ctenidae
Active member
Thats what happens when 535 people try to do something.
The speed and intelligence of a group varies inversely with its size.
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Thats what happens when 535 people try to do something.
Had to correct your statement...Thats what happens when 535 people who don't want to lose their jobs try to do something.
So, you're suggesting that golden parachutes and minimal gov't over sight should remain?
I'm suggesting that, without a bailout, policies that are shown to create more problems then benefits will naturally be killed off, eliminating the need for governement oversight while maintaining market freedom.
There is a point to golden parachutes. For one, they're essentially signing bonuses, which guarantee a certain level of compensation independant of the amount of time the executive keeps his job. From this perspective, they're a way to get a high powered executive on board, not a way to take care of them when they screw up. The other purpose is to make them secure in taking risks. If, following these events, the various Boards of Directors determine that golden parachutes lead CEOs to feel too comfortable taking risks, they'll turn into silver drogue chutes from full fledged golden parachutes.
Look at Carly Fiorina. She took major risks and was hevily criticised for the Compaq merger and actions afterwards. Got kicked out, with a severance package over $20 million. Very shortly thereafter, HP took over the #1 spot in the PC market from Dell, and has been there ever since; many credit Fiorina for a good deal of HP's current success, yet she was kicked out before the success started showing. Without the golden parachute, would she have done the same things, going against the Board? Hard to tell, but it's less likely.
I'm not against all regulation. Transparency is almost always a good thing, and probably would've averted a good deal of the current problems, as buyers of securitized mortgages would have actually been able to accurately evaluate them, and led to a smaller market for bad debt. Conflicts of interest are another area, where you have CEOs serving on the boards of each others' companies, so you get a bunch of CEOs writing CEO pay packages. But if a company wants to take on risk? Let 'em. And let them fail. Bad business policies will scare off investors, good ones will bring investors in. There may be larger swings in fortune in an unregulated market, but on average it's economically favorable.
Adding this stuff makes me question the bailout even more...why can't it pass on its own merit? Is it because the bailout has no merit?
Speaking for myself, for all the screaming about a credit freeze, I get daily solicitations and blank checks for all the money I can gorge myself on from a variety of credit cards offering 0-3% teaser rates and a transaction charge. I'm pretty sure I'm not the only person.
What I really don't understand is why someone gets to play Solomon and decide what banks institutions fail and who gets bailed out etc.
Bill just passed by Senate.
Timothy Murphy (R-Penn) said this morning that the bill didn't pass last time because they did a poor job of selling it to the public. They focused on liquidity, "which the average American thinks is what you mop up off the floor."
Sadly, true.
Good article...I definitely count myself as one of the non-experts, and yes, I did take a basic economics course in college, although I don't remember much of it anymore...Probably obvious to the well-informed posters in this thread, but novices/non-experts (like myself) might get some information from this Time article titled "18 Tough Questions (and Answers) About the Bailout".
Probably obvious to the well-informed posters in this thread, but novices/non-experts (like myself) might get some information from this Time article titled "18 Tough Questions (and Answers) About the Bailout".
This guy at the bar was telling me that in a year it will be impossible for even someone with good credit to get a mortgage....any truth to that??? Banks make money lending money so why would they stop????
Because they make money by lending it and getting paid back.
August last year they were saying mortgages would be impossible. People are still buying.
My sister and her husband just bought a condo in DC and I know they had to put down 20%
20% down.....Isn't that how things used to be way back when (i.e., more than 10 years ago)?