It seems that hypocrisy is rampant as the current administration will be having little patience for capitalism as it relates to companies receiving TARP money! by Mister MandM
(libertarian)
Monday, March 2, 2009
Thoughts on the Rhetoric Again!
I wrote an essay in early January titled "Is Socialism in the Symbols"? It was written to point out certain shifts in the images and rhetoric we've seen relating to the political philosophy of our new administration. It struck me then that the tone for free market capitalism was slipping away! It's starting to feel even more that way now!
Lately our President, while commenting about the excessive bonuses certain Wall Street firms have been providing executives and brokers said to the media and I quote: "We're going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if we are to, together, get this economy rolling again," Obama also said. "There will be time for them to make profits, and there will be time for them to get bonuses," "Now is not that time."
Couple of things about this:
I thought that a private company is always expected to make a profit for itself and its shareholders! Is it remotely free market thinking that there might not be a time to make profits, when those very profits justify being in business in the first place? Aside from the proverbial "pot calling the kettle black" was this another Obama Freudian slip or what?
Now, like our President, I do think that it is a bad decision to structure big bonuses to employees that pay when there is poor performance or a lack of fiduciary responsibility to their clients and shareholders. Or maybe even when a company is "too big to fail" and money has been given by the TARP or some other big government acronym to bail them out.
But brokers, the heart and soul of a Wall Street "brokerage" business make their living by receiving commissions and bonuses as their compensation is structured that way. And for any brokerage firm to stay in business they are reliant upon broker performance and the revenues they bring in. Aren't those revenues responsible for helping companies make profits so they can succeed and stay in business?
For most of these brokers bonuses had been structured with consideration to their performances and not how well the company they work for was run. Also, once these operational problems arose didn't the federal government decide which companies they would bail out and which ones of them would fail! What happened to those executives and shareholders that lost their jobs in that process? Another government programunemployment! For the ones they "chose" to save, doesn't that give them some responsibility to honor those brokers and executives' employment agreements?
Does this perhaps mean that those companies will ultimately have to answer to government bureaucrats instead of listening to their boards or share-holders? And does government intervention forego honoring contractual agreements with their revenue generators? Or, does our government have a deeper motive behind all of this? Exercising this form of power is more of a "do as I say, not what I do" type of structureerr, a socialistic approach.
And what about the new brand of stimulus that the "whypartisan?" congress has passed and that Obama has signed and put his hopes and name to? Most all bipartisan experts say that this bill will only grow the federal government and create less productive jobs for the most part. And the primary stimulus here will be the payoff the "winning" democrats will be providing to their supporters and constituents! Doesn't that seem to be a bit "over the top old boy" and a lot "big governmentish to you"? Especially when we are in an economic come to Jesus moment?
Based upon this and what we've seen of how the TARP was structured and the stimulus package is written, I would recommend that like Obama said about Wall Street; the federal government should "start acting in a more responsible fashion if we are to, together, get this economy rolling again."
By the way, the only entity I can think of that is designed to survive without any expectation of making a profit at all is a government bureaucracy! Is that what the banking and investment sector is to become? Then they could really "learn to operate in a more responsible and colorful fashion"just like the federal governmentin the red!
Michael Murphy, San Diego and Costa Rica
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Posted By: Walt Thiessen
Date: 2009-03-02 11:09:57
"It struck me then that the tone for free market capitalism was slipping away!"
Slipping away? I don't know where you've been the last eight years. The free market is virtually gone, and future wealth has been wiped out, thanks to the conservatives. That the liberals are only going to make it worse proves only that there are degrees of forced wealth transfer.
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