- In the world of sports, Americans have grown accustomed to stars pulling down huge salaries because these performers bring the masses to the box office. “If we don’t pay them (huge sums of) money then someone else will,” is the refrain. Is that so? The Texas Rangers signed Alex Rodriguez in 2001 for $252,000,000 in a bidding was with itself! Let me repeat that: two hundred fifty-two “MeeEEEeel-yun” dollars! The fact that then owner Tom Hicks grossly overpaid A-Rod continues to affect sports contracts today. Alex and his offspring shall be rich for years to come, but should A-Rod be considered rich or wealthy? To paraphrase Chris Rock, “People like A-Rod are rich. The man that signs A-Rod’s paycheck is wealthy!”
- The (American) Automotive Industry CEOs flew to Capitol Hill today with tin cups in hand begging for a bailout loan. Here’s the funny the part: GM is spouting that they’re going to be “strapped for cash” before the next administration takes office, but saw fit to send CEO Rick Wagoner to Washington D.C. via private jet at a cost of ~$20k. In fairness, the CEOs of Ford and Chrysler did exactly the same thing. Rewind: Three CEOs flew three different private jets from the same city to the same destination. Have these guys not heard of carpooling? Call me crazy, but when my funds are tight, I stop eating steak and start eating Top Ramen! Such excess exhibits how Wagoner, and the other Big Three CEOs, are completely out of touch. The Big Three CEOs expect to maintain their existing benefits while instilling fear over the thousands they’ll have to lay off in order to keep the Lear jet engines running.
For the record, Wagoner’s salary and other compensation rose 64 percent in 2007 to $15.7 million (up from a paltry $9.57M). This is the salary GM paid him while the company lost money. Tell me again why this is a business model worth sustaining? Would you give “a loan”—[insert Sarah Palin wink here]—to a panhandler in an Armani suit knowing that he’s just going to use the Benjamin’s to purchase a pair of Bruno Maglis? Of course not. Why? Because the panhandlers—the Big Three CEOs—neither understand nor appreciate the complex nature of their business problem and, to this point, have not provided a viable alternative business plan.
Most interesting of all: none of the foreign automakers—many of whom assemble automobiles in the Unites States—are asking for a loan or handout. - Wall St.’s John Mack, chief executive of Morgan Stanley Inc., the second-largest U.S. investment house, received $40 million in stock and options for his 2006 bonus. This reflected the largest bonus awarded to a Wall Street CEO at the time it was given. Mack’s record for the biggest bonus ever paid to a Wall Street chief executive didn’t even last a week. It was smashed by the $53.4 million that Goldman Sachs gave its chief executive, Lloyd Blankfein. The windfall for Blankfein included a cash bonus of $27.3 million, with the balance paid in stock and options. But it gets better for Mr. Blankfein. Last year, Blankfein received a bonus of $67.9 million. At least Goldman Sachs reported record Wall Street profits of $4 billion—that’s more than Rick Wagoner can say! Goldman Sachs, which is part of the $700 billion US bail-out package, will not add to the $600,000 salary of chief executive Lloyd Blankfein and six other officials for this year. That’s mighty “right” of them considering Blankfein made more money in the last two years than Tiger Woods, Alex Rodriguez, and Roger Federer combined.
I still believe in capitalism, and I have no issue with a person’s ability to earn a buck. But the days of sustaining current executive compensation levels are over. To further complicate matters, there is not near enough dollars “trickling down” into the economy from those with the cash--think of the guy with high chip stack at the Texas Hold'em table who continues to play the minimum bet. If s/he doesn't "stimulate" the table with some chips, the wealth doesn't have an opportunity to get transferred.
Greed has taken a strangle hold in our economy and it’s not going to let go willingly. It’s evidenced by the lack of sacrifice by executives, and their willingness to purge those at the bottom of the economic food chain. Sadly, our economy can ill afford the time it will take for the market to drive the ethics correction of where we need to be. And that leaves government regulation to solve the problem—and we all know how good the government is at solving problems!
It’s that $700B bailout that agitates me the most. Why? Mainly because of the lack of control over how the money is being doled out, but we've also set precedent. Expect plenty more requests for federal bailouts from other industries preaching "doom and gloom" over the next few months. The American people must be asleep because there’s not near enough outrage coming through the airwaves, through the newspapers, or over the Internet. If you’re among the millions of Americans who work hard and pay your bills, you should be furious! Where is the justice for the people who are doing the right thing? Personally, I neither want a bailout nor need a handout; I just want the solution(s) to be fair to those who are fiscally responsible. If you’re among the responsible people sensing that you’re getting the short end of the stick, I encourage you to write your Congressman to remind them of your views. The (National) debt you save could be your own…
Peace,
+THINKER
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