Blame and Rants

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In a previous post, I listed out several 'ideologies' that I claimed have shown to be defective. After further consideration, I can't blame the theories for the mess, but instead I have to blame their application. For example, on a basis of pure theory, Socialism is an excellent theory if you are interested in bringing improvement to all people of your society. But in order for Socialism to work, you have to have everyone believing that the only way to better themselves is through helping everyone out. The Bible is very good at talking about things like this. That's right. The Bible. Usury is bad, says the bible. I'm rambling. Anyways, Socialism doesn't work. I don't think it ever will work because human beings are selfish creatures by nature, but we like to think we hold ourselves to high standards. While their are many people who do uphold these ideals, overall we far more interested in helping ourselves before others. If you have a truly free market, and the participants of that market want to uphold that market ideal first and then make profit, then free markets will work. But profit always comes first. Take our favorite mustached TV personality John Stossel of 20/20. He had a special on last fall where he tried to explain the more government regulation was bad, and he used Ice Skating and Brian Boitano as a 'politically incorrect' example. Read about his special in his WSJ Op-Ed. I read this and thought, "This is bonkers. It completely misses the point." He is right if the free markets exist and the first priority is to keep the free market healthy and uphold the ideal, which is what the ice skaters were doing by just going around in an orderly fashion. But the current application of the free market doesn't have health as the first priority. The first priority is profit. So what Stossel should have done was have the 100 skaters start skating and then tell them that the first one to make 50 laps gets the $10 million dollars cash that he has in a box next to him on the ice for everyone to see. Oh, and there arent' any rules and no one gets in trouble for anything they do. Then he would have had a bloodbath on his hands. That is how our free markets have been working. Now, if you can guide that market then the benefits are enormous and impressive. But you have to guide it, not let it go whilly-nilly. Too much regulation is bad. Too little is just as bad. Its a fine line, and line that shifts constantly.

I work for a Fortune 500 company, and last fall it was eaten by another company that if it was public would be a Fortune 100 company. A lot of my cynicism has come about from working in a large American corporation. For those of you who aren't in a corporation, just read the Dilbert that I have at the bottom of this blog. That IS corporate America. It's astonishing. What I find so amusing and angering about this crisis is these CEOs and their boards. They folks get paid billions of dollars in compensation. How do they justify this extravagence in compensation? They say that it is because of all the responsibility that comes with their job. Uh-huh. But when crap starts hitting the fan, they throw up their arms and say "Hey, I didn't know about this, it's not my job, blah blah blah" and they defer the blame. So why are they getting all this money if they aren't taking the responsibility that they say they have to earn all that money? How can anyone justify getting paid millions of dollars and then cut 10% of their workforce and then not accept responsibility when things in the company go bad? Why not cut 50% of their pay and use the savings to keep their people employed? THAT is a stimulus. You keep the middle class employed and you look good in the public eye because as the one on top, you are making a service for the benefit of your employees. You are taking responsiblity for their welfare. That's great marketing. This is what a lot of small business owners are doing. They are trying to keep their people employed any way they can. Pay cuts for them are the order of the day. Yet we let our corporate leaders keep their money. It's too much, just too much.

The counter to why don't CEOs take a pay cut is because of the market. The market demands compensation for its investment in public companies. That's true, but the market is or has become very short-sighted. 70% of the American economy depends on consumerism. So if people aren't buying, the economy and all the public companies earnings goes belly up. So isn't it in the long-term interest of the market to keep people employed so consumerism is maintained? Yes, we've been trying to do that in the past 30 years, but we've been buying on credit. But that's the topic of another post.