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The Big Yellow Book

Seeing the World from Both Oculars-- a Bananaslug's Journal

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If you whack them hard enough, they begin to learn...maybe
One of the things that has the American public mad enough to consign the Republican Party to the outer depths, and rise up with pitchforks and torches and nooses tied in rope is the incredible disparity between CEO salaries, bonuses and perks and (a)the wages and benefits of the average worker, and (b)the performance of the companies they lead.

President Obama has already responded to this by insisting that corporations that take Federal bailouts restrict the salaries of their executives. If corporate boards don't start doing this themselves, there WILL be regulation.

"We're mad as hell and we're not going to take it anymore!" is the cry, echoing the Peter Finch character in the 1976 movie Network.

Here's a sign that maybe, just maybe, they're getting it. Forbes.com reports that GE's Jeffrey Immelt, at his own request, will not be getting his bonuses this year.

This begs the question of why it should be a news item that a CEO of a company that lost a bunchaton of money to short term management and really bad mortgages and other financial instruments should even think he was getting a bonus.

But at least, Immelt hasn't pulled a Thain, or an AIG and isn't aping France's King Louis XIV, who famously said, "Apres moi, le deluge."

Contrast this, though, with the behavior of Immelt's opposite numbers in Japan, at Yokogawa Electric Corporation (long known as "the GE of Japan"). Not only are they foregoing bonuses, but most of the senior management of the global electrical and automation products supplier have taken pay cuts ranging from 10 to 30%, and have asked their workers to work a 30 hour week, so that no layoffs will occur.

Social responsibility is window-dressing until corporate boards begin to take it seriously.

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Why ... why do I have this memory of you being much more conservative than this and your previous rant would suggest?

I mean, I have been boiling about the salaries and bonuses of CEOs vs. their achievements since forever ...

*hugs a Slug* Welcome to my world!

I'm still conservative, in the classical sense, but I'm not stupid and I'm not an ideological right wingnut. After all, Eric Flint, that commie pinko, is one of my best friends.

But there comes a time when you have to go after the people doing the dirty deeds. These buggers are to the free market what the Nazi party is to patriotism.

I think one of the structural problems with US corporations these days is the role of mutual funds and the drive for shorter-term gains. Mutual funds wind up owning large chunks of multiple corporations, and vote for policies and executives who will pursue those short-term boosts, often at the expense of longer-term growth.

Of course, I also believe that lobotomies are required for senior management... The same day they sent out a press release about how well our company did in the previous corner, I learned that project bonuses for a project I've been working on for four years were delayed, because upper management didn't want to be seen giving that many people bonuses then, so only the people who weren't eligible for annual bonuses got anything now, the rest of us will supposedly see a larger annual bonus in August. Supposedly.

Here's what the problem is. Insanity is the practice of expecting different results from the same set of actions repeated endlessly. We think we want ethical behavior, but reward profits. The people who go into finance are the brightest students we have in college. They could be engineers or scientists, but they want the money more...and there are no methods to keep sociopaths out of those jobs. So, we make rules, and they spend all the power of their brilliant deviant minds figuring out how to win despite the rules.

We need to instill ethics in the generation after next...it is too late for the previous ones.

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