The Cost of Success
We are told as children that the good guys always win. We see it in movie after movie that the hero always triumphs over the villain. We are always excited during that final battle when it looks like the hero is destined to perish, only to have a reversal of fortune and the villain dies in a fiery crash or falls to his death. We love it when people win except when it appears that they win at our expense.
There are two big situations going on in the business world that explain that circumstance. The first is the bailout of the big Wall Street banks that executed poor business plans and have collapsed due to their own incompetence. The second is the big oil companies that appear to be profiting from the huge rise in petroleum prices. For some reason we are feeling sorry for those businesses that created a mess and now want someone to dig them out. What most people don’t see is that they are being bailed out with tax dollars. Yes, we the people are the helping to keep these now bankrupt companies afloat. It plays right into the liberal playbook of handouts and rewarding failure. That has become the current method of reward for the liberals. Offer to pay for a total lack of success. That is genius.
At the same time, Congress has big oil tied up in hearings grilling them on why their profits are so huge. They are threatening to increase the taxes on their profits because they are excessive. You never hear that when Wall Street firms have earnings through the roof and are paying the gargantuan year end bonuses. So the reward for being successful is to have the fruits of your labor be stripped away. That is a real motivator. If we use that logic, the World Series would not be between the pennant winners but the runners up. After all, why reward success.
Icool
Cobb
There are two big situations going on in the business world that explain that circumstance. The first is the bailout of the big Wall Street banks that executed poor business plans and have collapsed due to their own incompetence. The second is the big oil companies that appear to be profiting from the huge rise in petroleum prices. For some reason we are feeling sorry for those businesses that created a mess and now want someone to dig them out. What most people don’t see is that they are being bailed out with tax dollars. Yes, we the people are the helping to keep these now bankrupt companies afloat. It plays right into the liberal playbook of handouts and rewarding failure. That has become the current method of reward for the liberals. Offer to pay for a total lack of success. That is genius.
At the same time, Congress has big oil tied up in hearings grilling them on why their profits are so huge. They are threatening to increase the taxes on their profits because they are excessive. You never hear that when Wall Street firms have earnings through the roof and are paying the gargantuan year end bonuses. So the reward for being successful is to have the fruits of your labor be stripped away. That is a real motivator. If we use that logic, the World Series would not be between the pennant winners but the runners up. After all, why reward success.
Icool
Cobb
posted by Cobb at
1:48 PM
1 Comments:
I see the Wall Street meltdown from a couple different perspectives...
I was a newbie public accounting auditor, doing mortgage audits of places like First Federal Savings & Loan, Home Federal Savings & Loan, First Federal of Delta and a whole bunch of other S&Ls in northwest Ohio that overstretched themselves and collapsed in the early 80's.
As a newbie, I got assigned to the fun stuff - checking mortgage documentation. We were looking at internal controls that said "Is there a certified signed property valuation for the loan?" when the question should have been "Is there a property valuation that was worth more than a fart in a windstorm?" The loans were 100% documented from a compliance standpoint - but the worth of the documentation itself was nil, plus or minus 10%. This sounds very familiar to where we are now. Just substitute the words "market valuation" and you're set.
My sister and brother in law are owners of a home purchased with a low-ball-rate ARM. They were approved at the upper bleeding maximum edge of their ability to pay - with an adjustable rate mortgage that was (unknown to me at the time) almost certain to go up way beyond their ability to pay when the adjustment period came due. The people who wrote that loan put the shells in the chambers, cocked the gun, and pointed it at my family's head, knowing that the gun would almost certainly go off in 3 years. If my sister and bro-in-law are culpable, those who originated the loan and those who refinanced it are equally culpable.
Of course, no one could have foreseen my sister's disability or Jeff's down-grade from year-round worker to seasonal status. But even at their most financially productive, with the other debt they were carrying, it was madness to approve the loan they got. And I'm a little resentful that the organization wants the bailout, rather than the little people who were sold an exploding pig in a poke.
I know what the S&L buyout cost the nation 20 years ago - and there is no way in hell it's not going to cost exponentially more this time than last. And this from an economy that's already suckin' dry from our overseas adventures.
To my mind, the only reason the oil companies haven't been stampeded together and broken up like in the last antitrust wars is because we are so addicted to fuel. The nation - myself included - is so addicted to the "right" to independent and at-will travel that no one will risk threatening the supply of our drug - even though people (just like addicts) are having to make decision between their drug-of-choice and food, health care, even housing.
I just wish I had an answer. But I also know the old answers won't do anymore, either...
Forgive me for cross-posting this on my own blog - but your post brought up several ideas that have also been percolating in my mind.
By
Steve F., at 9:45 PM
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