Klingon Brains!

[elfs]

My Batleh Says: Gimme All Your Money

Police in Colorado Springs are looking for a man who robbed two 7-11 with a Batleh, which the newspaper described as a "Klingon Sword."

Execs shriek as Obama caps compensation on institutions receiving TARP funds

Brian Beutler quotes an article in which the head of a "compensation consulting firm" complains that the limits imposed by President Obama's financial recovery team "will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms."

Notice that these are executives at banks that are presumably failing mostly due to mismanagement. Yet the expectation here is that they're valuable, re-hireable executives who could go anywhere and get paid better.

I don't get that at all.

Cheney adds to the right's ammunition dump.

I've read about this in a number of places this morning. Cheney has joined the chorus of right-wing voices gleefully saying if <sotto voce>please, dear God, let it be "when" so I won't be remembered as a knave and a fool</sotto voce> the US gets hit again, it will be because Obama undid all of the "good" things the Bush/Cheney administration did.

Steve Benen documents the lies in Cheney's latest round of interviews.

On the other hand, the crazies are right about one thing...

On Stephanie Miller this morning, the crew was defending Obama's right to keep the Oval Office as warm as a Hawaiian summer. I'm sorry, but it's a bad example when the president jacks the thermostat while I install a new programmable thermostat and lower the temperature in the house two degrees for waking and ten degrees during sleep because my monthly gas bill is now higher than electricity use. The man should put on a sweater or something. "He's the president, he can do what he wants" was the excuse they used during the Bush era.

Comments

[en-ki.livejournal.com]

One thing comes to mind about the compensation: let's say you fire all the assholes who drove the company into the ground. Now you hire... who, exactly? Not an experienced, competent CEO---they're all making 50 million a year somewhere else.

Maybe the answer is "go find that VP of Finance who spent the last 10 years saying 'WTF'", but if it is, is the board (made up of the old CEO's golfing buddies) going to think of that?

[blaisepascal]

I think the key word is "recruit".

If I were on the BoD of a bank that decided it needed TARP funds to survive because of the mismanagement of the soon-to-be former CEO, I might be seriously concerned about my firms ability to lure an executive with a successful track record away from wherever he/she is for only $500K/year. Especially if the compensation package couldn't include things like options which have a strike date of "when we pay back the TARP funds".

[atheorist.livejournal.com]

I can't find the specific quote, but Napoleon said something like "In every soldier's backpack lies a field marshal's baton.". If I understand the connotation correctly, he's saying that anyone can rise to the top.

Hiring cheaper, less experienced people might be a reasonable strategy.

[jordan179.livejournal.com]

Notice that these are executives at banks that are presumably failing mostly due to mismanagement. Yet the expectation here is that they're valuable, re-hireable executives who could go anywhere and get paid better.

I don't get that at all.

Here, it's simple.

Suppose that you're a top-level executive. You can work for one of the failing banks for half a million a year, or at another company -- one that isn't failing -- for $20 million a year.

Which will you choose?

[codeamazon.livejournal.com]

It's such an obvious solution....cap ALL executive pay to a ratio based on employee pay.

I'm such a damned socialist.

[caprinus.livejournal.com]

Oh no! An "chilling weapon" "capable of decapitating its victims"! *flail and panic*

[omahas.livejournal.com]

Actually, that is not the point at all. Because Elf is speaking from the point of view of the hirer, not the hiree. Elf is confused that the industry gives this expectation that an executive that is managing a bank that is failing due to his/her mismanagement is still considered by the industry to be "valuable" and "re-hireable" when the expectation from Elf's pov is that they'll just go to the next place, no matter who it is and what they are paid, and do it again.

[pixel39.livejournal.com]

Yeah, if it's A) sharp, and B) wielded correctly, which most aren't likely to be. Sheesh.

[gromm.livejournal.com]

Uh huh. Just like *I* could work "somewhere else" for "twice what I'm making here".

The trick of course, is beating out every other candidate with a resume twice as good as mine.

You don't suppose that the board of directors at the banks where "they could be working at for $20 million" wouldn't say something like "Oh, yes, we know who you are. You're the man that took the bank that was too big to fail, and drove it straight into the ground!"

But I'm certain they can get jobs running 7-11 franchises. Just for a lot less than a half million per year.

[sianmink.livejournal.com]

I'd rather have a good aluminum bat than a Bat'leth. Terribly designed aluminum bludgeon that can only hurt someone through being swung and being hard, (like a 2x4 but less elegant) and not by any particular merit of its design.

[(Anonymous)]

In all probability I would imagine a bat'leth be in reality fairly impractical. There is a reason swords and axes have the grip at one end, you can get a better swing going. Would be better off with a falchion if you ask me.

[pixel39.livejournal.com]

You'd be surprised, though--boards of trustees will hire executives who have just left a company that they *ran into the ground* and then they're surprised that the new guy did the same thing to their company, because they're all buddies on each other's boards.

[kistha.livejournal.com]

Works for Costco.

[(Anonymous)]

I know the TNG people were limited by a props budget and all, but I always thought the bat'leth was a horrible design. A short moment arm coupled with a lightweight material (it was obviously plastic or aluminum) makes it pretty much worthless. Unless it was razor sharp I fail to see how it would do much damage at all, and even then it would be useless against even the most basic armor. It might be somewhat effective as a stabbing weapon, but then it might as well be a spear or a sword.

Anonymous Blog Reader #127

[mikstera.livejournal.com]

I prefer these (real ones, not the rounded practice ones shown here):



They lack the reach of a bat'leth, but are far more versatile, allowing for blocking, trapping, disarming, and, of course, slicing and piercing. You also don't get the sheer kinetic energy of a lever (e.g. sword, bat, 2x4)... you trade flexibility and versatility for power.

[technoshaman.livejournal.com]

As demo'ed by the professional duelling couple "Crossed Swords", the Batleh is nothing more than a quarterstaff with cool-lookin' pointy ends. (They did a kick-ass-looking Batleh routine... and then set'em down, picked up ordinary plain vanilla quarterstaves, and did the *exact* *same* *routine*... Standing O.) Unless the robber is an ex-SCAdian, he probably has no frelling clue how to actually use the thing.

As for Obama yo momma inna sauna (couldn't help the alliteration there).... I'm fifty-split. On the one hand it sets a bad example, true fact. On the other? Rank doth have its privileges, and if it means we have a president at peak performance? Pfui. Pile the poplar in the potbelly. (I know I don't think too well when the temperature is radically off from nominal-for-me...)

As for CheyneyCo's FUD: One should note that after WTC1 in '93, the turkeys as did it were tried in regular courts, sentenced, and sent up the river, and *nothing else happened* until the government changed hands. *as soon as it did*, *boom!* I'll bet Dick a steak dinner *nothing happens* under Obama. OTOH, I'd take mine in the form of a gift certificate... (trust this joker? No!)

Two things

[cadetstar.livejournal.com]

Two quick comments here.

One, I could be wrong, but I thought the heat issue was accidental and not intentional (Olbermann or Williams said something to that effect on Countdown a few nights ago).

Two, and geez is this nerdy, that's not a bat'leth, actually. It's much too small and shaped differently. I tried to look to find its name, but could not find reference to it, but it's way too small for a bat'leth.

-Michael

Yeah, I know you don't get it

[ideaphile.livejournal.com]

Because you haven't spent the last 12 years of your professional career around senior executives of major companies.

I have.

It's very clear to me that the top 1% of CEOs are significantly more effective than the next 1%, and there's a huge gulf between those CEOs and the ones down somewhere around the 90% level whose labor is worth around $500K/year in a free market.

Apple's success, for example, isn't really due to the fact that the company is led by Steve Jobs. It's due to the fact that it's managed by a handful of people who are ALL top-1% executives.

Neither one of us can say for sure what would have happened to these major financial institutions if they'd been managed by 90th-percentile CEOs instead.

But I have a pretty good feeling that they would have lost a lot more money than they did.

Sure, there are always cases where a CEO or other senior manager ends up making stupid decisions that do more harm than good. But no board of directors can predict the future; they just pick the best person they can find.

This pay cap isn't going to do a damn bit of good, but it WILL absolutely guarantee that very few CEOs who could earn more than $500K somewhere else will even apply for one of these jobs.

So Obama is, in effect, guaranteeing that the most at-risk companies in the US have second-rate managers.

Genius, sheer genius, if you're trying to destroy the US economy.

(Though I note that Obama seems to be in the habit of arranging loopholes big enough to drive a truck through. No, US agents can't torture anyone, EXCEPT maybe they can. No, executives can't be paid more than $500,000 per year, EXCEPT maybe they can. If he's making these decisions on principle, then he's a hypocrite. I'm beginning to suspect that in spite of his occasionally excellent rhetoric, he's just a populist without any real convictions.)

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[(Anonymous)]

One of the pieces on PBS radio this morning commented on this, remarking that the salary cap could be counterproductive, as executives would be more loathe to accept the government bailout at the cost of their multi-million-dollar salary. My immediate reaction was "If the company's in trouble, so that it's likely to go under or nearly so without the government bailout, and the executive is more attached to his salary than the welfare of the company, then that's an executive I don't want running a company I hold shares in."

Re: Yeah, I know you don't get it

[mikstera.livejournal.com]

:) So, you've been "around them", eh? Well, that's all I needed to hear... you must be right...

All kidding aside, there are several questions here:

While it may be true that the top 1% of executives are significantly more effective than the next 1% (a fact we've yet to establish), it remains to be seen whether

• that increase in effectiveness justifies their pay differential


• the next 1% are so much less "effective" that having them in charge puts the company at risk


• given that, by definition, 99% of companies aren't being run by the top 1%, yet businesses continue, just how key is that top 1%?

The pay cap's effects could include a psychological effect, one with beneficial economic consequences... and our recession has a not insignificant psychological component.

[amythis.livejournal.com]

If I recall correctly, President Carter (despite being from a warm state like GA) used to lower the thermostat and wear sweaters.

Re: Yeah, I know you don't get it

[ideaphile.livejournal.com]

Psychological effects? You justify a fundamentally new kind of government control over the economy in terms of psychological effects? That's the worst kind of short-sighted pragmatism.

And it sounds like what you're really talking about there is making the mobs happy, even if they're also being made poorer. Is that right?

That's just insane.

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Re: Yeah, I know you don't get it

[(Anonymous)]

What new kind of government control is this? Nobody is forcing these companies to accept TARP funds, as far as I know (if I'm mistaken, then I apologize). If they don't like the conditions, they are free to let themselves run into the ground like your vaunted free market says they should. Even from the laissez-faire perspective, I can see the objection that bailouts aren't a valid use of taxpayer money, but I can't see the objection that simply providing additional options amounts to any kind of undue control.

Additionally, any group of private investors providing funds to bail out companies like these would insist on a huge amount of stock and seats on the board. From what I've heard (correct me if I'm wrong), the strings attached to TARP funds are really pretty minimal.

There's also the question of whether executive compensation is too high across the board. No, I'm not advocating regulation or anything, but the "free" in "free market" carries with it certain connotations, among them the notion of free competition with no significant barriers to entry. I don't believe this is the case with major financial institutions; there exists a corporate culture in which hiring decisions are made for reasons which are not strictly rational. I was reading just the other day about the lack of due diligence in hiring people for financial executive positions. I think your objection ignores the possibility that there may be people who are able to effectively lead a company and willing to do it with less compensation, but who are not currently considered for those jobs. Time will tell.

Anonymous Blog Reader #127

Re: Yeah, I know you don't get it

[ideaphile.livejournal.com]

Sure, sure. Nobody's forcing any particular company to take any money at all.

But if they don't and their competitors do, they're screwed.

Screwed by the action of a government that obtained the bailout money in the first time either by taking it from some people at gunpoint, or by creating inflation that undermines the value of all cash-based property in the country.

There's no force involved? C'mon.

You need to think this stuff through a lot more carefully.

And sure, there are plenty of good managers that aren't being fully utilized, but the system is already doing everything it can to find those people. Salary caps won't do anything to accelerate that process.

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Re: Yeah, I know you don't get it

[mikstera.livejournal.com]

By "psychological effects", I primarily mean "consumer confidence." If consumers believe the government is "doing something", that might make it more likely that they'll have the courage to spend. Speaking for myself, I've always had the feeling that the disparity between CEO salaries and that of the rest of corporate employees is what qualifies as "insane."

I think the phrase "a fundamentally new kind of government control over the economy" is overstating the case more than a little... YMMV.

As for "the mobs", how will a cap on C-level executive salaries make them poorer, aside from your assertion that this will result in significantly worse quality of C-level executives?

Re: Yeah, I know you don't get it

[(Anonymous)]

They would've been screwed anyway. They're not in any worse position than they were before TARP funds were available to them. If they don't like the conditions, they can start liquidating their assets, or they can go looking for private backers.

I can understand your objection that the bailout funds were improperly obtained, amounting to force or inflationary fraud from the perspective of the taxpayers, but that's a separate issue. We weren't talking about governmental use of force generally, we were talking about government control over the economy via undue influence over financial institutions, and I still don't think you've made that case. Saying that providing options amounts to control involves linguistic gymnastics of a degree I'm not comfortable with.

Anonymous Blog Reader #127

Re: Yeah, I know you don't get it

[ideaphile.livejournal.com]

Aside from that? Why should I offer any reasons aside from that?

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Re: Yeah, I know you don't get it

[ideaphile.livejournal.com]

You can't hide behind this "options" smokescreen. It isn't that benign.

For the government to subsidize unprofitable companies at the expense of profitable companies isn't a matter of "options".

It's a matter of taking away options and disconnecting essential market mechanisms.

By force.

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Re: Two things

[cadetstar.livejournal.com]

That's why I couldn't find it...I was only looking on the Star Trek wiki.

-Michael