundreds of billions of dollars. Those unspent billions can then be used to pay down the national debt while the people who voted to reduce America’s spending are handsomely rewarded.
Year over year hundreds of billions will go to pay down the national debt. America could amortize anything with that kind of payment each year. Also, with this new incentive plan, the most talented people will run for office. Finally, the lobbyists would have to work harder and harder for less and less of the budget pie. It is all good.
If the greed of recent day demonstrates anything, it demonstrates that this plan is infallible. Let's get America going again by issuing these giant bonuses. We can thank the bankers later.
Thursday, November 20, 2008
Today is my first post. I dedicate this blog to my three angels from God. Their grace, spirit and innocence uplifts my heart each day. Everyday I drop them off at school, I tell them two things: "Daddy loves you" and "Be good and do good." If they Know the first, and practice the second, they can change the world. As I go forth into this new world of blogging, I take with me my old world -- where I have learned much.
The Hidden Lesson
For all the irony of the Big 3 CEO's traveling in private aircraft to beg for money, there is a lesson buried in current events. Much the same way that voter apathy will destroy the United States, shareholder apathy and disenfranchisement is killing capitalism.
The United States Constitution vests the power of the government ultimately in its citizens. The United States and capitalism must confront the stark reality that publicly traded companies, while bestowing power in its shareholders, will be destroyed by apathetic shareholders. Shareholder apathy only encourages the proliferation of CEOs which fly on private jets to justify their mismanagement and ask for a bailout.
With shareholder apathy comes the loss of corporate governance. The loss of corporate governance delivers boards of directors and officers who can then perpetuate their own selfish agendas. Without shareholders holding directors accountable, directors do not tend to hold management accountable. When that happens, who will run the company for the benefit of the owners?
Rather, when the CEO knows there is no one to which he is accountable, a CEO will push as much profit to himself during his three to five year management life cycle as he can instead of running the company as he is supposed to for the benefit of the Company's owners. When a board of directors goes along with that agenda, the coup is complete.
So, that which should be profit is diverted as wages, bonuses and corporate largess. Does anyone doubt that private jets are not inextricably linked to golf memberships and vacations? To fix this corporate tragedy, the companies will have to file bankruptcy, unless Congress bails them out. The cornerstone of a bankruptcy is that all shares are cancelled. The cornerstone of a bailout is that all shares will likely be cancelled in the future and are worthless now.
Maybe we will in the future participate more in our political and economic communities given the loss of so much hard-earned wealth.
Want to start fixing and protecting America for the next generation, then exercise your right to vote -- again and again. Want to fix and protect your current and future wealth, then exercise your right to vote -- again and again.
That is the hidden lesson.