The 6 Pack Economist

I think that what will eventually kill capitalism is these moron CEOs.  Capitalism depends on that the people who are rewarded, are also to take the risk.  But the latest issues with these CEOs who have golden parachutes have thrown the whole system to the wolves.

 I have no problem with the money they were paid per se, what I have a problem with is the amount of money they made with little to no risk.  They screwup and are forced to resign, the company is in ruins and they walk away with a multi-million dollar severance package.  That’s like walking into your neightbors house and throwing your feces on the wall and charging them for painting their house.

 This type of compensation for failure just pisses a lot of people who then vote in a socialist who say that they will take care of everything and tax the rich.  PS taxing the rich never really works.  They tax them which just trickles down to the person who put the socialist in office to begin with.  Which in turn brings more taxes on you etc….  I have whole posts on this crap.

 I would love for these guys to be hung out to dry.  Lets be honest most of these guys are not that smart anyway.  They really do not have some grand talent that makes them really deserve this kind of money. Then again they are not that stupid either they were able to set themselves up in such a way that if they succeed they make money and if they fail they make money and get a vacation.  I guess in the end they are smarter then I am.

 How to solve the problem?  I don’t know.  But rewards for failure should not be part of it.  I think the top salary should be limited.  I know it sounds socialist but the guaranteed pay should be limited.  Everything else should be bonuses.  With something nominal for becoming disabled or whatever, but the principle is simple.  Do good get stuff, do bad don’t get stuff.

 There should also be rewards for post retirement kind of like a five year bonus plan.  One bonus for yearly achievement and then more bonuses for two, three, four, and five year achievement.  This way short term actions that kill the company long run will not be undertaken.  It could be a dividend based system or some other method. 

 Think about it this way.  You go into your neighbor’s house (your neighbor had some bad luck).  You promise to make your neighbor more money this year then your neighbor made last year. They agree (we are going to pretend they really don’t know you too well).  Afterwards you sell everything they have including the house.  Take your 50% cut and leave them with the shirts on their back.  You on the other hand get to walk away with your 50% cut. At the end of the year they have more money but the next year does not seem too good for them.

 The only real punishment for these crooks is to empty their bank accounts and sell their assets.  Then force them to live off a janitor’s salary for 5 years with no-contact of their former business associates.  Then again their business associates are the same people giving out the punishment so fat chance there (Politicians are cheap).