There has been a commonly-cited proposal circulating recently. In exchange for receiving Federal bailout money, executives at banks must agree to cap their salary at $500k per year. Even though banks currently need Federal bailout money, there is no obligation for executives to pay back the huge salaries and bonuses they earned in previous years.
As the current stock market decline indicates, the primary beneficiaries of a corrupt financial system are executives at banks. You should not believe "The financial industry has a State-licensed monopoly. Therefore, investing in a bank stock is a good deal!" Investing at a bank, you have the same problem as investing in any large corporation. As an individual small shareholder, you cannot prevent executives from paying themselves a huge salary/bonus while mismanaging the business. The bank executives are the ones receiving the State bailout, and not individual shareholders.
The reason it is necessary to bail out banks is the Compound Interest Paradox. If banks stop issuing loans, then there will be a hyperdeflationary crash of the money supply. Reforming a corrupt system is never an option. Given the constraint of working in a corrupt system, a bailout is necessary to keep the scam going. Congressmen don't have the intellectual capacity to realize "The financial system is completely corrupt!" (except for Ron Paul and maybe a few others). If you're a true independent thinker, you don't get picked to be a Congressman.
This proposal has several obvious flaws. First, the limit only applies to cash compensation. The CEO can still grant himself huge stock and option awards. Second, the CEO can just hire a bunch of his friends for $500k each. Instead of paying himself $50M, the CEO could hire 100 friends and pay them $500k each. CEOs already do this, because nepotism and connections are more important than ability when you have a State-granted monopoly. Third, a bank CEO does no actual real work, yet is paid a huge salary. Any nonzero salary is too high.
I'll volunteer for the hardship of being an executive at a bank for $500k per year, if anyone is interested. I'm not eligible, because I don't have the right connections and the right pro-State brainwashing. The pro-State troll answer is "FSK is not qualified to be an executive at a bank, because he lacks experience."
There has been a lot of outrage over huge bonus payouts while the banks are losing money and receiving Federal bailout money. The pro-State troll response is "Some divisions of the bank are profitable. Executives in those divisions must be rewarded." *ALL* functions of a bank are pure looting and pillaging. It's luck that determines what divisions are profitable, rather than careful planning. A bank executive has no useful skills. What is he going to do, leave the banking/looting industry and work for a company that actually produces something useful?
The mainstream media is complaining about largesse in the financial industry. However, they fail to mention the correct solution, which is to repeal all the taxes and regulations that make it illegal to use gold and silver as money. The profits of financial industry insiders are backed by the full power of the State. State violence is periodically used to crack down on gold and silver warehouse receipt banks and gold/silver/FRN dealers. Bank executives get a perk that nobody else gets, which is printing and spending brand new money.
Individuals don't have the magic money-printing power of financial industry insiders. For this reason, individuals will always be the slaves of the bankers.
The financial industry is incredibly inefficient, because competing alternatives are outlawed. State taxes and regulations make it impractical/illegal to operate a gold/silver warehouse receipt bank. Taxes and regulations make it impractical/illegal to use gold and silver as money.
The "too big to fail" concept makes it impractical to own or operate a "small enough to fail" bank. The ability to lobby the State for favors takes precedence over the ability to do practical useful work. Bank executives receive billions of dollars in direct and indirect State subsidies. They then spend millions of dollars on lobbyists. Lobbying the State for favors is a sweet deal. It has a return of 1000%-10,000%! For example, the State gives you $10B and then you spend $50M on lobbyists.
You cannot patch a corrupt system with more and more regulations. The correct solution is never discussed in a mainstream media outlet. The correct solution to nearly *ALL* economic problems is "Who needs a government anyway?" You cannot have a central bank and a free market at the same time. Laws that prevent people from using gold and silver as money are immoral.
You should not be a slave and wait for politicians to get their heads out of their ***es. Too many people are profiting off the current corrupt system, making real reform impossible. If you want freedom, the correct solution is agorism. Instead of begging your masters for freedom, you should grab it yourself.
Sunday, February 8, 2009
$500k Executive Pay Cap Loopholes
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1 comment:
Very succinctly put. I was talking with a democratic supporter the other day who was starting to realize what I've been saying about Obama and the whole Democrat/Republican scam in our political process. The parties are meant to purposely appeal to certain feelings and cognitive reasoning that exist in different people. The rhetoric from each party is manufactured to appeal to a certain mindset therefore.
For a lot of people I think there are three layers of enlightenment. The most ignorant and intellectually lazy people will usually buy the black and white, Disney movie type logic of the world and support the Republicans with their "We good, they bad" mode of thinking. Then some kids go to college and learn a few new things, realize that the right-wing is wrong and feel so enlightened when they become a Democrat, an affiliation that admittedly does involve more critical thinking. The fallacy in that however is that while the rhetoric of the Democratic Party may seem more enlightened, their policies behind closed doors are exactly the same as the Republicans. Everyone has a good cry when listening to one of Robert Kennedy's uplifting speeches about peace while at the same time he played an integral role in some of the worst war crimes of the early Vietnam War including illegal bombings of civilians and the coup which assassinated Diem. The third layer of enlightenment is realizing this scam and trying to achieve the agorism you refer to.
You mentioned the mid-term elections in 2006 which I think everyone will admit was won through a largely anti-war platform for the Democrats. "Change", an anti-war message, and financial system reform was a big part of more Democrat gains in the past election year including gaining the Executive Branch and strengthening majorities in the House and Senate. As I have discussed before, the operations of the war in the Middle East and Central Asia to control the TAPI pipeline are proceeding as originally intended and I see no signs that real economic reform is on its way. One might ask, "Why is Obama allowing the Republicans to be an obstruction to the stimulus bill or economic reform?”. The answer is that Obama and the Democrats are the same people as the Republicans, just with different oratorical mechanisms for getting elected. The central bank cartel’s power, the complete monopolization of our economy and media, and an absence of a viable national party should leave little doubt as to the futility of reform within the structures of power that currently exist.
People in this country are kept purposely just rich enough to not riot in the streets and just poor enough to have no means with which to travel or become a powerful political force. However, I altogether fear and hope at the same time that the powers that be cannot control their own greed and will therefore lose their grip on this balance. Meaning that while I fear the reality of the economic situation getting worse, perhaps it will require a total collapse of the corrupt system for a new and natural beginning to take place, something I do hope for. I predict in this situation mass riots and violent attacks on buildings and personnel who are perceived to be a part of the current system. I have a friend who works as a maintenance man at a Federal Reserve Bank and he told me that they have been building alternate office locations underground or near the current offices so that they can "operate normally in case of a terrorist attack". An attack from Islamic fundamentalist terrorists, or angry American citizens? A reasonable question in my view.
Robert
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