Has everyone forgotten about this until the next financial implosion? Now that we will have some new blood in Congress, maybe its time to start hammering our reps. regarding these megabanks. Does "too big to fail" = "too big to succeed"? It seems as though investors have not benefitted at all from the consolidation in the financial sector. The main benefactors have been the management of these supersized corporations. As a CEO, if you convince shareholders that bigger is always better, get them to foot the bill for expansion by being diluted, or taking less in dividends, or paying higher interest expenses, then you can justify larger and larger salaries/bonuses for yourself and your top lackeys. It is very easy to connect these dots at the annual meeting: "look at our earnings compared to five years ago! They have doubled! I and my management team deserve a much larger piece of the pie!" The other thing about these mega-corporations that is touted as a benefit, that seems to screw investors, is their inherent diversification. It is supposedly great, for example, that GE is into so many different businesses. When one are of the economy is faltering, another may be on the rise, therefore, investors are protected as earnings are less cyclical. On the other hand, maybe this diversification idea simply promotes underperformance. Weaker divisions can be carried by the cash cows much longer than would otherwise be tolerable in a smaller business. If the core businesses of GE were split off on their own, the winners would grow shareholder value unhindered, the losers would either continue to underperform, outright fail, or reinvent/reorganize themselves to become winners. Either way, investors would be free to pick and choose where to place their bets, rather than park their $$ in this impossibly complex behemoth and hoping for the best. I realize that we are capitalists at heart, and we can't afford to piss off all these megacorporations, for the very real fear that they simply move all their corporate offices to Dubai or India or wherever they are already offloading U.S. jobs in favor of cheap foreign labor. Well we're already moving in that direction anyway, so we might as well take our shot now with whatever leverage we still have, because that situation is not likely to improve over time.
It used to be that CEO's had skin in the game, as it was their own company, and their own money. I could justify these wages, and what these idiots do if the boss/ceo had skin in the game, when that is the case and they have their net worth tied into a companies viability, they dont tend to roll the dice. Now it has gotten so out of whack, that you have guys with nothing invested getting paid 10-100million just to leave should they fuck up, and bankrupt a company, let alone the fact they get paid that amount on a yearly basis, plus bonuses for growth. Thats the problem we face now, its basically a good ole boys club where everyone with connections just loots the company at the shareholders expense, essentially the exact same problem as with government.
incorrect. a smaller, lesser one time audit bill did pass. it is scheduled to come out in the next few months from what i remember. it is slated to show the details of the bailouts from 2008.
I think the time is now to reset awareness over this issue. I haven't heard anyone talking about it during the elections--I guess a lot of the politicians are already bought and paid for?
It used to be that CEO's had skin in the game, as it was their own company, and their own money. --------------------- Spot on. AND secondly, they knew the business. Today we have hedge funds running dunkin donuts. Do you realize there are dunkin donuts that do not sell donuts? Surprised the feck out of me. I asked them what the hell do you have the word donuts in the sign.
HR 1207, the bill to audit the Federal Reserve, swept the country and made the central bankers shudder at their desks. The bill passed as an amendment both in the House Financial Services Committee and in the House itself. But the usurpers of Americaâs future didnât take it lying down. They werenât about to allow their secrets to be exposed and their magic money machine to be put under close scrutiny. They worked frantically behind the scenes to quietly derail all efforts to open up the Federal Reserve to an independent audit. A handful of Fed-loving U.S. senators led by Chris Dodd rewrote the Senate version of the Financial Reform Bill to strip out Ron Paulâs Audit the Fed amendment and actually expand the Fedâs power over banks, lending and money. As Alan Grayson pointed out here, and Ron Paul commented on here, the Dodd bill completely eliminated legislation to audit the Federal Reserve, which already passed in the House. http://www.ronpaul.com/legislation/audit-the-federal-reserve-hr-1207/ You're welcome, and I accept your apology...
Too big to fail is a politcal phrase to fend off bear raids on the losers who hid crapola on/off the balance sheet. "Come clean" and we'll support you. Now the Fed knows the extent of the problem, everyone keeps their jobs, stays in business and QE is born. just saying.
How could the DEMOCRATS shut down something that helps Big Business? I thought the Democrats were for the little guy.