AIG is Our Economic Poster Child
Let's see, who else can we bail out? We (our government) are bailing out everyone but me.....somebody who really needs it. We have managed to bring our open market system to the doorstep of socialism by bailing out everybody lined up at the door for a handout.
Yes, I understand that some of these companies (AIG) have to be bailed out to avoid catastrophe in the U.S. and world economies. But isn't that what is supposed to happen in market economies? Isn't it supposed to be that if you are not conducting your business in a proper and profitable manner then you are overtaken by the competition and eventually go bankrupt and/or close your doors? Unfortunately, greed and a lack of business ethics has led to an economic tsunami consisting of falling stock prices, no available credit/lending and rapidly decreasing real estate sales and prices. This has brought our system to its knees and forced the government to start bailing out banks and other companies at an alarming rate.
The question is, where does it stop? When do we say that this is a market economy with winners and losers and we can't save you? AIG had to be saved because if they went down they would take 70 major companies with them and countless jobs also. Problem is, AIG's survival is still questionable and they are handing out bonuses with no second thoughts until the people cried out. These bonuses are a difficult issue. If we are a market economy then the market dictates an executives pay package. Yes, it looks obscene to the guy making $50,000/year and this executive is getting a $5,000,000 bonus from a company that has been bailed out with the $50K guys tax dollars. I'm sure AIG was legally obligated to pay the bonuses but the government should have had a better handle on this prior to the bonuses being paid out.
But if you don't pay bonuses you can't draw the best executives to run the best companies. That is what is supposed to happen in an open market open competition system. Maybe they are not the best if you look at their performances recently. I am afraid the government is going to get too heavy handed with the conditions connected to these bailouts and this may force the best executives to go overseas and make those companies the biggest, best and most powerful.
Greed is a given in our system but where are the ethics? I wouldn't let my company give me a huge bonus at the end of a year where we were nearly went bankrupt and accepted a huge bailout package from the government. Bonuses dive business at all levels without question. But I do think we need to have very clear simple bonus structures that compensate you fairly and have the executives direct and company's overall performance connected to it.
Personally, the economy is kicking my butt and I have had to make some difficult decisions in my business. I am making cutbacks at home too because home is a business also. The economic times dictate that tough decisions and sacrifices need to be made by people willing to make them. Those not willing, have their heads in the sand or are too paralyzed to make these kinds of decisions will be buried by the economic tsunami.
That's All I Got!
I'm Out!!
44Black
Yes, I understand that some of these companies (AIG) have to be bailed out to avoid catastrophe in the U.S. and world economies. But isn't that what is supposed to happen in market economies? Isn't it supposed to be that if you are not conducting your business in a proper and profitable manner then you are overtaken by the competition and eventually go bankrupt and/or close your doors? Unfortunately, greed and a lack of business ethics has led to an economic tsunami consisting of falling stock prices, no available credit/lending and rapidly decreasing real estate sales and prices. This has brought our system to its knees and forced the government to start bailing out banks and other companies at an alarming rate.
The question is, where does it stop? When do we say that this is a market economy with winners and losers and we can't save you? AIG had to be saved because if they went down they would take 70 major companies with them and countless jobs also. Problem is, AIG's survival is still questionable and they are handing out bonuses with no second thoughts until the people cried out. These bonuses are a difficult issue. If we are a market economy then the market dictates an executives pay package. Yes, it looks obscene to the guy making $50,000/year and this executive is getting a $5,000,000 bonus from a company that has been bailed out with the $50K guys tax dollars. I'm sure AIG was legally obligated to pay the bonuses but the government should have had a better handle on this prior to the bonuses being paid out.
But if you don't pay bonuses you can't draw the best executives to run the best companies. That is what is supposed to happen in an open market open competition system. Maybe they are not the best if you look at their performances recently. I am afraid the government is going to get too heavy handed with the conditions connected to these bailouts and this may force the best executives to go overseas and make those companies the biggest, best and most powerful.
Greed is a given in our system but where are the ethics? I wouldn't let my company give me a huge bonus at the end of a year where we were nearly went bankrupt and accepted a huge bailout package from the government. Bonuses dive business at all levels without question. But I do think we need to have very clear simple bonus structures that compensate you fairly and have the executives direct and company's overall performance connected to it.
Personally, the economy is kicking my butt and I have had to make some difficult decisions in my business. I am making cutbacks at home too because home is a business also. The economic times dictate that tough decisions and sacrifices need to be made by people willing to make them. Those not willing, have their heads in the sand or are too paralyzed to make these kinds of decisions will be buried by the economic tsunami.
That's All I Got!
I'm Out!!
44Black
posted by 44Black at 6:31 AM
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