3 Comments

Greed and Incompetence – 3

I’m Good, Thanks for Asking

 Not everyone on Wall Street is a bad guy.  Most are probably very nice.  The sort of person who you might want to have as a friend.  However, when huge sums of money are at stake, well, ya just never know.  Let’s look at a few of the Wall Street players in this meltdown.

Goldman-Sachs CEO Lloyd Blankfein just took home $24.3 million, as part of a $67.9 million bonus he was awarded.  This man is famous for telling the Senate Permanent Subcommittee on Investigations that Goldman Sachs had no moral obligation to inform their clients that they (Goldman Sachs) were betting AGAINST the product that they were selling!  Stop and mull over that last sentence for a while.  Goldman Sachs KNEW that the product that they were selling was worth s__t.  They were betting that their client would lose money on the purchase.  Forbes Magazine named him “one of the most outrageous CEOs of 2009”.Well, I have not found any reports that Blankfein beats his wife or kicks the dog, so I guess that he has some redeeming qualities.

Goldman’s President Gary Cohn took home $24 million, as part of a $66.9 million bonus he was awarded.  Mr. Cohn was caught advising the Greek government in their attempt at concealing and deferring debt in order to meet criteria for inclusion in the Eurozone.  He was helping Greece to dishonestly represent itself to the European community.

Mr. Stanley O’Neil was the Chief Executive Officer of Merrill Lynch, and Chairman of the Board.  His problems started when he decided that Merrill making $1.03 billion dollars per year was simply not enough.  O’Neil made the decision to have the company plunge into Mortgage Backed Securities.  Merrill Lynch people who warned him that this was dangerous were fired.  By 2007 as the current meltdown in our economy had started, he realized that he made a huge mistake.  He bet the company and lost.  As the crisis had worsened he approached Wachovia Bank about a possible merger – without the approval of the Merrill board of directors.  This led to his firing.  He left with a severance of $161.5 million dollarsNeedless to say, the 30,000 people that he had fired did not get a severance of anywhere near $161.5 million dollars even though Merrill’s disaster was caused by O’Neil – not by the people who were fired.

On January 18, 2008, Mr. O’Neil was named to the Alcoa board of directors, presumably because of his outstanding performance at Merrill.  Stanley O’Neal was named in Time Magazine’s list of the top 25 people responsible for our economic crisis.  Do we think that he is suffering very much?

In 2008, in order to remain as a viable company Merrill Lynch accepted a rescue package from the federal government (YOUR TAX MONEY!).  The Merrill Lynch board of directors promptly paid out ⅓ of the money that they received from the federal rescue package in bonuses.  So, this failing company lost billions yet paid out 3.6 billion dollars in bonuses.  When they were asked for a comment about that outrage, a spokesman said (with a straight face) that Merrill had a lot of talented people and needed to keep them.  Was that a sick joke?  And the formerly middle class workers who lost their jobs?  Darn!  There just wasn’t quite enough remaining to give them any.  Better luck next time.

My advice to you, dear reader, if you meet any of these CEOs, shake their hand but then count your fingers afterward.

These people are on many lists for who should get the blame for the meltdown.  So, look at some of these guys with their private airplanes, private chauffeurs, private this, private that, and ask yourself, what have they contributed to the human race?  What have they contributed to their own company?  What have they done for people who depended on them?  They sure ruined a lot of peoples lives.  Do they care?  Did they ever even think about it?

What good are they?  Well, the only thing that I can think of is that they can serve as bad examples.  But the human race has lots of those.

…and finally, tomorrow, the demonstrators

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3 comments on “Greed and Incompetence – 3

  1. How about new laws preventing Wall Street execs from getting paid upfront bonuses? What incentive do those CEOs have for investing in the long term future of their companies? If they were paid with company stocks that they can redeem later- like 3,4, 5 years later- the greed factor may be reduced somewhat. Matt Damon’s political philosopher character in Rounders had it right: “The key to No Limit Poker is to put a man to a decision for all his chips.”
    Nobody has ever forced all these CEOs to put all their cards on the table.

  2. I like your ideas. However, I think that above greedy people have lots of confidence in themselves and it wouldn’t deter any of them from the same greed.

    I also like the Steve Jobs model of $1.00 per year plus stock options. On the other hand a greedy CEO could make decisions that he knew would look good in the short term, but would be a long term disaster. Maybe that is what the Bush administration did.

  3. The solution may already be at hand with the Occupy Wall Street movement. How to put the fix on the banks and their greedy CEOs’? Identify the bank clients and Twitter the entire world to boycott those companies. Can you imagine a billion people throughout the world boycotting company XYZ for a week, a month? And there could also be specific demands such as return all the fat bonuses or the boycott continues. I would venture to say that if Company XYZ were in peril of collapsing, the bank CEOs’ lives all of a sudden would not be worth a nickel. –It is all very doable.

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