"But we believe in people getting rich based on performance"

Your president, today, on compensation, culture, and capitalism:

People are rightly outraged about these particular bonuses, but just as outrageous is the culture that these bonuses are a symptom of that have existed for far too long; a situation where excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag.

And one of the messages that I want to send is that, as we get out of this crisis, as we work towards getting ourselves out of recession, I hope that Wall Street and the marketplace don't think that we can return to business as usual. The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can't be the model for economic growth going forward.

And I've spoken before. We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth. That involves making investments on health care and energy and education. That means increasing our productivity across sectors and not just relying on the financial sector for all our economic growth. It means that shareholders and board of directors have to hold executives more accountable for their compensation scales […]

The financial regulatory package that we're designing as well as the economic policies that we want to put in place are going to put an end to that culture. […]

[T]here are a whole bunch of folks now who are feigning outrage about these bonuses that a year ago or two years ago or three years ago said, well, we should never meddle in these compensation plans. These are the best and the brightest. They know what they're doing. That's part of the market.

And now, suddenly, they're outraged. The point that I've been trying to make consistently has been that we believe in the free market. We believe in capitalism. We believe in people getting rich. But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create. 

Comments

[Pro Libertate]

Ah, the deserving rich.

[SpongePaul]

excess risk taking have all made us vulnerable and left us holding the bag.
____________________________________
UMM No Mr. Obama, Your bailouts left Us holding the bag. before your bailout the company would have held the bag all the way down. and then a new or better comapny would have taken its place.

[Gilbert Martin]

Shorter Obama:

I like socialism.

And I am the supreme judge of the REAL value of every job and activity. The market don't know diddly squat.

[JB]

Obama had no problems about these bonuses when he and the dems could do something about them.

Now, they claim outrage weeks after handing AIG $30 billion.

Obama is a liar and more and more people are starting to see behind the curtain.

[trollumination]

Ha ha ha ha! It's funny because Obama talks about markets and stuff, even though he's not a libertarian!

[Episiarch]

We believe in capitalism.

Clearly not:

We have to move beyond a constant bubble bust mentality

[Lefiti]

"But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create."

Yeah, and we believe in the Tooth Ferry, too!

[Warty]

This is a head fake. Are we supposed to believe that Obama really gives a shit if some Wall Street assholes get rich?

[JP]

That means increasing our productivity across sectors and not just relying on the financial sector for all our economic growth. It means that shareholders and board of directors have to hold executives more accountable for their compensation scales.

You know, there was a great way to accomplish all this, and it wouldn't have cost a trillion dollars.

[Blue]

"But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create."

That would refer to the crappy books he wrote - right?

[Maitri]

"But we believe in people getting rich based on performance and what they have add[ed] in terms of value and the products that services that they create."

Is this not the real essence of capitalism? What's the problem then?

[Jennifer]

If you really believed in people getting rich based on performance, then why did you take tax money from businesses that performed well to bail out businesses that didn't, you big-eared jackass?

[sixstring]

Yeah, and we believe in the Tooth Ferry, too!

That's the little boat that carries all the teeth from the people who have so many teeth to those less unfortunate who can hardly smile at all.

[Reinmoose]

This:

That involves making investments on health care and energy and education. That means increasing our productivity across sectors and not just relying on the financial sector for all our economic growth. It means that shareholders and board of directors have to hold executives more accountable for their compensation scales

does not really follow from this:

We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth.

[Tony]

Is this not the real essence of capitalism? What's the problem then?

The problem is libertarians are apologists for corporate welfare, so this won't do at all.

[Jennifer]

Mea culpa: the phrase "big-eared jackass" was a wholly inappropriate way to refer to our president, since all jackasses have big ears and my comment was therefore redundant. A simple "jackass" would've sufficed.

[The Obamarcle at Delphi]

People are rightly outraged about these particular bonuses...[T]here are a whole bunch of folks now who are feigning outrage

And using my mystical powers of Hope and Change(tm), only I can tell who is right, and who is merely feigning.

[Tony]

If you really believed in people getting rich based on performance, then why did you take tax money from businesses that performed well to bail out businesses that didn't, you big-eared jackass?

Because the self-styled free marketeers created a financial doomsday scenario that can only be fixed by massively unfair bailouts.

[Pro Libertate]

Ah, yes, since probably not one single libertarian or even "libertarian" in the U.S. approves of corporate welfare, that makes sense.

[Reinmoose]

Epi -
I take back what I said earlier. Tony may in fact not be real, since he's stepped it up since you gave him the advice.

[Lester Hunt]

It's becoming more obvious why all the faux rage on the part of politicians about the AIG bonuses, which they themselves enabled: It's a cynical attempt to deflect public anger away from themselves (where it belongs) and in the direction of supporting their policies -- ie., more rules and regulations and more "investment" in government.

[Shannon Love]

...that these bonuses are a symptom of that have existed for far too long; a situation where excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag.

Yes, especially at the government sponsored enterprises Freddie Mac and Fannie Mae where this entire debacle began. I suggest we tie the pay of congress and all political appointees to health of the economy, after all, fair is fair.

But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create.

An the magic performances fairies will tell us just who did this and who did not? One of the big problems with leftist is that they actually believe that such objective standards exist. They have no clue about the inherent complexity and ambiguity of the value of anything in the real world. The idea that an objective "fair" price exist exist that the real world political system can find that price is silly in the extreme. It's all part of the leftist god complex wherein they can lay hands on any information they need at any time.

Of course, coming from a man who made $4.5 million writing books about himself, I should not be surprised that he thinks he can determine the value of other people's work.

[Solana]

But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create.

Value = social value = "Capital is reckless of the health or length of life of the laborer, unless under compulsion from society."

[JW]

...a situation where excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag.

"But seriously, enough about Congress...."

[Jennifer]

Because the self-styled free marketeers created a financial doomsday scenario that can only be fixed by massively unfair bailouts.

There's not a free marketeer in the world who thinks successful businesses should be taxed to bail out their unsuccessful competitors.

[Gabe]

I hope we don't have any more "accidental" contaminations of bird flu virus in the common flu vaccines that Reason likes to promote.

http://www.torontosun.com/news/canada/2009/02/27/8560781.html

[ev]

I have a favor to ask of the masses.

Does anyone have a good article/graph/data showing specifics on the relation between business performance and CEO salary?

thanks, I'm too loaded on pills because of the pleurisy to google too much.

(I just found out that it killed both Franklin and Marx! Saint and devil!)

[Obama]

Get high on performance, not drugs.

[Tony]

Yes, especially at the government sponsored enterprises Freddie Mac and Fannie Mae where this entire debacle began.

Good. I'm glad you put this Republican propaganda bullshit upfront so I know to ignore the rest of your post.

[Tony]

There's not a free marketeer in the world who thinks successful businesses should be taxed to bail out their unsuccessful competitors.

No doubt. Good thing the alleged free marketeers are no longer in power. Once again liberals are stuck cleaning up their messes.

[JW]

And I've spoken before. We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth.

Yes, because the past 200 years of capitalism has just been jerking off. This whole thing about you living better than your parents, grandparents, etc, is just one massive delusion. Really, we're still in huts with thatch roofs and farming shit for a living.

Time to get your game face on! Coach Obama says that this time it's the real thing!

[Pro Libertate]

Tony,

Fake troll that you are, that's still a silly remark. The GOP is as complicit in the Fannie/Freddie crap as the Democrats are. It's one, big everyone-must-own-a-home socialist family.

[alan]

The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can't be the model for economic growth going forward.

Did he just tell Barnanke to stop issuing, and Geitner to stop printing the easy dough? Nah, that can't be right.

[JW]

Once again liberals are stuck cleaning up their messes.

Woo-hoo! Hear that gang? The bailouts are on the liberals!

[Nick]

Tony thinks Republicans = free marketeers. I think Tony is retarded. Which one of us is right?

[John C. Randolph]

But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create.

And having done so, Obama believes in robbing them blind to pay hundreds of billions of unearned bailout money to the scumbags who contribute the most to political candidates.

-jcr

[Dagny T.]

We believe in capitalism.

Clearly not:

Guys, Obama is going to fix capitalism so that only the good people get rich. What part of this don't you understand? It's just like Liz Lemon and the hot dogs on 30 Rock:

"I want all the hot dogs, please! And I'm giving them to the good people!"

[Reinmoose]

I think JW hits the nail on the head. This whole "people are suffering" thing is pathetic (remember that quote from yesterday by the guy in the "live simple" article about how he didn't realize it would get THIS BAD!?).

The 20/20 piece by Stossel was right on top of this. Middle class people today have boats, and RVs, and 200 sq ft houses, and 2 late model cars, and eat out, and go on vacations. There is really no need to mess with the basic premises behind a system that has given us this level of prosperity over just a few decades unless you are willing to risk the prosperity itself.

[Reinmoose]

Did he just tell Barnanke to stop issuing, and Geitner to stop printing the easy dough? Nah, that can't be right.

alan - he's going to right after we get out of this mess. He would have already if it weren't for Bush and the free market fundamentalism of the last 8 years.

[Tony]

The GOP is as complicit in the Fannie/Freddie crap as the Democrats are. It's one, big everyone-must-own-a-home socialist family.

And it has nothing to do with the financial crisis. CRA-backed banks did not engage in subprime lending. They required rigorous eligibility for home loans, and accounted for at most 6% of related foreclosures.

Anyone even referring to Fannie Mae and Freddie Mac as a major cause of the crisis has his head too far up Sean Hannity's ass and is not a serious person.

[Jennifer]

Before Obama became president, Hit and Run had MUCH better trolls.

[fyodor]

But Reinmoose, anything good that happens to me was my doing. Anything bad that happens to me is the system's doing. Who am I? TEH HUMAN!!!

[Inkstained Wretch]

"[T]here are a whole bunch of folks now who are feigning outrage about these bonuses that a year ago or two years ago or three years ago said, well, we should never meddle in these compensation plans."

Well, yeah. Those prior compensation plans were not paid with my taxpayer dollars. These are. That makes it different.

[Tony]

Tony thinks Republicans = free marketeers.

No, I don't. I think Republicans say they are free marketeers. The question is how diligent were you people in not believing them vs. attacking every liberal bogeyman you could think of.

[Episiarch]

Epi -
I take back what I said earlier. Tony may in fact not be real, since he's stepped it up since you gave him the advice

My trolldar is finely tuned, much like my boozedar, chickdar, and opiatedar.

[John C. Randolph]

Freddie Mac and Fannie Mae where this entire debacle began.

I wouldn't say that it began with the GSEs. I'd say it began with the Federal Reserve. After all, no matter how irresponsible Franklin Raines and the rest of the unemployable politicians at FNMA might be, if they had to obtain capital to lend from real deposits by real savers, the scale of the pyramid would be limited by rising interest rates.

They had two major enablers: the unlimited supply of funny money from the Fed at negative real interest rates, and the efforts of all their bought-and-paid-for politicians who fought tooth and nail to keep the bribe money coming in.

-jcr

[Reinmoose]

*should be 2000 sq ft homes 🙂

[R C Dean]

Yes, especially at the government sponsored enterprises Freddie Mac and Fannie Mae where this entire debacle began.

Which, I hasten to add, are planning to pay ginormous retention bonusses to their key employees. Where's the outrage?

"But we believe in people getting rich based on performance and what they have add[ed] in terms of value and the products that services that they create."

Is this not the real essence of capitalism? What's the problem then?

Actually, no. Capitalism is about people getting rich (and going broke) based on contracts freely entered into.

What Obama and his dim-witted followers are doing is trying to define what kind of compensation will be permitted for what kinds of contracts. That ain't capitalism.

And I must say, I find it rich (er, so to speak), that a guy who is surrounded by people who have gotten rich without adding value or creating products and services can utter this sentiment.

[ChicagoTom]

Obama had no problems about these bonuses when he and the dems could do something about them.

Now, they claim outrage weeks after handing AIG $30 billion.

Obama is a liar and more and more people are starting to see behind the curtain.

THis is so fucking true. Geithner and Summers are going to fuck this administration.

Obama (or at the very lease Geithner and Summers) had known about the bonuses and only now pretended to be SHOCKED by them once there was a public backlash.

Now the admin is trying to blame Dodd about the compensation issue despite the fact that it was Geithner and Summers who applied pressure to Congress (over Dodd's objections) to water down the amendment that would have limited past and future compensation (Geither succeeded in getting the limits ONLY for compensation awarded after Feb. 11 )

Obama is not only being disingenuous with his "outrage" his admin is trying to blame others when the real culprits are Geithner and Summers (it was well reported that within the administration there were quite a few people who wanted more punitive legislation towards the banks who got us into this mess and now wanted bailouts but Geithner and Summers won the battle and limited quite severly the scope of any consequences for the bad actors.)

Obama needs to throw Geithner/Summers under the bus and get a Treasury Sec. who doesn't have such close ties to the banking industry.

It's kind of surprising that there aren't more calls for Geithner to resign (esp. from the GOP -- between his giveaways to the banks and his tax issues one would think the GOP would be pouncing on Timmy right now)

[JW]

Tony, I think I hear your mom calling you home.

[Pro Libertate]

You know, even within the four walls of government bullshit, there was a better way to handle this. What Obama and various Congresspersons should have said was that they made a mistake not addressing this before and that, unfortunately, they don't have the power to do anything about it. However, they do urge the shareholders and management of AIG to "do the right thing."

They'd know that nothing would come of this line of crap, but they'd also know that the issue would vanish from the radar if they'd stop harping on it. Of course, this approach, as venal as it would be, also requires two impossibilities: (1) taking any accountability whatsoever, and (2) admitting in any way at all that there's something the government can't and shouldn't do.

[John C. Randolph]

Where's the outrage?

I've got plenty of it if you need some.

-jcr

[Marc]

Tony thinks Republicans = free marketeers. I think Tony is retarded. Which one of us is right?

Tony is awfully confused about the differences between Republicans, libertarians, and "free-marketeers". To wit:

The problem is libertarians are apologists for corporate welfare, so this won't do at all.

My mind boggled.

[ChicagoTom]

Guys, Obama is going to fix capitalism so that only the good people get rich.

It's funny to read tripe like this.

The problem with Obama is that he is giving the "capitalists" everything they want and trying to remove any risk.
He is rewarding the very people (the bad people) who got us here, and insists that those same people are the ones to "fix" the problem. (Apparently the way to fix it is to make capitalism risk free)

[Marc]

Anyone even referring to Fannie Mae and Freddie Mac as a major cause of the crisis has his head too far up Sean Hannity's ass and is not a serious person.

Ah, the "serious person" gambit. Clever.

[John C. Randolph]

Are we supposed to believe that Obama really gives a shit if some Wall Street assholes get rich?

He cares very much. They're his paymasters, after all.

-jcr

[John C. Randolph]

libertarians are apologists for corporate welfare,

From this statement, I must conclude that Tony has no idea what a libertarian is.

Libertarians reject any transfer of wealth by force, whether it's from rich to poor or vice versa. Plunder is a crime.

-jcr

[Mike M.]

And I've spoken before. We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth.

And we are going to build that foundation for long-term sustainable economic growth by spending our way to wealth, while at the same time responsibly saving money for the future.

[Tony]

Ah, the "serious person" gambit. Clever.

Not a gambit. Fact. If you get your so-called facts from FOX news, which is the only reason you'd be heaping all of the blame on FM & FM, you're not a serious interlocutor. You're a victim of propaganda. All you have to do is go read a fucking Wikipedia page to be disabused of this nonsense.

How many times do the Republicans and their media puppets get to blame poor black people for all the problems in the world before people start realizing they're full of shit?

[plutosdad]

O. M. G.
Is this really going to be what it's like?
"you consumers don't know what's best, we'll redirect industry to only create products that we believe are necessary, what you want is not important we'll decide what you need?

so where do we move to?

[Other Matt]

If you really believed in people getting rich based on performance, then why did you take tax money from businesses that performed well to bail out businesses that didn't, you big-eared jackass?

It is what voting "against" gets you, the devil instead of the demon. Besides, he's a black guy, so it doesn't matter what his politics are.

[mitch]

"Obama needs to throw Geithner/Summers under the bus and get a Treasury Sec. who doesn't have such close ties to the banking industry."

It would be hilarious if Obama sacked those guys after less than 2 months on the job. And then spent umpteen months trying to find people to replace them who had actually paid all their taxes.

[Tony]

From this statement, I must conclude that Tony has no idea what a libertarian is.

Okay let me try again if you'll be so kind.

A libertarian is a person who claims not to be in favor of any forcible transfer of wealth, but in practice shills for Republicans because they pretend to believe in free markets, and only when their adventure in deregulation and lowering taxes comes crashing down into a massive pile of calamity do you claim that Republicans are bad too, and they just weren't true enough to your principles.

[Other Matt]

O. M. G.
Is this really going to be what it's like?

Yes, and he said it all the way along, and nobody paid attention as they were too caught up in his skin color and that he wasn't a republican. Next question?

[JW]

RC @ 3:46: Which, I hasten to add, are planning to pay ginormous retention bonusses to their key employees. Where's the outrage?

I've had to deal with one of the accomplices convicted in the Fannie Mae book cooking scheme a few years back.

All I can say is, it's criminal (literally) how stinking rich he still is and how much of a piece of work he is too. What a guy...

[Other Matt]

And then spent umpteen months trying to find people to replace them who had actually paid all their taxes.

Well, as a good note, he can then claim it as "bipartisan" as there don't seem to be any democrats that actually pay their taxes.

[plutosdad]

" All you have to do is go read a fucking Wikipedia page to be disabused of this nonsense."

quote of the year

[JW]

Tony, seriously, it's your mom calling you. It's time for you to give her a bath. That ass isn't going to scrub itself, ya know.

[plutosdad]

"Yes ... Next question?"

Where do I put my money? I think I asked that before, no one seems to know.

sigh

[Neu Mejican]

JW | March 18, 2009, 3:33pm | #
And I've spoken before. We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth.

Yes, because the past 200 years of capitalism has just been jerking off. This whole thing about you living better than your parents, grandparents, etc, is just one massive delusion. Really, we're still in huts with thatch roofs and farming shit for a living.

Hmmm...how does this relate to the amount of wealth after the bubble bursts? Was America more wealthy in aggregate in 2000 than we are today? In 1970? In 1944?

BTW...no free marketeer worth the name supports the concept of a corporation to begin with. As soon as you severe liability from the economic actions of individual human actors by creating a pseudo person to take the fall for their mistakes, you have stepped away from a free market.

[Not a Right Wing Shill]

"Really, we're still in huts with thatch roofs and farming shit for a living."

Not me. I've moved up to a sod house. It's great!

[Reinmoose]

A libertarian is a person who claims not to be in favor of any forcible transfer of wealth, but in practice shills for Republicans because they pretend to believe in free markets, and only when their adventure in deregulation and lowering taxes comes crashing down into a massive pile of calamity do you claim that Republicans are bad too, and they just weren't true enough to your principles.

LOL
Tony, good one, man.

[plutosdad]

their adventure in deregulation

Here Tony some education for you:
http://www.reason.com/news/show/131264.html

[Neu Mejican]

Topic for discussion:

Do corporate agents need to be more closely tied to the liability of the corporation they are running?

Since corporate status is a creation of the state, should laws be revised to make it more difficult for corporate agents to enrich themselves while ruining the corporation they are running?

[obvious]

plutosdad | March 18, 2009, 4:02pm | #
"Yes ... Next question?"

Where do I put my money? I think I asked that before, no one seems to know.

sigh

Give it to me.
I'll take care of it.
I promise.

[Tony\'s Clone (aka Tony Toni)]

"THis is so fucking true. Geithner and Summers are going to fuck this administration"

No. Bush put his phaser on "Premptively Fuck Up the Obama Administration", aimed it at the Whitehouse, and then pulled the trigger as he boarded Marine One for the last time. It's all Bush's fault.

[JW]

Hmmm...how does this relate to the amount of wealth after the bubble bursts? Was America more wealthy in aggregate in 2000 than we are today? In 1970? In 1944?

The short answer is yes, without having any refernce materials in front of me. Aren't you the king of googling this sort of data?

C'mon, are you actually taking this trite shit seriously? Nobody has been trying to build any business for long-term growth? Ever? Are you better off today, taken as a whole, than you were in 1980? I know I am.

The Obamster doesn't deserve to be taken seriously for spouting this nonsense.

[Civil Discourse]

"Obama is not only being disingenuous with his "outrage" his admin is trying to blame others when the real culprits are Geithner and Summers"

That's just what affirmative action presidents do.

[Joshua Holmes]

The point that I've been trying to make consistently has been that we believe in the free market. We believe in capitalism.

Nope, you only get to pick one.

[Tony is joe]

He has to be.

[Neu Mejican]

JW,

I am google lazy today.

As for whether or not YOU are better off or not, I am gonna guess that has something to do with your age...I was in high school in 1980. Even though I am in grad school at the moment, my income is significantly higher than it was when I worked as a construction gopher part-time.

No one, by the way, said no one way building long term business models. Obama, in this somewhat lite speech, was talking about the fact that the system ALSO rewarded people for a different class of behaviors...

Surely.

[???]

"so where do we move to?"

Our bunkers

[creech]

There's a joke floating around that Obama "Says Nothing Better than Anyone."
We need to listen better because it ain't "nothing;" it is beginning to look like corporatism as promulgated and practiced by one Benito Mussolini. And, just as many Americans were enthralled by Il Duce's system in the 1920s and 1930s, many Americans are again ready to jettison individual liberty in favor of authoritarianism.

[Reinmoose]

I'm not shilling for or trying to in any way protect or credit the republicans - this is strictly a comment against the Obama booster club:

If John McCain had won (as if!) and did everything that Obama has done thus far, the Obama booster club would be crying so loud about how scandalous this is and how the republicans just keep using the same failed policies.

They allow Obama to say one thing and do another, and take him for his word without critically looking at the policies themselves.

[Gilbert Martin]

"BTW...no free marketeer worth the name supports the concept of a corporation to begin with. As soon as you severe liability from the economic actions of individual human actors by creating a pseudo person to take the fall for their mistakes, you have stepped away from a free market."

The "deep pockets" legal practice that otherwise allows plantiffs to make someone who is 1% resposible for a liability pay 99.99% of the cost simply because he has the money to take and the other defendents do not absent the corporate shield of limited liabilty is not a "free market" concept to begin with.

[max hats]

C'mon, are you actually taking this trite shit seriously? Nobody has been trying to build any business for long-term growth? Ever? Are you better off today, taken as a whole, than you were in 1980? I know I am.

Really? In 1980, average middle class people could buy a house, a car and live a normal life with one income. My parents certainly did. I have a roughly equivalent job to what my father had at roughly the same time in his life, for roughly equivalent firms (relative to the economy in their respective days) and for me, the idea of buying a house is a pipe dream. The idea of starting a family with only one income strikes me as careless and dangerous as drunk driving. Granted, ipods and the internet do exist. Not sure they balance everything else out.

[Other Matt]

It's all Bush's fault.

I thought it was all Rush's fault?

[domoarrigato]

Neu Mejican | March 18, 2009, 4:07pm | #

Topic for discussion:

Do corporate agents need to be more closely tied to the liability of the corporation they are running?

Since corporate status is a creation of the state, should laws be revised to make it more difficult for corporate agents to enrich themselves while ruining the corporation they are running?

NM, this is a question of corporate governance. Historically, states have been the entities that grant incorporation, not the federal government - though in practice, Delaware's statute is copied by most states where significant numbers of companies are incorporated. Surely, this is an area that could be improved, however, federalizing the incorporation statute would probably not be an ideal method in my opinion.

[Other Matt]

Where do I put my money? I think I asked that before, no one seems to know.

Why, just pay more taxes. It's patriotic to do so.

[domoarrigato]

Buy TIPS! but too late - they rallied 50 bps already today!

[Tony]

If John McCain had won (as if!) and did everything that Obama has done thus far, the Obama booster club would be crying so loud about how scandalous this is and how the republicans just keep using the same failed policies.

I disagree. First of all JMc's solution to the crisis was to cut more taxes. He wouldn't have done what Obama's doing.

Secondly, I don't know of anyone, even hardcore Obamanites (which I was never, btw) who are either pleased with his actions or sure they will work. Like most everyone else we're just holding our breath hoping it will work. That we trust Obama has a lot to do with the fact that he seems to be a serious person interested in fixing the problem and not a Republican tit.

[Michael P.]

Not a gambit. Fact. If you get your so-called facts from FOX news, which is the only reason you'd be heaping all of the blame on FM & FM, you're not a serious interlocutor. You're a victim of propaganda. All you have to do is go read a fucking Wikipedia page to be disabused of this nonsense.

How many times do the Republicans and their media puppets get to blame poor black people for all the problems in the world before people start realizing they're full of shit?

Holy fuck.

[Neu Mejican]

federalizing the incorporation statute would probably not be an ideal method in my opinion.

For the most part I agree.
Although I can see advantages to as uniform standard, it seems the state level is the right level for this.

I wonder, just wonder, whether large multinationals that are "too big to fail" may need to have a different status than your average corporation...and play by different rules. The larger the corporate structure, the more easily bad actors can fold their behavior into the corporations functioning. Large bureaucracies have this problem whether they are governmental or corporate.

[ChicagoTom]

If John McCain had won (as if!) and did everything that Obama has done thus far, the Obama booster club would be crying so loud about how scandalous this is and how the republicans just keep using the same failed policies.

And what would the McCain booster club do??? They would be defending him tooth and nail (just like Bush's boosters did until his term limits kicked in and then they all pretend like the last 8 years didnt happen) -- so what's your point? That partisans are partisan?

They allow Obama to say one thing and do another, and take him for his word without critically looking at the policies themselves.

Im sorry but this is BS. There is a lot of anger and outrage over Obama and his appointees from the liberal side. You can see it at DKos, TPM, Atrios has been calling out Geithner and Summers and reminding people that the buck stops with Obama -- they are his guys. And it's not just the economy. Liberals are calling Obama out about not prosecuting torture, about his signing statements bullshit, about his "enemy combatants" terminology bullshit.

Hell I'm mostly liberal and I am pissed as hell. (But don't blame me, I voted for Babar)

Compared to the deafening silence from the right during the Bush years the liberals are actually demanding that Obama practice what he preached.

Maybe it isn't a HUGE swarm of outrage, but the guys has been in office 2 months. If he keeps this up the outrage will be deafening.

[Reinmoose]

Tony - you cannot shy away from the fact that Obama's administration is corporatist - cannot. The idea that by giving money to the big guys and working with industry leaders that it will help create jobs and wealth in the lower classes.... where have I heard that before.... supply...side...economics...

[Neu Mejican]

Gilbert Martin,

Huh?

It's just a syntax thing I am sure, an anacoluthon, but I don't understand what you wrote.

[Reinmoose]

ChiTom -
Surely you circulate in more liberal circles than I do at the moment (I just moved, and therefore don't have many friends yet). I do avoid political conversation at all cost with my friends, anyway, since I've had bad experiences with it (mostly me wanting to explode but trying not to show it)

I will take you at your word.

[domoarrigato]

That we trust Obama has a lot to do with the fact that he seems to be a serious person interested in fixing the problem and not a Republican tit.

What is a "serious person"? I assume you would define it as a person who agrees with you within some narrowly defined range of parameters. You guys won the election, so you think you get to unilaterally define the "serious" range of political beliefs as being further left and more narrowly defined than before.

But being popular (for now) doesn't make you right - and it certainly doesn't make people with opposing views "unserious." If your goal is argue effectively, I recommend you come up with an alternate approach, as this one is likly to appeal only to people who already agree with you.

If you weren't paying attention, making this mistake is exactly how the GOP ended up becoming irrellevant in four short years.

[Tony]

Tony - you cannot shy away from the fact that Obama's administration is corporatist - cannot. The idea that by giving money to the big guys and working with industry leaders that it will help create jobs and wealth in the lower classes.... where have I heard that before.... supply...side...economics...

I'm willing to suspend judgment until we're not in the middle of a crisis. To use the cliche, they have to stop the bleeding before curing the illness, or whatever. If there was a solution that didn't involve wildly unpopular giveaways to the very culprits in this mess, I'm sure they would have explored it. I just hope Secy. Geithner is capable of seeing non-corporatist solutions, and I'm not convinced of that yet.

[Not a Right Wing Shill]

"Compared to the deafening silence from the right during the Bush years the liberals are actually demanding that Obama practice what he preached."

And yet with those big ears he still can't hear them. Odd that.

[Episiarch]

If Tony is joe he got a lot more fun.

[Not a Right Wing Shill]

"To use the cliche, they have to stop the bleeding before curing the illness, or whatever."

What cliche' books have you been reading?

[Reinmoose]

Tony's not joe because at one point they coexisted. I'd be hard pressed to credit joe with creating an alternate personality and phasing him in.

[Gilbert Martin]

NM - the corporate form of limited liabilty means that investors can only lose the amount of the investments they put up if the corporation goes belly up from some massive liabilty resulting from corporate officer's malfeasance, etc.

You say this is not "free market".

In other business arrangements outside of corporations (partnerships for example) a person who is 1% responsible for a liabilty can get stuck with 99% of the bill in a court judgement just because he happens to have the money and the other defendant(s) who are actually responsible for 99% of the liabilty don't have it.

That concept is what corporations protect against. What I was pointing out is that concept has nothing to do with "free markets" either.

[Kolohe]

Since corporate status is a creation of the state, should laws be revised to make it more difficult for corporate agents to enrich themselves while ruining the corporation they are running?

yes.

The purpose of the limited liability corporation to limit the liability of the owners to the amount they have invested. This is a good thing.

What has happened is the emergent of a 'management class' whose interests increasingly are at odds with the ownership class. And society in general. Esp as this ownership class has expanded to encompass nearly half the country if you define it liberally.

We are long past due some structural reform to rebalance the realtive power of the 'management class'.

But I'm short on specifics on how to do it.

And personal repsonsibility from all parties is a necessary condition to start it off anyway - something which is very short supply these days.

[Tony]

If you weren't paying attention, making this mistake is exactly how the GOP ended up becoming irrellevant in four short years.

The GOP became irrelevant because they were responsible for 8 years of disaster and incompetence. Their penchant for catering only to their most extreme wing and banishing all dissenters is why they'll be irrelevant for the next 20.

I'm sure there are some serious Republicans. But not that many.

I said Obama "seems" serious in a way that is directly polar to the way Bush "seemed" like an ideological zealot.

[Brandybuck]

Is the honeymoon over yet? Can I tell Obama to go fuck himself, or am I still maritally obligated to do it for him?

[Reinmoose]

If there was a solution that didn't involve wildly unpopular giveaways to the very culprits in this mess, I'm sure they would have explored it.

How old are you, Tony? 16, 17? Is Bush the only politician you've ever seen in your life?

[domoarrigato]

NM,

Although I can see advantages to as uniform standard, it seems the state level is the right level for this.

The only advantages would be if the federal statute was objectively better than the Delaware one. The truth of the current situation is that the Delaware statute is popular, in part, because of it's friendliness to management. So shareholders interests are generally not primary concern when choosing. The owner of a private company usually wants to cash out in the IPO - while retaining as much influence over his company as possible, even if it is out of proportion to the stake that they retain. Witness special classes of shares that have 10x voting rights and things like that. Later on in a corporations life, as it matures, this initial choice makes it easy for a sucessful CEO to entrench their control via board appointments - like Disney under Eisner.

Multinationals are kind of a different animal - many are listed on multiple exchanges, or have different units incorporated in different countries. Unless you advocate a "one-world" incorporation standard, they get to carve out whatever advantages regulatory arbitrage affords. It's life, and part of globalization.

[JW]

As for whether or not YOU are better off or not, I am gonna guess that has something to do with your age...I was in high school in 1980. Even though I am in grad school at the moment, my income is significantly higher than it was when I worked as a construction gopher part-time.

Well, yes, but that wasn't the point. We have access to a whole host of technologies that we didn't in 1980 (or pick any random date). We live longer and have more leisure time, just to cite a couple data points.

If you have kids, and if you haven't already, try describing the state of technology of your childhood to them. They can't wrap their heads around a world without DVDs, email, Internet, on-demand movies, iPods, etc. To them it's the dark ages.

No one, by the way, said no one way building long term business models. Obama, in this somewhat lite speech, was talking about the fact that the system ALSO rewarded people for a different class of behaviors...

I didn't hear the speech, just what's here.

Going by the execerpts above, it's trite and lazy. I'll give the benefit of the doubt that there may have been more to it, but standing alone, it's silly talk to say that NOW we're going to start building for the long-term (and implicitly, with the "right people").

And that people sometimes get rewarded for bad behavior, I stopped worrying about that in the 9th grade. It happens. Statements from BOH to the contrary, it ain't gonna change.

Others on the thread have plainly said what the better solution should have been to avoid all this garment rending, so no need to repeat them.

[Brandybuck]

Their penchant for catering only to their most extreme wing and banishing all dissenters is why they'll be irrelevant for the next 20.

If your standard holds, then we'll banish the Democrats as well in 2016, and well get of 12 years of third parties in power! Whoooo!

[Kolohe]

In related news, look who else is getting rich based on "performance"

[Tony]

How rich... I espouse opinions shared by a current majority in this country and the minuscule band of cultists here are arguing about whether two liberals could possibly exist in the same place.

[domoarrigato]

ToniLoc,

The GOP became irrelevant because they were responsible for 8 years of disaster and incompetence.

Apparently the point that Obama is doing the same thing went right over your head.

I'm sure there are some serious Republicans. But not that many.

Funny. I don't think there are that many "serious" Dems or GOP - since I define "serious" according to a narrow set of libertarian principles... why do I bother...

I said Obama "seems" serious in a way that is directly polar to the way Bush "seemed" like an ideological zealot.

Of course you must realize that to many people here, you seem laughably "unserious." For one, you seem completely unable to hold a different view in your mind and examine it in any objective light.

I shall return to discussing with Neu Mejican, who I consider a far more worthy opponent. Note: I avoid calling him "serious" since I would consider that an insult, given the amount we disagree.

[domoarrigato]

Tony | March 18, 2009, 4:49pm | #

How rich... I espouse opinions shared by a current majority in this country and the minuscule band of cultists

"53% of the country voted the same way as me for whatever reason, so my ideas must be infallible."

[JW]

Really? In 1980, average middle class people could buy a house, a car and live a normal life with one income. My parents certainly did. I have a roughly equivalent job to what my father had at roughly the same time in his life, for roughly equivalent firms (relative to the economy in their respective days) and for me, the idea of buying a house is a pipe dream. The idea of starting a family with only one income strikes me as careless and dangerous as drunk driving. Granted, ipods and the internet do exist. Not sure they balance everything else out.

I was talking as a whole, not in individual cases. As to why you can't afford a home, I don't think I need to tell you why that is if you've spent any time here.

FWIW, I have a better job than either of my parents did, I've owned several homes and so many more options than I did 20 years ago that it would be tough to list them all.

Do some things cost more than it used to? Sure. A lot costs much less too. Even more didn't exist 20 years ago.

Ask the next obviously lower income person you see, talking on their cell phone, if they would rather be alive at their current age today or 20 years ago.

[ChicagoTom]

What is a "serious person"? I assume you would define it as a person who agrees with you within some narrowly defined range of parameters.

A serious person is one who values fact over opinion. Who wants to hear opposing viewpoints rather than shutting out people who disagree with your ideology. A serious person is one who thinks about decisions rather than relying on nothing more than a gut instinct.

A serious person is the OPPOSITE of George W. Bush.

What a serious person isn't: Inherently right.

Obama may be a more "serious" president than his predecessor, but that doesn't make him right (as his actions and his shoveling money into failing companies has proved)

[Tony]

How old are you, Tony? 16, 17? Is Bush the only politician you've ever seen in your life?

I was born during Reagan, so I have yet to experience a government that wasn't a pawn of big corporations.

I'm reserving judgment on Obama because he campaigned precisely on ending this. If he doesn't live up to it, it's his own fault and he'll get what he deserves.

[Tony]

since I define "serious" according to a narrow set of libertarian principles

Then you're not being serious.

[Kolohe]

I was born during Reagan, so I have yet to experience a government that wasn't a pawn of big corporations.

I'm pretty sure you needed to be born during Jackson's admin to experience that.

[domoarrigato]

since I define "serious" according to a narrow set of libertarian principles

Then you're not being serious.

*smacks head* sigh...

[Tony]

"53% of the country voted the same way as me for whatever reason, so my ideas must be infallible."

I've never claimed to be infallible. I am just noting the irony of a place that claims to respect "free minds" whose inhabitants suspect anyone not buying their fringe applesauce of being a troll or a clone.

[Not a Right Wing Shill]

Obama was the second highest recipient of AIG money:

http://2.bp.blogspot.com/_QHsCDdglhQA/ScAOr0CA1jI/AAAAAAAABGI/8lmYe1cwEb4/s1600-h/aigrecipients.jpg

[Jennifer]

When did "liberals" officially start favoring "taking tax money from the poor and handing it over to the rich?" Was G.W. Bush being a liberal when he first proposed these bailouts?

[ChicagoTom]

Their penchant for catering only to their most extreme wing and banishing all dissenters is why they'll be irrelevant for the next 20.

If your standard holds, then we'll banish the Democrats as well in 2016, and well get of 12 years of third parties in power! Whoooo!

This type of nonsense makes me laugh. ANyone who honestly believes that the Democrats cater to their liberal wing is STUPID:

From Huffingtopn Post :

A bloc of Senate Democratic moderates is quietly maneuvering to keep open the option of vetoing two of President Barack Obama's most ambitious agenda items this year -- climate change and health care reform.

Eight Democrats who want to water down new climate change legislation have already joined with Republicans and signed a letter opposing any attempt to use fast-track budget rules to prevent filibusters. Many of the same Democrats also oppose using those budget rules to prevent filibusters of health care legislation.

here is Evan Bayh (D-IN) via ThinkProgress:

Sen. Evan Bayh (D-IN) officially announced the creation of his new Blue-Dog style coalition of approximately 15 "moderate" Democratic senators. As Roll Call explained last week, members of the group "acknowledge that they are seeking to restrain the influence of party liberals." During his announcement, host Joe Scarborough asked Bayh who is in the new coalition. Bayh said that while a press release on the group's creation included the names of 12 senators, there are "three or four" who don't want to be identified

Emphasis added by me.

MSNBC's First read had this:

"Leading the new group are Democratic Sens. Evan Bayh of Indiana, Tom Carper of Delaware and Blanche Lincoln of Arkansas... [O]thers joining the group are Sens. Michael Bennet of Colorado, Mark Begich of Alaska, Kay Hagan of North Carolina, Herb Kohl of Wisconsin, Mary Landrieu of Louisiana, Joe Lieberman of Connecticut, Claire McCaskill of Missouri, Ben Nelson of Nebraska, Bill Nelson of Florida, Jeanne Shaheen of New Hampshire, Mark Udall of Colorado, and Mark Warner of Virginia."

There is NO equivalent to this on the right. Name one fucking republican who is pubically going on TV talking about obstructing a conservative agenda.

[JW]

I was born during Reagan, so I have yet to experience a government that wasn't a pawn of big corporations.

And you'll die that way too.

You need to pot down your expectations.

[JW]

There is NO equivalent to this on the right. Name one fucking republican who is pubically going on TV talking about obstructing a conservative agenda.

That's the Stupid Party's one saving grace: they can construct one helluva voting bloc, especially when they aren't power (where they should remain).

[R C Dean]

BTW...no free marketeer worth the name supports the concept of a corporation to begin with. As soon as you severe liability from the economic actions of individual human actors by creating a pseudo person to take the fall for their mistakes, you have stepped away from a free market.

A free market admits of any freely entered into contractual relationship. It has no bar to freely entering into contracts, either as an investor, a vendor, or a customer, with a limited liability entity.

In fact, a society that prohibited limited liability entities would be restricting the range of permissible contracts, and would thus have less of a free market than one that allowed them.

[domoarrigato]

I am just noting the irony of a place that claims to respect "free minds" whose inhabitants suspect anyone not buying their fringe applesauce of being a troll or a clone.

All I can say is that if you came here expecting people to agree with your rather bland and doctrinaire liberal viewpoint, you have made an error. As far as being a troll, check the following definition used on this blog. As far as being called a clone, I wouldn't sweat it - figureing out peoples sockpuppets, alter ego's and so forth is a time honored tradition: it has zero to do with you.

[R C Dean]

When did "liberals" officially start favoring "taking tax money from the poor and handing it over to the rich?"

Officially? Couldn't say.

In practice? For as long as I've been alive.

[domoarrigato]

There is NO equivalent to this on the right. Name one fucking republican who is pubically going on TV talking about obstructing a conservative agenda.

nonsense - the majority party always faces defections from it's moderate members. It happened under Gingrich, too. It's the obvious way for moderates to increase their power within the party. The sucessful ones will be bought off with committee chairs.

[JW]

I've never claimed to be infallible. I am just noting the irony of a place that claims to respect "free minds" whose inhabitants suspect anyone not buying their fringe applesauce of being a troll or a clone.

You do realize that you're a blinkered partisan, right? Talk about a non-moving target.

Presuming you're real and not a sockpuppet, you need to bring your 'A' game here as a house liberal. Frankly, you're stuff isn't all that impressive, and this is coming from one of the duller knives in the drawer.

Watch Neu and ChiTom to learn how it's done. Do the opposite of MNG.

[max hats]

I was talking as a whole, not in individual cases. As to why you can't afford a home, I don't think I need to tell you why that is if you've spent any time here.

FWIW, I have a better job than either of my parents did, I've owned several homes and so many more options than I did 20 years ago that it would be tough to list them all.

Do some things cost more than it used to? Sure. A lot costs much less too. Even more didn't exist 20 years ago.

Society as a whole has gone from needing one income to support a family to two, should one wish to avoid a very marginal existence. I don't see any way to spin that as anything but a drop in quality of life.

[Hazel Meade]

Tony, you haven't done your own research. Fannie Mae and Freddie Mac were HEAVILY invested in the subprime market, and a major backer of the mortgage backed securities that started this whole thing.

If you want a serious explanation of why, instead of a non-serious blanket dismissal (without explanation) of why not you can start here:

http://www.nhi.org/online/issues/125/goingsubprime.html

The combined purchases by GSEs in recent years have ranged well over 50 percent of all conventional mortgage activity and this year may hit as much as 71 percent of the market. As a result, Fannie Mae and Freddie Mac have a tremendous degree of influence over which types of borrowers have access to different types of mortgage credit and on what terms.

and here:
http://www.reason.com/news/show/130330.html

and here:
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=all

and here:
http://www.iht.com/articles/2007/06/05/bloomberg/bxmortgage.php

Now, the companies are getting praise in Congress after promising to spend at least $20 billion to keep the mortgage market afloat by purchasing loans made to people with poor credit histories or high debt burdens.

and here:
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626_2.html

In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion -- 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.

But, I know what your response is going to be:
Denial. Denial. Denial.
Fannie and Freddie had nothing to do with it! Right-wing propaganda! FOX News! Rush Limbaugh!

Why don't you take your own advice and actually do some investigating before you repeat the denialist meme being propagated by the left-wing proagandists who are trying to deflect all blame away from the sacrosanct state and it's "affordable housing" policies.

[Tony]

you need to bring your 'A' game here as a house liberal

I'm usually way too inebriated for that to be possible.

[ChicagoTom]

nonsense - the majority party always faces defections from it's moderate members. It happened under Gingrich, too. It's the obvious way for moderates to increase their power within the party. The sucessful ones will be bought off with committee chairs.

So then you should be able to easily point me to moderates who defected under Bush when the GOP controlled the Congress and the WH.

I would love to see someone point to one GOP member who publicly talked about thwarting the conservative agenda while Bush was President.

It' pretty telling that your vague "it happens all the time" had to go back 15 years, no?

[Gilbert Martin]

Bush had a conservate agenda?

When did that happen?

[ChicagoTom]

When did "liberals" officially start favoring "taking tax money from the poor and handing it over to the rich?"

In practice? For as long as I've been alive.

So what RC Dean is saying is that when he calls liberals "socialists" he is being wilfully dishonest.

Good to know RC.

[Hormonal Redhead]

Off-topic, I know, but...

Anyone see where the Fed just announced plans to buy up $300 billion in US Treasury bonds?

http://www.reuters.com/article/bondsNews/idUSN1826341420090318

I haven't had an economics class since high school (in the '80s), but this just strikes me as weird. Anyone have any ideas what the effect might be?

[ChicagoTom]

Bush had a conservate agenda?

That is neither here nor there. Apparently reading is hard.

Evan Bayh is on TV talking about a coalition of Sens to "restrain the influence of party liberals".

My question was did any GOP congresscritter go on TV and talk about "restrain the influence of party conservatives"?

No -- no they haven't. The GOP does not go to the media and show disdain for their base. It just doesn't happen.

[Neu Mejican]

RC Dean,

In fact, a society that prohibited limited liability entities would be restricting the range of permissible contracts, and would thus have less of a free market than one that allowed them.

As long as the liability eventually falls with an actual human, I agree. So, if you signed a contract with me that said you would be liable for my actions, then we are still talking free market.

Incorporation in our world, however, creates a state-sanctioned pseudo person and affords that pseudo person rights similar in scope to the rights of an actual person.

To me this seems to me to go beyond a freely entered contract, and requires a state apparatus of enforcement beyond that which would be needed if only real humans were involved.

No?

[JW]

Society as a whole has gone from needing one income to support a family to two, should one wish to avoid a very marginal existence. I don't see any way to spin that as anything but a drop in quality of life.

You're presuming that both parties don't want to work. How is it a drop in quality of life if the wife doesn't want to stay home and raise the kids? Staying at home is pretty goddamn boring and unrewarding to many people.

Yes, the cost of living has gone up substantially in 20 years. That does not equal being poorer as a whole. I think you and I are defining wealth differently.

[JW]

I would love to see someone point to one GOP member who publicly talked about thwarting the conservative agenda while Bush was President.

Off the top of my head, Jeff Flake and Ron Paul.

[Tony]

Fannie Mae and Freddie Mac were HEAVILY invested in the subprime market, and a major backer of the mortgage backed securities that started this whole thing.

Didn't say they weren't (I believe I said CRA-backed lenders were prohibited).

But it was 2004 when previous restrictions on high-risk loans with the FMs were rescinded in favor of emphasizing increased housing. Indeed, with respect to Fannie Mae, it was that institutions conservative restrictions that led much business to the private subprime market.

I'm not defending those institutions at all. I'm just saying that to the extent their involvement is magnified in order to place the blame on Democrats, you're making a nonsense argument.

[Jennifer]

Society as a whole has gone from needing one income to support a family to two, should one wish to avoid a very marginal existence. I don't see any way to spin that as anything but a drop in quality of life.

I agree, but I think much of this can be blamed on the government. For example: the then-new ranch house where I lived as a child would be illegal to build today, at least in my neighborhood, because it is too small. My area has plenty of snob-zoning minimum-size mandates requiring new homes to be enormous, and built on gigantic lots, and then city council forms task forces to wonder why poor people can't afford to buy 3,000 square-foot homes on one-acre minimum lots.

And college costs wouldn't have risen so fast if not for guaranteed student loans; colleges know they can raise tuition as high as they want, and government will merely increase the loan size for the students. All these stupid oversized subprime mortgages wouldn't be an issue if the government hadn't backed them up. Ad infinitum.

[Neu Mejican]

JW,

Well, yes, but that wasn't the point. We have access to a whole host of technologies that we didn't in 1980 (or pick any random date). We live longer and have more leisure time, just to cite a couple data points.

I am not so sure I believe either of those claims. AFAIK, Life expectancy in the US flattened out in the mid 80's, and leisure time has decreased.

I could be remembering incorrectly...feel free to show me some data to overturn that impression.

[Preacher]

"I haven't had an economics class since high school (in the '80s), but this just strikes me as weird. Anyone have any ideas what the effect might be?"

Perhaps they hope to drive up their stock price. 😉

[Preacher]

"
No -- no they haven't. The GOP does not go to the media and show disdain for their base. It just doesn't happen."

They don't have to; the media distains the base for them. For free!

[Neu Mejican]

JW,

Yes, the cost of living has gone up substantially in 20 years. That does not equal being poorer as a whole. I think you and I are defining wealth differently.

I don't think, based on this, that you are defining wealth at all.

Some adjustment for inflation needs to be done. Equating cost to number of man hours worked for a specific item would be one way to go (I think that is what max hats is trying to do).

[mike]

It would be nice if shareholders actually had rights and could vote in an unrigged election but the current state of affairs makes it next to impossible to remove a board or effect any meaningful change on corporate policy or management.

[Tony]

Yeah a few new trinkets do not make an increased quality of living.

The correlation here should be trivially obvious: more progressive tax rates = bigger middle class = higher aggregate standard of living. Life expectancy and earnings have flatlined or gone down since the 80s despite an increase in worker productivity. And this is just comparing the U.S. with the U.S. Start comparing us with other industrialized countries and it becomes even more embarrassing.

Everyone knows who's to blame and whose policies are responsible for this pathetic record and that's why a black socialist got elected in a landslide.

[Gilbert Martin]

"That is neither here nor there. Apparently reading is hard."

No reading isn't hard. You said this:

"I would love to see someone point to one GOP member who publicly talked about thwarting the conservative agenda while Bush was President."

Any GOP member who wanted to thwart a conservative agenda didn't NEED to say anything
because there was no conservative agenda going on that needed to be thwarted to begin with.

[max hats]

Yes, the cost of living has gone up substantially in 20 years. That does not equal being poorer as a whole. I think you and I are defining wealth differently.

"Quality of life" can be subjective, but I think if it takes more labor to purchase the same level of goods 20 years later, then it is objective fact that wealth (or more properly, relative income) has declined. Basic costs of life - transportation, housing, education, medical care - have all sharply risen in relative cost over the past few decades, and average incomes have not risen in commensurate fashion. Consequently, the average American has become relatively poorer. Nokia phones do not substantially change the situation.

[robc]

Anyone even referring to Fannie Mae and Freddie Mac as a major cause of the crisis

Tony, you are an idiot. F&F != CRA.

They existed well before the CRA and they were causing problems well before the CRA. F&F via subsidies led to a misallocation or capital, which, combined with Fed loose money policies following the Tech crash led to a bubble in housing.

That is it. The root cause of the problem. Yeah, from that point on, the idiotic financial companies mispriced the MBOs and CDSs, but without the bubble that doesnt matter. The root cause was government action. And the blame is fairly shared by the Rs and Ds.

[Robbie]

Tony: "Yeah a few new trinkets do not make an increased quality of living."

Look at consumption spending or discretionary spending now versus 20 years ago. We have lots more money to spend on stupid shit and do spend more on stupid shit than we used to. Without being able to survive more easily we couldn't afford the stupid shit. IE - if a house costs less of my income I can buy an HDTV more easily.

Tony: "The correlation here should be trivially obvious: more progressive tax rates = bigger middle class = higher aggregate standard of living."

That is not remotely true.

Tony: "Everyone knows who's to blame and whose policies are responsible for this pathetic record and that's why a black socialist got elected in a landslide."

Can people stop saying he won in a landslide? It was 53 to 46 or something. A decisive victory, but not a landslide.

http://en.wikipedia.org/wiki/US_Presidential_Election_1932 - Landslide.

http://en.wikipedia.org/wiki/United_States_presidential_election,_1972 - Landslide.

[Reinmoose]

Derr you need more money to keep up with the joneses these days.

I would contend that you could do very well for a family these days if you didn't *need* to buy all this shit. There is infinitely more to consume now than there was 30 years ago, and by and large, the stuff is better. The average family today may have 2 incomes, but look at all the shit they buy with it!

Most families don't have 2 incomes so that they can sit at home at night and do nothing, and make lentil soup. They go out to eat, have 2 cars, flat screen hi-def tvs, cable, high speed internet, family cell phone plans, buy their children all kinds of clothes, get their netflix movies in the mail, sit in a starbucks and comment on blogs on their wifi laptops while drinking a $4 lattee...

I'm sorry, I just don't buy it.

[Eric the .5b]

I'm willing to suspend judgment until we're not in the middle of a crisis.

Yes, that worked so great for this country under the last president.

[robc]

Equating cost to number of man hours worked for a specific item would be one way to go

I think equating costs in terms of ounces of gold is easier and works just as well (although it fluctuates wildly so you have to average a bit).

In many ways, we are still on a gold standard.

[Hazel Meade]

But it was 2004 when previous restrictions on high-risk loans with the FMs were rescinded in favor of emphasizing increased housing. Indeed, with respect to Fannie Mae, it was that institutions conservative restrictions that led much business to the private subprime market.

This is nonsense. The GSEs have had "increasing housing" as part of their mission since they were created. They were reducing loan criteria back in 1999 according to the NY times article.
They had quotas starting in the mid-1990s.

here's a technocal paper describing, analytically, the effect of the quotas on increasing subprime lending:

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V89-48N30MM-2&_user=56761&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000059541&_version=1&_urlVersion=0&_userid=56761&md5=68d917493947760212f0e48d919b66dc

Received 18 March 2002;
Revised 10 March 2003;
accepted 12 March 2003.
Available online 21 May 2003.

Abstract

In the 1980s, housing market analysts and policymakers were concerned that Freddie Mac and Fannie Mae were not adequately facilitating the financing of affordable housing for low- and moderate-income families. To address these concerns, the Department of Housing and Urban Development established quantitative Affordable Housing Goals requiring the Government Sponsored Enterprises (GSEs) to increase their purchases of mortgages originated by low- and moderate-income households and for homes located in low-income neighborhoods. Our analysis indicates that the goals increased the supply of mortgage credit available to low- and moderate-income households, after controlling for other mortgage market factors. Our analysis suggests that the increase in the supply of low-income mortgage credit occurred primarily in 1998.

From the Journal of Urban Economics

[Hormonal Redhead]

"Perhaps they hope to drive up their stock price. ;-)"

Heh. 🙂 I guess what I'm unclear on is, does this expand the money supply or contract it, or does it have an effect at all? As I understood it, Treasury bonds are sold to finance US gov't debt, so buying them back should decrease the national debt, right? But what is the Fed buying them with? More $$ hot off the presses?

It all just seems incestuous to me.

[Hazel Meade]

And just to repeat from the NY Times article ...

http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=all

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: Thursday, September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

2004? Hah!
Get out of your conventional narrative Tony, there's a wide, wide world out there full of all sorts of information you don't know about.

[max hats]

They go out to eat, have 2 cars, flat screen hi-def tvs, cable, high speed internet, family cell phone plans, buy their children all kinds of clothes, get their netflix movies in the mail, sit in a starbucks and comment on blogs on their wifi laptops while drinking a $4 lattee

With the exception of the high def tv, most of those frivolous luxuries you mention are actually very cheap. And families had entertainment 20 years ago too. As an occasional collector of vintage audio, I can tell you that the relative cost of (at least audio) electronics has, from what I've seen, declined sharply.

[robc]

computer prices have also declined sharply.

[R C Dean]

So what RC Dean is saying is that when he calls liberals "socialists" he is being wilfully dishonest.

When did I do that?

To me this seems to me to go beyond a freely entered contract, and requires a state apparatus of enforcement beyond that which would be needed if only real humans were involved.

No?

No. You should be able to enter into agreements with associations of persons, entities, call them what you will. A state that prohibited such arrangements and allowed you to contract only with flesh and bone human beings would be restricting your freedom to contract.

Incorporation in our world, however, creates a state-sanctioned pseudo person and affords that pseudo person rights similar in scope to the rights of an actual person.

Any organization, association, group, etc. would be a "pseudo-person" as a party to a contract. Any particular corporation is, itself, a voluntary association of its investors. Anyone who contracts with it does so freely and presumably with knowledge that it is a limited liability entity. In most states, a corporation loses its limited liability status if it conceals or doesn't adequately disclose its nature as a limited liability entity.

I don't see any inconsistency with free market principles and allowing individuals to contract with entities in general, or limited liability entities in particular.

Does the fact that corporations are (also) creations of state law negate this? I don't see how. Much of corporate law is, really, a form of contract and agency law, setting forth ground rules for relationships involving corporations. I don't think having baseline rules for contracts in state law means that contracts lose their free market status.

Most of the rest of corporate law grows out of their limited liability status, including the requirement to register them with the state. Since the advent of "free incorporation", that is pretty much the role of the state - as a central registry of corporations. The "state sanctioning" is really no more than a state registration requirement if you want to qualify as a limited liability entity.

There really is no meaningful "state apparatus of enforcement" necessary for corporations above and beyond that which is necessary for partnerships, contracts, agency, liability, etc.

[robc]

If you spend as much time on the computer as I do, that is a clear sign that standards of living have gone up. Can you imagine how much it would have cost in 1965 for all of us to have this discussion?

[Pro Libertate]

Corporate charters are good things. Without some form of limited liability, few would invest in businesses of any size. A lot of the economic growth we experienced over the last two centuries came from the more liberal view of corporations.

All that said, I'm not suggesting that the system doesn't have flaws. Management should be held accountable for much of what it does. Shareholders should have more power than they do, though they cede some of that power to get limited liability in the first place.

[JW]

I could be remembering incorrectly...feel free to show me some data to overturn that impression.

Neu--Nope, I can't show you anything. I post from work and now I'm going home, to the gym first, then putting the kids to bed and then getting some dinner, so I'll be offline for the next 3-4 hours and I probably won't be back on tonight anyway since it'll be pushing 10 PM by then and well, there's Lost to watch (Tivo'd!) and beer (US microbrew) to drink.

Not avoiding your questions, but I simply don't have the time to back up my assertions with research. We'll just have to leave it where it is.

[Paul]

Oh, by the way, on NPR this morning, Robert Reich-- yes, that Robert Reich-- actually said that the way the government is handling this bailout could become the biggest "fiasco in US history".

My only response was "could be?"

[shecky]

I read that quote a few times over. I'm not enough of a rhetorical contortionist to be outraged.

[Pro Libertate]

Maoist Robert Reich said that? Wow. Maybe he forgot that Bush wasn't in office. Or maybe he feels betrayed that Obama hasn't announced that it's the Year Zero yet.

[ChicagoTom]

Any GOP member who wanted to thwart a conservative agenda didn't NEED to say anything
because there was no conservative agenda going on that needed to be thwarted to begin with.

Gilbert Martin

Again that's not the point. The need to do X or Y has nothing to do with going out on TV and bashing the base.

You can dodge and duck all you want, but the bottom line is that there are NO GOPers out there publically advocating ways "constrain the influence of party" conservatives. There is no equivalent to teh coalition Evan Bayh is touting on the right. It just doesn't exist.

Keep refusing to admit it, but it is true nonetheless.

The GOP PUBLICLY EMBRACES their base and the fringe conservatives (at least publicly regardless of how they actually govern) the Dems on the other hand are constantly publicly distancing themselves from the liberals.

[ChicagoTom]

Corporate charters are good things. Without some form of limited liability, few would invest in businesses of any size. A lot of the economic growth we experienced over the last two centuries came from the more liberal view of corporations.

If the worry is people would be afraid to invest, then why not make the shareholders exempt from liability but make the CEOs and the executive Board liable? The people who make the decisions should have some skin in the game.

That seems to be the problem. The executives don't have a real ownership stake. If shit goes south they lose the value of their shares but any profit they have taken out of the system (by hook or by crook) is protected.

[Kolohe]

Society as a whole has gone from needing one income to support a family to two, should one wish to avoid a very marginal existence. I don't see any way to spin that as anything but a drop in quality of life.

I see it as a side effect of middle class and upper class women now being able to enter the workforce at their discretion. You want to deflate prices so as to return to viability of the single income household? Tell Rosie to turn in her rivet gun. (which would also reverse some long term trends in health care and education, as intelligent women would be back to only being able to have an occupation in those fields, and thus improve quality while reducing expenses)

[Quick Question]

Right this minute, Obama is speaking to a California crowd that keeps frequently interrupting his "The Evil Rich People" speech with "We love you" and "OBAMA! OBAMA! OBAMA!"

When is this bitch going to stop campainging and run the country?

[Quick Question]

Oh may Gawd! He just took his jacket off for the Q&A!

[Naga Sadow]

@ Quick Question,

Fireside chat bro . . . modern style.

[Neu Mejican]

RC Dean,

You should be able to enter into agreements with associations of persons, entities, call them what you will. A state that prohibited such arrangements and allowed you to contract only with flesh and bone human beings would be restricting your freedom to contract.

You're the lawyer, certainly, but I think we are talking past each other a bit.

The idea of a collective entity as an agent with rights seems to fly in the face of most of the free market principles I see espoused around here. Contracts are agreements between people...it requires additional conceptual apparatus to include abstract corporations as parties to contracts.

As you say above, once you agree to the concept that non-human entities can enter a contract, you need additional state involvement..."setting forth ground rules for relationships involving corporations..." in order for those contracts to be meaningfully enforced.

In a stateless society, I would not accept a corporations claim that the human agents who acted in its behalf were not liable for the harms they caused me...I would sue the individuals. With a state involved in the economy setting the rules for incorporation, I sue the pseudo person because the rules say that the human agents are not liable.

[max hats]

I see it as a side effect of middle class and upper class women now being able to enter the workforce at their discretion.

You're going to have to explain to me how women entering the work force (which, by the way, is hardly a recent phenomena) have caused the prices for housing, medical care, education and other basic commodities to rise so sharply. To the extent there is a cause and effect here, I think you might have cause and effect a bit backwards.

Women were in the workforce in 1980, 1990, and 2000. The rate at which women have been in the workforce does not track to the rise in expenses.

[MNG]

I think as usual the media and politicians do a poor job of giving us the whole story on this type of thing. How many of these bonuses were the result of standing contracts? They need to be paid as a matter of contract. And I heard today that many of them are retention bonuses for good employees that had nothing to do with AIG's nuttier transactions and are seen as vital to the company winding up its affairs and going on, which the government presumably gave them so much of my money for. I can understand the gut reaction, but this kind of stuff makes for a nuanced situation.

Now don't get me wrong: I've long advocated for empowering stockholders relative to the management of corporations because as an empirical matter management seems to be able to engage in some serious principal-agent bending over the shareholders with results that make corporations less competitive, productive and yes, profitable (and I don't see anything wrong with that, yes) for the shareholders than they could be.

[Neu Mejican]

RC Dean,

Sorry about messing up the tags.

The main point, in an anarchy, there would be no corporations with limited liability.

Their might be free associations that agree to cover your back if someone makes a claim against you while you are acting on the behalf of the group, but that seems, to me at least, like a distinct concept from the modern pseudo personhood granted to the group in laws of incorporation.

[MNG]

"You're the lawyer"

RC Dean is a lawyer?

Mein Gott!

[Neu Mejican]

MNG,

The outrage is, I think, aim at the fact that some of these bozos had contracts which gave them multimillion dollar bonuses for actions that tanked the company. The outrage comes from the fact that this kind of contract exists in the first place.

Of course, some of the retention bonuses are going to people no longer with the company.
And some are going to people who screwed the company of BILLIONS of dollars through their poor decisions.

[MNG]

I've always thought of limited liability as what you get for agreeing that you will have no management role in the association.

Until these monstrous bastards known as LLC's were created by states racing to the bottom to attract businesses. All of the advantages of a corporation, none of the drawbacks. Wheeee!

[Neu Mejican]

MNG,

A Harvard educated lawyer, iirc.

[Preacher]

"Heh. 🙂 I guess what I'm unclear on is..."

It was meant as a joke. That's a primary reason why corporations buy back stock.

[MNG]

At one time the public and AIG shareholders thought the company was doing good and so thought that they should make such contracts. To the extent there was deception going on to create that impression then it was outrageous. But if I give you a contract based on your excellent recent performance and then you do a crappy job, I still have to follow through on my contractual promise (though of course I shouldn't re-up you, or not for anything like what I did when you were doing well).

There is also this idea that even if you are doing bad you won't get out of it if you are known as a place that does not reward good management because then those folks won't come work for you to help bail you out...

And of course, as I mentioned, management can often play holders like a fiddle....

[MNG]

"Even Harvard makes mistakes."

Woody Allen, Annie Hall

[MNG]

I guess there really is a strong affirmative action program at Harvard Law...

[Preacher]

"Or maybe he feels betrayed that Obama hasn't announced that it's the Year Zero yet."

BOA: Before the Obama Era

AOE: After the Obama Era

Reason,

Please adjust your date/time stamps accordingly. Thank you in advance of your efforts.

Regards,
Preacher

PS I'm hearing on The News Hour that the treasuries are being purchased to print another $1T. They're saying the plus side is that it will drive down long-term interest rates. In fact, they fell today.

[MNG]

The next thing you're gonna tell me is that Gilbert Martin is a chemist.

Or bipedal.

[Preacher]

"The GOP PUBLICLY EMBRACES their base and the fringe conservatives (at least publicly regardless of how they actually govern) the Dems on the other hand are constantly publicly distancing themselves from the liberals.

- Supporting Card Check
- Fed funding of embryonic stem cell research
- Fed funding of abortions in developing countries
- Ending school vouchers in Washington D.C.
- Closing Gitmo
- Ending military tribunals for people formerly known as unlawful combatants

Nothing to see here. Move along.

[MNG]

Preacher
Fed funding of embryonic stemm cell research and closing Gitmo are pretty mainstream.

[MNG]

And the Dems don't embrace fed funding for abortions in foriegn nations. Even if that is what they do, I never hear them say to the public "We support funding for abortions overseas!" For that matter they don't trumpet (embrace) "closing down school vouchers in DC" either...

[Kolohe]

(which, by the way, is hardly a recent phenomena)

By historical standards, middle class and upper class women in the workforce is a recent phenomenon (but only to the extent that middle class is a recent phenomenom; and I acknowledge that poor/working class women have always been in the workforce from time immemorial. and a further caveat is that we are talking about industrial economies and not agrarian ones)

I can't link directly because it's a script but here you can get employment trend data for the last half century plus some. Female employment ratio has gone up consitently at an average of 5% per decade from 1948 (30.1%) to 2009 (57%), with some brief retraction during recessions. In contrast the male particpation rate has declined from the high 80's to the low 70's.

I agree first that correlation is not causation. But I find the hypothesis sound, if unproven that the proliferation of middle to upper class two income families (and women acheiving pay parity for equal work) has made single income families uncompetitive. Two income families are able to bid up the price of stuff (esp stuff subject to whathisfaces cost disease) that prices single earner households out of the market for the same items. And there is the fairly uncontroversial observation that single parent households tend to be more prone to outright poverty than two parent households.

And in fact the causation may work in reverse as both you and I alluded to. When you could pay teachers and nurses substandard wages for above standard work, because that's the only thing an educated women was allowed to do, you did some societal benefit in terms of better schools and cheaper health care.

(let me insert here the what I would think is a self evident point that it's better to be in society with emancipated women than without)

It's odd that you pick 1980 as your reference point. That's around when my parents (single income earner household) bought the house they live in now. And indeed as an inner suburb home it has increased in value to the point where they could have never afforded it later. But they were on the bubble of being able to afford it then. Interest rates were double digits (or close to it), and dad was lucky to have a job; lotsa people didn't. It's odd lately that many liberals are pointing to the late 70's as this idyllic time of middle class life that Regan/bush/clinton/bush ruined. Maybe. But the 1980 I remember was not the one where things were so great for the middle class that Carter got re-elected in a landslide followed by a serious push to repeal the 22nd

[Kolohe]

The rate at which women have been in the workforce does not track to the rise in expenses.

To reitterate, because I bounced around longwindedly before:

My hypothesis does rest on the fact that there has been an overall sector shift in the workforce between homemaker and professional employment. And as far as we've been going the 'last mile' since 1980 on this, one thing that has changed dramatically but only since 1980 is that pay discrimination against women is no longer widespread (Ms Leddbetter notwithstanding)

[Neu Mejican]

It's odd lately that many liberals are pointing to the late 70's as this idyllic time of middle class life that Regan/bush/clinton/bush ruined. Maybe. But the 1980 I remember was not the one where things were so great for the middle class that Carter got re-elected in a landslide followed by a serious push to repeal the 22nd

People's memories are odd that way.

Of course the same thing happens when people talk about how bad things are now by pointing out that this is AS BAD AS the recession of the early 80's.

I don't remember civilization collapsing then.
It won't collapse now.

[Preacher]

"And the Dems don't embrace fed funding for abortions in foriegn nations."

Just for the public record, specifically, what do the Dems "embrace"?

[Neu Mejican]

Some thoughts from HufPo that are on topic:

But let's be clear. The companies and traders and executives who are getting our money have no right to it. AIG and its swap "customers" made massive bets, and they all lost. By all rights, they should pay the price. AIG's swaps should be worthless and the companies that foolishly relied on them should be learning that before you make bets of that size, you should consider the possibility that the loser won't be able to pay off. The traders who sold the swaps would discover that they have bonus contracts enforceable only against an empty shell of a company. In a free market, sophisticated, wealthy individuals and businesses, all of whom are in the business of understanding these kinds of transactions, have no claim on our sympathy or our money.

There is a certain logic here.
It seems AIG should pay off its obligations in an ordered fashion. Once it has paid off the tax payers, then it can start meeting the contractual obligations it entered with these employees.

Not that the contracts should be ignored, but triage seems to be in order.

[Preacher]

"There is a certain logic here.
It seems AIG should pay off its obligations in an ordered fashion. Once it has paid off the tax payers, then it can start meeting the contractual obligations it entered with these employees.

Not that the contracts should be ignored, but triage seems to be in order."

That's what bancruptcy is designed to do.

AIG is "too big to fail".

And yet,

The USA isn't.

[Pro Libertate]

Well, boards and management can be found personally liable. The question is whether their business decisions were reasonable at the time they made them, and courts give a good amount of discretion to those choices. Which means that shareholders often get screwed when they do try to take legal action.

Plenty of executives have been found liable for various crimes and torts, so it's not like they all get a free pass. And most executives who have a clue to how exposed they are (esp. with public companies) spend a lot of time looking over their shoulders.

[@]

Nancy Pelosi has just announced that she will introduce legislation tomorrow to tax the AIG bonuses at 90%. This is being done, of course, "to strengthen our economy and create jobs." The tax will be highly selective:

The bill would apply a separate income tax rate of 90 percent to bonuses received by individuals from companies which have received at least $5 billion from TARP. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.

For this purpose, bonuses will be defined as any retention payment, incentive payment, or other bonus which is in addition to regular employee compensation payable on a periodic basis.

The special tax rate only would apply to individuals and families with overall income (including income other than bonuses) in excess of $250,000.

The good news there, I guess, is that the new tax covers Fannie Mae and Freddy Mac. That shows it's bipartisan, right? Because it would apply to the more than $50 million in bonuses that Fannie Mae paid to Obama adviser Franklin Raines, right? Not quite:

The bill applies to payments received after December 31, 2008.

So much for Fannie and Freddy. I'm guessing the only company that fits the statute's description is AIG. It's pathetic, but it shows how desperate the Democrats are getting, no doubt in part because they've seen these numbers.

[MJ]

"The problem is libertarians are apologists for corporate welfare, so this won't do at all."

"We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth. That involves making investments on health care and energy and education."

Tony, when a politician talks about investing in cetain market sectors such as the quote above, he's talking about increasing corporate welfare, by any reasonable definition of the term. Democrats love corporate welfare, it gives them leverage over industry.

[jk]

@:
So much for Fannie and Freddy. I'm guessing the only company that fits the statute's description is AIG. It's pathetic...

The Dems are having their own Terri Schiavo moment.

[MNG]

Pro
I'm talking more about how elections of directors works. Management can often make these elections come out how they want. They run the election, their candidates win on the board, then the board blesses raises for all the management.

The important thing for holders (the principal) is to be able to discipline the management (the agent), i.e. by firing them for not doing their duty to them to their fullest...

But yes, the business judgment rule is pretty wide and that hurts holders too, as well as some of the difficulties of derivative suits are important too.

[Preacher]

Obama, today, re AIG:

The same is true with AIG. It was the right thing to do to step in. Here's the problem. It's almost like they've got -- they've got a bomb strapped to them and they've got their hand on the trigger. You don't want them to blow up. But you've got to kind of talk them, ease that finger off the trigger.

[Hazel Meade]

Neu Mejican:

The HuffPo article isn't far from the mark. That's why AIG should be inbankruptcy. Putting AIG in bankruptcy would put a judge in charge of administering the liquidation of AIGs assets in a fair way. At no cost to taxpayers.

But instead, we get a situation where the legislative and executive branches have basically done a power grab, have seized bankruptcy authority from the courts and are basically doing a giant half-assed bankruptcy where opinion polls and back-room deals are determining who gets paid off and who doesn't.

[Preacher]

"It's almost like they've got -- they've got a bomb strapped to them and they've got their hand on the trigger. You don't want them to blow up. But you've got to kind of talk them, ease that finger off the trigger."

So 911 WAS an inside job. Goddam Wall Steet! They're the real suicide bomers.

[Preacher]

"The important thing for holders (the principal) is to be able to discipline the management (the agent), i.e. by firing them for not doing their duty to them to their fullest..."

Happens every day. Obama should look into that.

Oh, and maybe do the Grassley thing.

[Gilbert Martin]

"The next thing you're gonna tell me is that Gilbert Martin is a chemist"

I already know what you are, MNG - regardless of your nominal "occupation".

[Brandybuck]

My question was did any GOP congresscritter go on TV and talk about "restrain the influence of party conservatives"?

Liberals like to think that conservatives are all homogenous clones listening to Limbaugh for marching order. They think there is no difference between Rothbard and Strauss. The truth is that they're every bit as varied as liberals. Ron Paul has been out there talking about restraining the Neo-Conservative leadership ever since he got back in office. If you attend local Republican meetings, there's quite a bit of talk about restraining the social-cons.

[brotherben]

Brandybuck, perhaps my view is limited here in Alabama. Around here, neo-con, social con, republican and christian are all the same thing. If you aren't with them, you're just wrong, and your opinon doesn't matter. The southern baptist vote is a substantial part of the republican party in this part of the country.

[juris imprudent]

The Prez sez The business models that created a lot of paper wealth but not real wealth in the country...

[pulls pin]

So wouldn't the gold standard solve this?

[runs away]

[jasa]

No. Bush put his phaser on "Premptively Fuck Up the Obama Administration", aimed it at the Whitehouse, and then pulled the trigger as he boarded Marine One for the last time.

Yeah, he did. That fucking phaser spewed TARP all over the place. 😉

Hazel: nice posts. All of them.

[prolefeed]

Tony | March 18, 2009, 4:35pm | #

I'm willing to suspend judgment until we're not in the middle of a crisis.

You do realize that you're supporting people who have publicly stated that no crisis should go to waste?

They will always find something and label it a crisis, assuming they don't fuck things up so bad that we never do get out of a "crisis" until their sorry asses are booted out of office.

Recession =/= crisis

[jasa]

The executives don't have a real ownership stake. If shit goes south they lose the value of their shares but any profit they have taken out of the system (by hook or by crook) is protected.

QFT.

And it's worse than that. The executive typically has options that cliff vest on material control change. He leaves and then dumps all his shares. Because it's a fat lump of shares it depresses the share price right there. Then when the market figures out what a mess he left behind, the shares take another dive.

Been there, seen that, up close and personal. The current cozy club that many CEO's and board of director's enjoy promotes corporate malfeasance. Given the size of many potential golden parachutes there is a strong incentive to ignore fiduciary duty to the company.

[seriously]

By his own words all of Congress should be paying and not getting paid.

It's hilarious he and Congress are outraged since they are responsible for the whole bonus situation at hand.

[Tony]

You do realize that you're supporting people who have publicly stated that no crisis should go to waste?

Uh, yeah. I agree with them. This country needs a good liberal kick in the ass. I mean getting universal healthcare, some sort of approach to global warming, and end to the recession, and, oh yes a cure for cancer, is almost as good as using a crisis to invade another country illegally and torture people!

[Lefiti]

This country needs a good liberal kick in the ass. I mean getting universal healthcare, some sort of approach to global warming, and end to the recession, and, oh yes a cure for cancer, is almost as good as using a crisis to invade another country illegally and torture people!

Yeah, man, maybe we should send some of those AIG execs to Guantanamo and torture them until they tell us how to defuse that ticking timb bomb!

[Obama, Ready On Day One]

:|Q

[Tif]

@Tony

u said:
"Uh, yeah. I agree with them. This country needs a good liberal kick in the ass. I mean getting universal healthcare, some sort of approach to global warming, and end to the recession, and, oh yes a cure for cancer, is almost as good as using a crisis to invade another country illegally and torture people!"

Who are you arguing with here? I would assume most people on here would consider themselves Libertarians, ascribe to no political party, opposed the war in Iraq and don't like torture. Why then are you making arguments like this is a Republican message board party?

[MNG]

"But instead, we get a situation where the legislative and executive branches have basically done a power grab, have seized bankruptcy authority from the courts and are basically doing a giant half-assed bankruptcy where opinion polls and back-room deals are determining who gets paid off and who doesn't."

Good point Hazel, if they were allowed to go into bankruptcy these paying bonuses might be put after their creditors, but them going into bankruptcy would have happened had we not gave them the chunk of "change" we did (in fairness to Obama I guess it started before he took office).

[Gilbert Martin]

"It's hilarious he and Congress are outraged since they are responsible for the whole bonus situation at hand."

Indeed.

Obama's faux outgage is merely an attempt at misdirection to divert attention from the fact that Congress specifically authorized those payments and he signed the legislation. It was all known about beforehand. It was only when some publicity starting leaking to the general public about it that Obama and the blowhards in Congress started bellowing about it and trying to point the finger at someone other than themselves.

Furthermore, there are bonuses being paid at Fannie Mae and Freddie Mac. I don't hear them bellowing about that. If they want to "take back" compensation from people they can start with Franklin Raines, the former head of Fannie Mae. He was up to his neck in accounting fraud shennanigans at that institution and he basically got to skate with about $90 M in compensation. The Dems were falling all over themselves to defend Raines and Fannie Mae.

[Pro Libertate]

I think board independence is a little stronger in general since the wave of corporate scandals in the early Aughts. I suppose some of that is due to SOX, but I think it has more to do with larger shareholders being concerned about unchecked management.

Boards scare management in the public companies that I've work for, but it's kind of like Congress checking presidents--they can do it, but they don't opt to very often.

[R C Dean]

If the worry is people would be afraid to invest, then why not make the shareholders exempt from liability but make the CEOs and the executive Board liable?

CEOs and Board members are personally liable for the consequences of their actions. They are not personally liable for the actions of others. Is there a problem with that?

The idea of a collective entity as an agent with rights seems to fly in the face of most of the free market principles I see espoused around here. Contracts are agreements between people...it requires additional conceptual apparatus to include abstract corporations as parties to contracts.

Not really. If you think the government can be a party to contracts, why not other "abstract corporations" ? I just don't think there is such a big conceptual leap from allowing individuals to contract with each other, to allowing individuals to contract with groups of individuals, be they associations, partnerships or corporations.

The main point, in an anarchy, there would be no corporations with limited liability.

In true anarchy, there would be no enforceable liability rules at all, so the concept of limited or unlimited liability would never come up.

[jasa]

CEOs and Board members are personally liable for the consequences of their actions.

You want to expand on that a bit, RC?

If board members allow the executive staff ridiculous golden parachute packages, and the executives, lacking proper motivation, commit malfeasance, who gets sued? I think the answer is "the company", but I'll let you explain.

[Neu Mejican]

RC Dean,

Not really. If you think the government can be a party to contracts, why not other "abstract corporations" ?

Government is a process, not an entity...the community would be the party in those contracts...it seems.

I just don't think there is such a big conceptual leap from allowing individuals to contract with each other, to allowing individuals to contract with groups of individuals, be they associations, partnerships or corporations.

Corporations are not "groups of individuals" but abstractions of law that exempt groups of individuals from personal liability for their actions. That is the conceptual leap.

In true anarchy, there would be no enforceable liability rules at all, so the concept of limited or unlimited liability would never come up.

I disagree. Liability would be enforced person to person. Unfortunately, the person with the greater ability to use force would win the day...

[G4m3th30ry]

Not sure if this will be read due to the late hour of this post, but most businesses in general have a large issue about how they can use incentives that flow more with long-term growth than short term growth.

I think most corporate issues can boil down to the fact that bonuses and such are paid out for sort term gains.

Having said that, the issue is what incentives would work for long term gain? Should an exCEO continue to get money based upon profits of a business they no longer run?

I mean, there is an inherent incentive for long term growth as most employees want their companies to succeed long term only to continue to have a job. But most bonus/commission incentives are by their very nature focused on short term gains.

Not saying I have an answer, but it's certainly part of the equation as this continuing process seems to have removed a percentage of corporate leaders from ever looking too far off...

On - & tony - you're just too funny. You're whole "libertarians are this" and "dems are gods" shtick is absolutely hilarious. It's almost as if your posts are an attempted prelude to an anti-Colbert show.

[JB]

"My question was did any GOP congresscritter go on TV and talk about "restrain the influence of party conservatives"?

Umm, "conservatives" have no influence in congress, Tom. When they did John The Mavericky One McCain, Lindsay Graham and the usual RINO suspects performed the same task.

[JB]

"Uh, yeah. I agree with them. This country needs a good liberal kick in the ass. I mean getting universal healthcare, some sort of approach to global warming, and end to the recession, and, oh yes a cure for cancer, is almost as good as using a crisis to invade another country illegally and torture people!"

That's not an agenda, that's a wishlist in never-never land.

Let tax the shit out of the consumer AND end the recession. Pure fucking genius. I guess it takes really special people to make A + (-A) = 2A.

[abass]

Influence can be defined as the power exerted over the minds and behavior of others. A power that can affect, persuade and cause changes to someone or something. In order to influence people, you first need to discover what is already influencing them. What makes them tick? What do they care about? We need some leverage to work with when we're trying to change how people think and behave.

http://www.onlineuniversalwork.com