My New Monthly Economics Thread: Regulation Causes Catastrophe

[stateofsingularity]

Rex,

Been a while, bro.

Thanks for starting this thread. Expect regular contributions from my end. Trust me, when I say that it's nice to hear another voice cry out in favor of reason and liberty.

 

[frank 7he t4nk]

Thanks!

 

[frank 7he t4nk]

Thanks!

 

[noskey]

tl;dr






Just kidding. Posting for morning. You know I always enjoy your threads

 

[noskey]

tl;dr






Just kidding. Posting for morning. You know I always enjoy your threads

 

[Betonblck]

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

 

[Betonblck]

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

 

[roc4life24]

very good read. do it every week or bi-weekly if possible.

what are some good news/financial/economic blogs out there i may be missing?

 

[roc4life24]

very good read. do it every week or bi-weekly if possible.

what are some good news/financial/economic blogs out there i may be missing?

 

[wawaweewa]

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

The Chinese get it. If only they're afraid of unrest in the citizenry. Your government sees you as a schmuck who is of no danger to them..

[h1] China Executes Corrupt Trader Yam Yanming; $9.5 Million Missing[/h1]
One of these in the US and I guarantee you things will magically start to improve.

[h1]
http://www.huffingtonpost.com/2009/12/08/china-executes-corrupt-tr_n_384809.html[/h1]

 

[wawaweewa]

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

The Chinese get it. If only they're afraid of unrest in the citizenry. Your government sees you as a schmuck who is of no danger to them..

[h1] China Executes Corrupt Trader Yam Yanming; $9.5 Million Missing[/h1]
One of these in the US and I guarantee you things will magically start to improve.

[h1]
http://www.huffingtonpost.com/2009/12/08/china-executes-corrupt-tr_n_384809.html[/h1]

 

[Betonblck]

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

 

[Betonblck]

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

 

[stateofsingularity]

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

 

[stateofsingularity]

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

 

[wawaweewa]

Originally Posted by stateofsingularity

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

What reservation?

Let me understand this. If I murder 1 person I have ruined his life and that of his family and friends. In essence those who either depended on him or otherwise were impacted in a positive way as a result of his being alive. How many people would this encompass for the average person?

On the other hand, even if I was managing a sub 100 employee company and decided to loot its accounts and drive the Corp into insolvency, how many people have I affected then? Surely it's a multiple of my 100 employees.

Either way, I don't believe that capital punishment is any more of a deterrence than a life sentence.  Life sentences (in a non club med prison) would be fine by me.
However, the " punishment must fit the crime argument" in this case is a load of *#@#@!@!.

 

[wawaweewa]

Originally Posted by stateofsingularity

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

What reservation?

Let me understand this. If I murder 1 person I have ruined his life and that of his family and friends. In essence those who either depended on him or otherwise were impacted in a positive way as a result of his being alive. How many people would this encompass for the average person?

On the other hand, even if I was managing a sub 100 employee company and decided to loot its accounts and drive the Corp into insolvency, how many people have I affected then? Surely it's a multiple of my 100 employees.

Either way, I don't believe that capital punishment is any more of a deterrence than a life sentence.  Life sentences (in a non club med prison) would be fine by me.
However, the " punishment must fit the crime argument" in this case is a load of *#@#@!@!.

 

[cruthik3]

Didn't read this yet, but is a Rico case possible with all these politicians? From Bush to BP to OBama to especially Bernanke and Geithner? Rex how soft is the financial reform bill, what a joke. What's your opinion on HFT with the algos selling to eachother?

Will read later.

 

[cruthik3]

Didn't read this yet, but is a Rico case possible with all these politicians? From Bush to BP to OBama to especially Bernanke and Geithner? Rex how soft is the financial reform bill, what a joke. What's your opinion on HFT with the algos selling to eachother?

Will read later.

 

[stateofsingularity]

Originally Posted by wawaweewa

Originally Posted by stateofsingularity

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

What reservation?

Let me understand this. If I murder 1 person I have ruined his life and that of his family and friends. In essence those who either depended on him or otherwise were impacted in a positive way as a result of his being alive. How many people would this encompass for the average person?

On the other hand, even if I was managing a sub 100 employee company and decided to loot its accounts and drive the Corp into insolvency, how many people have I affected then? Surely it's a multiple of my 100 employees.

Either way, I don't believe that capital punishment is any more of a deterrence than a life sentence.  Life sentences (in a non club med prison) would be fine by me.
However, the " punishment must fit the crime argument" in this case is a load of *#@#@!@!.

Lame analogy.

Violent crimes and white collar crimes are nothing alike. Depriving someone of the right to life (unjustly) is not the same as ruining a business. One is reversible. The other is permanent.

According to your argument, the number of victims should determine the severity of the punishment.  Am I to understand that a hacker who impacts hundreds of people should be put to death for a non violent crime?

 

[stateofsingularity]

Originally Posted by wawaweewa

Originally Posted by stateofsingularity

Originally Posted by cguy610

Originally Posted by wawaweewa

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

We don't need to police them any more than we need to police all other citizens.

What we need to do is enforce the criminal statues. Start throwing people in jail.
If I as a CEO know that the worst that can happen is that the money that I looted will be taken away, then I have an incentive to steal.
On the other hand, if I know that my actions can result in a long term jail sentence then I have an incentive not to get into that position.

Not only is there regulatory capture but the Justice system, as it comes to corporate criminal acts, has been made impotent.

We have become a Kleptocracy.

Good post Rex but I fear it's all for naught. NT has a way of avoiding serious topics.

Good stuff wawaweewa.  They only prosecute the blatant frauds like Bernie Madoff.  For each Bernie Madoff there are like 20 Kenneth Lewis', Bank of America's CEO that made the ridiculous acquisition of Merrill Lynch during the downturn. 

Another example, BP's CEO, do you think he really cares much about what happens?  He's got his yacht, BP could go bankrupt and he'll still be living it up on his yacht and "getting his life back".  He'll never have to return those hundreds of millions he made from BP before BP went down the tubes.  He'll move on to another oil company and continue to make riches. 

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."   The (glorious) Constitution, Amendment VIII

This is interpreted to mean that the punishment must fit the crime, and white collar crime is generally a non violent crime.

Whilst I share your frustration with the status quo, I have serious reservations about adopting capital punishment for non-violent crimes, a la the PRC.

Further, should our country really look to the Middle Kingdom as the golden standard on jurisprudence?

(By the way, Ken Lewis may not have acted alone in concealing material information from his board regarding the acquisition. Messr's. Paulson and Bernanke were clearly implicated.)

What reservation?

Let me understand this. If I murder 1 person I have ruined his life and that of his family and friends. In essence those who either depended on him or otherwise were impacted in a positive way as a result of his being alive. How many people would this encompass for the average person?

On the other hand, even if I was managing a sub 100 employee company and decided to loot its accounts and drive the Corp into insolvency, how many people have I affected then? Surely it's a multiple of my 100 employees.

Either way, I don't believe that capital punishment is any more of a deterrence than a life sentence.  Life sentences (in a non club med prison) would be fine by me.
However, the " punishment must fit the crime argument" in this case is a load of *#@#@!@!.

Lame analogy.

Violent crimes and white collar crimes are nothing alike. Depriving someone of the right to life (unjustly) is not the same as ruining a business. One is reversible. The other is permanent.

According to your argument, the number of victims should determine the severity of the punishment.  Am I to understand that a hacker who impacts hundreds of people should be put to death for a non violent crime?

 

[essential1]

I agree with some things you said...

Here's what I disagree with:

A government regulatory agencies is normally packed with people who study that subject.. For example you wouldn't put Joseph Stiglitz in an EPA job, You would put him with something concerning economics.

And I agree the capture of our politicians is a major problem whether it be 10,000 for a campaign fund or a million dollar job when they leave office.. Best way to circumvent that is make a bill that decreases amount of lobbyists, changes financial contribution rules for campaigns, and rules about what jobs you can or cannot have once leaving office (more of a time frame oriented rule)... Now if you get 10 or so senators to really push this kind of bill (and yes I think there are 10 who would) and get them to fight it and put it in the National Discussion. It could get through with public pressure.. Any senator who votes against it would be called out and seriously hinder his reelection bid, if it is a bill that puts the power back to the people the people should come together and fight it. But there will be politicians on BOTH sides who would try and kill it and divide the public.. If you can get that strong push, from Huffpo/Daily Kos and predominate people on the right you could get it done..

Like said before multi-national banks and corporations will not watchdog themselves.. SO I highly disagree with this premise.. We all know the purpose is to maximize profit.. But at this notion maximizing profit often comes at our expense, so we need someone to watch out for us.. And it certainly won't be a bank because their mission is maximize profit.....

Corporations need incentives to act the right way? They don't give a damn.. Because there is always an incentive to do something. But there is always an incentive to do the opposite. It's like one of those books where you choose your own fate. If I go into the house turn to page 47, if I run away turn to page 67. They will choose whatever is easier and less time consuming and most times it is going against the government..

Because government can be bought off by a corporation, we should distrust the government and trust the corporation? When they pay off the government it is for their gain and our peril. So I would rather take the side of something I have more control over which is the government. The government can be fixed, the mind set of a corporation cannot.

In terms of getting rid of golden parachutes I 100% agree. What reason do I have to do the right thing if I can crash the company and get my $47mil.. When I listen to Fiorina talk about her business expertise in speeches, I just laugh because she sucked at HP and still got millions... So I agree with the long term stock part.. If you have to wait 5 years to cash out your money from the business you will make sure it stays top notch for those 5 years... But that is an incentive that can only be implemented by the government through regulation. The shareholders would love this to happen but they can't, because they have no power. One of the worst things to ever happen is the business world is the transfer of power from shareholders who care about the business, to CEO's who could give a damn less because when they leave they have that $30 million and get hired regardless of whether they did well or not which is baffling.

In the case of BP, if we just allow it to go through just citizen lawsuits one by one without an account set up, the citizens will lose a lot more than they should. I think more should have been set aside but $20billion is better than the $1billion some people in congress suggested... I don't care how much they make a year, or how much total money they have if it were to bankrupt them and kill the corporation it is what should happen. That would be free market they failed, they should go out of business paying all the damaged they cost from neglect... Oil drilling is something that suffers from lack of regulation.. Did people know BP wants to drill in the Arctic and will this fall? That is disastrous. They are going to build a small island (in order to avoid offshore drilling regulation) drill down a few miles, then over 6 or 7 miles... That sounds DESTINED TO FAIL... So what incentive should we give corporations like that.. Absolutely none.. Why do they deserve it? Time after time we get proof that when allowed to act alone (and paying off politicians is an act they do, is the politicians fault also but then we should create the bill to stop trusting corporations) they cost US..

So like stated before in another thread I said you cannot argue for the rights of the people and at the same time for the rights of the corporation because they rarely if ever have the same goal..

And all this ranting of how incompetent the government is (I agree but that is not because they don't know what to do) I argue that the corporation is just as incompetent if not not more so..

 

[essential1]

I agree with some things you said...

Here's what I disagree with:

A government regulatory agencies is normally packed with people who study that subject.. For example you wouldn't put Joseph Stiglitz in an EPA job, You would put him with something concerning economics.

And I agree the capture of our politicians is a major problem whether it be 10,000 for a campaign fund or a million dollar job when they leave office.. Best way to circumvent that is make a bill that decreases amount of lobbyists, changes financial contribution rules for campaigns, and rules about what jobs you can or cannot have once leaving office (more of a time frame oriented rule)... Now if you get 10 or so senators to really push this kind of bill (and yes I think there are 10 who would) and get them to fight it and put it in the National Discussion. It could get through with public pressure.. Any senator who votes against it would be called out and seriously hinder his reelection bid, if it is a bill that puts the power back to the people the people should come together and fight it. But there will be politicians on BOTH sides who would try and kill it and divide the public.. If you can get that strong push, from Huffpo/Daily Kos and predominate people on the right you could get it done..

Like said before multi-national banks and corporations will not watchdog themselves.. SO I highly disagree with this premise.. We all know the purpose is to maximize profit.. But at this notion maximizing profit often comes at our expense, so we need someone to watch out for us.. And it certainly won't be a bank because their mission is maximize profit.....

Corporations need incentives to act the right way? They don't give a damn.. Because there is always an incentive to do something. But there is always an incentive to do the opposite. It's like one of those books where you choose your own fate. If I go into the house turn to page 47, if I run away turn to page 67. They will choose whatever is easier and less time consuming and most times it is going against the government..

Because government can be bought off by a corporation, we should distrust the government and trust the corporation? When they pay off the government it is for their gain and our peril. So I would rather take the side of something I have more control over which is the government. The government can be fixed, the mind set of a corporation cannot.

In terms of getting rid of golden parachutes I 100% agree. What reason do I have to do the right thing if I can crash the company and get my $47mil.. When I listen to Fiorina talk about her business expertise in speeches, I just laugh because she sucked at HP and still got millions... So I agree with the long term stock part.. If you have to wait 5 years to cash out your money from the business you will make sure it stays top notch for those 5 years... But that is an incentive that can only be implemented by the government through regulation. The shareholders would love this to happen but they can't, because they have no power. One of the worst things to ever happen is the business world is the transfer of power from shareholders who care about the business, to CEO's who could give a damn less because when they leave they have that $30 million and get hired regardless of whether they did well or not which is baffling.

In the case of BP, if we just allow it to go through just citizen lawsuits one by one without an account set up, the citizens will lose a lot more than they should. I think more should have been set aside but $20billion is better than the $1billion some people in congress suggested... I don't care how much they make a year, or how much total money they have if it were to bankrupt them and kill the corporation it is what should happen. That would be free market they failed, they should go out of business paying all the damaged they cost from neglect... Oil drilling is something that suffers from lack of regulation.. Did people know BP wants to drill in the Arctic and will this fall? That is disastrous. They are going to build a small island (in order to avoid offshore drilling regulation) drill down a few miles, then over 6 or 7 miles... That sounds DESTINED TO FAIL... So what incentive should we give corporations like that.. Absolutely none.. Why do they deserve it? Time after time we get proof that when allowed to act alone (and paying off politicians is an act they do, is the politicians fault also but then we should create the bill to stop trusting corporations) they cost US..

So like stated before in another thread I said you cannot argue for the rights of the people and at the same time for the rights of the corporation because they rarely if ever have the same goal..

And all this ranting of how incompetent the government is (I agree but that is not because they don't know what to do) I argue that the corporation is just as incompetent if not not more so..

 

[rashi]

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

Why would they need to police themselves when they already protected by their friends in the federal government?

Thankfully President Obama got the 20 billion dollar escrow fund established (even if his methods were troubling) and Eric Holder is using every statute that he can find tp punish BP financially but the sums will still prove to not be enough to act as deterant against future reckless behavior. If BP could be suited with no liability caps or other legal safeguards that create perverse incentives, we could see a judgement that would include punitive damages well in excess of 20 billion. If a firm like BP had a 100 billion dollar or greater judgement levied against it, they and other oil companies would never skimp on safety procedures, they would have better plan in place and they might avoid the more risky drills sites. Like almost every other business, BP, is run by accountants and the accountants weighed the cost of the a few million in safety devices and redundancy against the cost of the risk of incurring a judgment of a few billion dollars. The accountants will find a few million on safety is worthwhile when those cost are weighed against the risk of insolvency.

As a fellow Austrian, I'm surprised that you would think that what President did was a good thing. Instead of using Rule of Law, you would be in favor of an overreaching Executive and would be in favor of a Presidential appointee administer the funds, instead of a real third party. Not only will the escrow account end up being more than $20 billion, the recipients will be taxed on it.

BP hasn't been convicted in court that they are responsible, we are assuming because it is their rig. It's like if someone robs my house, slips, falls, and breaks his shoulder, I am responsible because it's my house. Also, the federal government wrote the law they (BP) will only be responsible for $75 million. In a Free Market, BP would have been making a case to a private insurance company and with that, the amount of risk there was of drilling that deep, te insurance company would told them "we will not cover this because of the risk" and there would have been a way more incentive for BP to clean it up ASAP. Granted, accidents still happen, but this situation would have been very different. In a Free Market, the EPA would not have stopped BP from using detergent like substances to help clean up. In a Free Market, BP would have been able to allow help from other companies in other nations. Just like everything else the government tries to control, they drop the ball. Always remember, BP was allowed to drill that deep by statistics that government provided and allowed them to do. So who is really responsible? BP or the bureaucrats that allowed them and gave them the permits and bad information? Well, a typical choice would be BP, why? Because you cannot sue the government for negligence.

So like stated before in another thread I said you cannot argue for the rights of the people and at the same time for the rights of the corporation because they rarely if ever have the same goal..
Wait, what? The people who own a business and run a business aren't people? Of course they have the same goal. A business owner wants to make money, they find customers who want their product, they have a competitive price and good quality, the person if convinced, will buy the product. Both people are happy. Goal = achieved.

A business owner wants to make money, they sell an inferior product to person A. Person A gets upset and does not buy from the business owner again, he moves on to another business and does business. Person A is now satisfied, not only that, he brings a friend. The new company is now making money with a better product at a competitive price, so now the new business is making money, while the previous one is not and now is forced to be more innovative (or if he has enough money, he will pay off his Congressman to regulate, regulate, regulate), if not he goes out of business. That simple, consumer and owner have the same goals.

 

[rashi]

Originally Posted by cguy610

Rex, big businesses do not police themselves. Why? They have nothing to lose because of the executive compensation policies. They can come into a 200 Billion dollar corporation, run it bankrupt and leave with a golden parachute while accumulating million in stock options along the way. Then go to another corporation and do the same exact thing.

Somebody has to police them because they cannot police themselves.

Why would they need to police themselves when they already protected by their friends in the federal government?

Thankfully President Obama got the 20 billion dollar escrow fund established (even if his methods were troubling) and Eric Holder is using every statute that he can find tp punish BP financially but the sums will still prove to not be enough to act as deterant against future reckless behavior. If BP could be suited with no liability caps or other legal safeguards that create perverse incentives, we could see a judgement that would include punitive damages well in excess of 20 billion. If a firm like BP had a 100 billion dollar or greater judgement levied against it, they and other oil companies would never skimp on safety procedures, they would have better plan in place and they might avoid the more risky drills sites. Like almost every other business, BP, is run by accountants and the accountants weighed the cost of the a few million in safety devices and redundancy against the cost of the risk of incurring a judgment of a few billion dollars. The accountants will find a few million on safety is worthwhile when those cost are weighed against the risk of insolvency.

As a fellow Austrian, I'm surprised that you would think that what President did was a good thing. Instead of using Rule of Law, you would be in favor of an overreaching Executive and would be in favor of a Presidential appointee administer the funds, instead of a real third party. Not only will the escrow account end up being more than $20 billion, the recipients will be taxed on it.

BP hasn't been convicted in court that they are responsible, we are assuming because it is their rig. It's like if someone robs my house, slips, falls, and breaks his shoulder, I am responsible because it's my house. Also, the federal government wrote the law they (BP) will only be responsible for $75 million. In a Free Market, BP would have been making a case to a private insurance company and with that, the amount of risk there was of drilling that deep, te insurance company would told them "we will not cover this because of the risk" and there would have been a way more incentive for BP to clean it up ASAP. Granted, accidents still happen, but this situation would have been very different. In a Free Market, the EPA would not have stopped BP from using detergent like substances to help clean up. In a Free Market, BP would have been able to allow help from other companies in other nations. Just like everything else the government tries to control, they drop the ball. Always remember, BP was allowed to drill that deep by statistics that government provided and allowed them to do. So who is really responsible? BP or the bureaucrats that allowed them and gave them the permits and bad information? Well, a typical choice would be BP, why? Because you cannot sue the government for negligence.

So like stated before in another thread I said you cannot argue for the rights of the people and at the same time for the rights of the corporation because they rarely if ever have the same goal..
Wait, what? The people who own a business and run a business aren't people? Of course they have the same goal. A business owner wants to make money, they find customers who want their product, they have a competitive price and good quality, the person if convinced, will buy the product. Both people are happy. Goal = achieved.

A business owner wants to make money, they sell an inferior product to person A. Person A gets upset and does not buy from the business owner again, he moves on to another business and does business. Person A is now satisfied, not only that, he brings a friend. The new company is now making money with a better product at a competitive price, so now the new business is making money, while the previous one is not and now is forced to be more innovative (or if he has enough money, he will pay off his Congressman to regulate, regulate, regulate), if not he goes out of business. That simple, consumer and owner have the same goals.