Friday, March 20, 2009

Stuart Schneiderman on "going John Galt."



Blogger Randroideka said...

It may be more precise to call it "Going Rearden".

What is it that all the attacks on the AIG bonuses are counting on?

9:09 AM, March 20, 2009  
Blogger uncle ken said...

The mess at AIG, like the stink rising from FNMA and FRMC, illustrates the folly of government involvement in corporate spheres. Expect more from the big banks, Detroit's car manufacturers and anything else the dead hand of FedGovCo touches.

Fwiw this is how the Nazis did it. By acquiring control of business, not by outright nationalization. Welcome to Fascist America. Will the mandatory Public Volunteer Corps wear brown shirts? I found last night's castigation by Obama of the Special Olympics (on the Tonight Show) chilling - the Nazis had a final solution for that problem too.

10:00 AM, March 20, 2009  
Blogger HMT said...

How does a company get "contractually obligated" to pay a "bonus"? If you always get the money then it's "salary" or "differed compensation" or some other concept.

I'm not getting a bonus this year. My company hands out bonuses based on company, group and personal performance. The relationship between those three factors are MULTIPLIED. So if the company factor is 0 (as it is this year) then the other factors don't matter. There's no money to go around.

It sounds like the executive monetary incentives were out of whack. Which shouldn't be too surprising considering how badly the rest of the banks finances were constructed.

The sad thing is; if you're going to give a sack of money to someone who's obviously shown you they don't know how to manage it, you should expect it to be poorly managed.

Let them pay their bonuses. Congress should go "John Galt" and ignore the current set of banks. They'll survive, or not. Deal with the ones that make it, or the ones that replace them.

10:22 AM, March 20, 2009  
Blogger Roci said...

I think any executive that can get the govt to cough up a Trillion dollars in free money deserves a huge bonus. What is performance if not bringing in the big bucks, no matter the source?

If I made that kind of difference in my company, I would axpect a little something extra.

Also, most skilled and valuable employees expect to be rewarded for not being the first rat to leave the sinking ship. THere is risk in staying until the end and employers compesate for that risk with bonuses.

10:44 AM, March 20, 2009  
Anonymous Anonymous said...

On a side note, I heard on the news last night that several executives who had been paid "retention bonuses" (those are ongoing bonuses used to keep them at the company and not go somewhere else) had left the company right after receiving the bonus and had gone somewhere else.

10:49 AM, March 20, 2009  
Blogger HMT said...

"I think any executive that can get the govt to cough up a Trillion dollars in free money deserves a huge bonus."

No executive convinced Congress to give them the money. They were throwing money at them. Despite that, even if an employee was able to show individual excellence, that still has to be measured against overall company performance. If the company is in the tank, nobody get's bonuses. That's been my experience.

"...had left the company right after receiving the bonus and had gone somewhere else."

Yeah, makes you wonder what genius came up with the concept of "retention bonus". Money as a retainer is only going to hold me until I get the money in my hand.

11:02 AM, March 20, 2009  
Blogger Peter Dane said...

And example of a contractually obligated bonus? "Lead the division in rushing, and you get X dollars. Lead the conference and it goes up to Y. Lead the league and it goes up to Z. Don't lead anything? No bonus."

It is called a performance incentive. The money is only there for you on the basis of your performance. Perform and it is yours - by contract. Don't perform, and you don't get it. By contract.

If one side breaks the contract, the other is free to terminate the relationship, and it makes it real hard for the original offender to enforce things such as "no-compete" clauses.

And the way one company structures their bonus system lays no obligation on any other company in the world to adhere to the same structure.

3:32 PM, March 20, 2009  
Blogger Larry J said...

The people who ran AIG (and Fannie Mae/Freddie Mac) into the ground took their money and ran long ago. It's the people who're trying to clean up their messes that're getting the bonus. All of this hue and cry over less than 0.1% of the money AIG has received in the bailout (as shown here) is a smokescreen. We need to know more about where they're spending the other 99.9% of the money. That's the real story.

3:54 PM, March 20, 2009  
Blogger Joe said...

In 2002, I got a retention bonus. Early January we'd just gotten a new CEO and with the company swirling down the toilet, they decided to pick the top ten contributors and agree to pay us a percentage of our salary if we stuck around until June 1. The only way we wouldn't get the bonus is if we quit on our own accord or were fired for cause by the standards of the state unemployment office (which in my state means you have to be really incompetent.) We all got our bonuses. (I got laid of two months later, a few more in October, one guy quit early December and the company folded mid-December.)

5:08 PM, March 20, 2009  
Anonymous Anonymous said...

This comment has been removed by the author.

7:50 PM, March 20, 2009  
Anonymous Anonymous said...

This comment has been removed by the author.

7:54 PM, March 20, 2009  
Anonymous Anonymous said...

This comment has been removed by the author.

7:57 PM, March 20, 2009  
Anonymous Anonymous said...

This comment has been removed by the author.

8:19 PM, March 20, 2009  
Anonymous Anonymous said...

Defending the AIG people is a bit bizarre.

So the other day, I got carjacked. The police caught the dude. All I had was a few bruises, but my car was really messed up.

In court, the judge declared that since I worked for years to buy the car, and the thief was unemployed, I was oppressing him, so the least that he could do would be to turn my car over to the guy and let him go. I then had to also pay $1000 to the thief and promise not to oppress him in the future.

Well, that didn't really happen. But I kind of feel that way when I pay my taxes (ultimately at the point of the gun) and that money is delivered to truly incompetent people. Really bizarre.

9:02 PM, March 20, 2009  
Blogger DADvocate said...

You don't get it, do you.

Not sure, JG. What I get mostly is that Obama and gang wants us to be really mad at AIG and focus on AIG so we won't notice what a bunch of bumbling idiots we have in the White House and Congress.

...and that money is delivered to truly incompetent people.

Is in the Federal government I assume?

9:05 PM, March 20, 2009  
Anonymous Anonymous said...


The managers of AIG drove it to the brink of bankruptcy.

In that sense, a five-year-old girl could have accomplished the same goal. You could have easily accomplished the same goal of driving the company to bankruptcy.

Whether Obama is diverting or not is a non-starter. Your friend and helper, the Gubment, delivered billions and billions and billions to AIG; AIG, in turn, paid out millions and millions and millions to itself (but personally) meaning personally to the same people who run AIG and who ran it into the ground.

On another board, a guy said that the AIG executives should get their bonuses because they are executives. Other people are just envious of executives because they are successful.

I just gave up on that board. I couldn't get it across ... that ... they are not successful ... if bankruptcy can only be averted with billions from the Federal government.

I'm willing to also give up here. I'm slowly starting to think that Americans are going to get what they deserve.

Utterly stupid.

9:16 PM, March 20, 2009  
Anonymous Anonymous said...

I like the carjacking analogy.

I'm just envious of the carjacker because he is driving a nice car.

The car I used to have.

And I'm also just envious of the AIG executives because they didn't produce anything, but the government in a roundabout way is giving them millions, each one gets millions and millions, just because. Even though they would have been unemployed if the company had just gone under, which is the natural course of things if the government hadn't given them billions and billions and billions and billions of (partially) my money.

... ummm ...

The End.

9:20 PM, March 20, 2009  
Anonymous Anonymous said...

With regard to "going John Galt":

Men should do that.

On the street and in the subway, I run into situations almost daily where women need help. They don't just need it, many demand it. There is a daily group of women with baby buggies, for instance, who probably couldn't make it through the day without men helping the buggy up the stairs. Among other things I see daily.

Men should just stop ... period. In particular, male police officers should slowly find another job and then terminate their employment with the explanation that they do not agree with the policy on domestic violence.

Other men in the private economy (skilled tradesmen etc.) can simply refuse to help women anymore.

There is some day in the year (that I have never noted) on which women (homemakers) are supposed to show how much they contribute by "going on strike". I live alone so I never really felt the strike all that much. Neither have my married co-workers, come to think of it.

But I have a feeling that if police officers and skilled tradesmen and all the rest of the male-dominated occupations simply ... quit ... then women would be up the creek. Without a paddle.

Not that it would really happen, but you can do it in small ways yourself. I don't help women anymore. We're all equal now.

9:33 PM, March 20, 2009  
Anonymous Anonymous said...

That type of "going John Galt" also seems to be in line with the original intent.

Hank Reardon had a bunch of parasites attached to the neck. At a certain point, he simply instructed a lawyer to get him the best settlement possible against his parasitic wife (who was also going behind his back with certain things). The rest, he just cut off.

John Galt, smartly, never got married (as far as I remember).

I don't hate women as a group, but for some reason I am starting to really hate the sub-group that leeches off men. Housewives: In real life, I am going to oppose you pigs.

9:40 PM, March 20, 2009  
Anonymous Anonymous said...

This comment has been removed by the author.

9:41 PM, March 20, 2009  
Anonymous Anonymous said...

Men are tuned towards working with the outside world, and women are tuned towards working men.

Women would have a problem that they cannot even foresee if men suddenly quit being the suppliers.

Women have no idea. But they would all of a sudden have a big of an idea when there's nothing to eat, and no man around to blame.

12:34 AM, March 21, 2009  
Anonymous Anonymous said...

... even if she's an important coordinator of a cross-disciplinary coalition. LOL

12:39 AM, March 21, 2009  
Anonymous Anonymous said...

Liar's loans, no doc loans, etc. that were handed to people who could not pay them back, as forced upon lending institutions, like the $14,000.00 per year fruit picker in CA given a zero down mortgage on a $700,000 home, the millions of defaults / foreclosures that have been piling up.......

The causes are being buried and the class jealousy agenda is being pushed hard - and is obviously working. Meanwhile the house and senate pay raise and 92K expense account go through (in the same stim pack)unnoticed and unopposed.

And despite the $9.3 trillion deficit, Obama's agenda is right on track. (Just what does that mean, anyway?)

The entire situation is purposely made foggy, and blame is being laid upon those who were coerced since Carter days to start doing this stuff. The effect and trouble that has been growing for years - just like with S.S., etc., has been deferred to the future over and over. Just like the bad loans that were packaged and sold to unsuspecting purchasers expecting a return. They tried to make lemonade out of those lemons. What else can you do? The ex head of Fannie gets dumped for corruption, but gets to keep his 90 million. No one said a word about that.

And if you really think - anyone - that only those making 250 K plus a year are going to pay for it, you're out of your minds.

What I see is if our government is not going to let people fail, then (on the other side of the equal sign) they aren't going to let them succeed either.

5:54 AM, March 21, 2009  
Blogger TMink said...

Dadvocate wrote: "What I get mostly is that Obama and gang wants us to be really mad at AIG and focus on AIG so we won't notice what a bunch of bumbling idiots we have in the White House and Congress."

Yep, and our President and Senator Dodd both received over $100,000 in campaign funds from AIG. Oh, and they knew about the bonuses at LEAST as far back as March 3.


7:43 AM, March 21, 2009  
Blogger DADvocate said...

JG - I'm not sure exactly what your point is. Yes, AIG managers ran the company into the ground. The Feds bailed them out for some reason, supposedly to save the financial system because AIG was too big to allow to fail.

Now that AIG execs have continued on their path of stupidity, the Feds are outraged. It's like enabling an alcoholic. Don't expect something different just because you're "helping" them.

Now the Feds are trampling on the Constitution over a few million dollars while they throw billions and trillions into the void with no real plan. To try and hide their complete incompetence, they're pointing at those bad people at AIG who behaved entirely predictably.

And, now the predictable pattern of our new Democratic controlled Federal government has been established - one of incompetence and corruption.

12:08 PM, March 21, 2009  
Anonymous Anonymous said...

I kind of get the feeling must people don't earn their keep from performance based pay.

Basically, if you don't perform, you don't eat well. If you perform well, you do relatively well. It comes at various levels. It's a form of risk taking. Maybe I'm reading this wrong, but I am sensing some earning envy in here I would not have expected.

Consider that nothing happens until somebody sells something. Whether it's an idea, a philosophy, a product, self esteem, self doubt.

Like I've stated before, they say the oldest profession is prostitution. Well, it's not. She had to sell that "thang" first.

What is Obama selling? What is congress selling? The sales pitches are of fear and envy. The product they're pitching is disguised as Robin Hood like. Robin Hood took from an evil government and gave back to the people. That isn't what's happening now. The government is actually taking away from all of us while making it seem they are only taking away from the evil ones who keep the rest down. If a neurosurgeon makes no more money than a trash collector, it won't matter which one operates on your brain.

I don't want to dwell on where this can possibly lead. I do know where it looks like it's going. We all do. The thing that bothers me most is the fact that none of those dragging us down that path are even attempting to deny it.

7:33 PM, March 21, 2009  
Blogger uncle ken said...

mmbox to gooleo:


("We attack Pearl Harbor at dawn!")

7:17 AM, March 22, 2009  
Anonymous Anonymous said...

I guess mmbox read "The Japan That Can Say No".

9:37 AM, March 22, 2009  
Blogger Roci said...

I find it amazing that so many people feel as if they have a right to run a major corporation by mob rule just because Congress gave them a bunch of money. There was no contract. it was a gift. What they do with it is no one's business. Is anyone in congress complaining about all the money they got in campaign contributions? no. Are they going to give it back to the "taxpayers"? Again, no. Taking govt money does not make AIG a part of the government. We don't get to be outraged about their internal compensation rules, even if those rules seem absurd. If you want to set executive pay, become an executive. Otherwise,mind your own business.

Where do you think the trillion dollars of "stimulus" is going? You don't think a whole lot of people are going to become millionaires by taking their cut of that?

The problem is Congress giving your money away, not what the receiver of it does with it after that.

5:18 PM, March 22, 2009  
Anonymous Anonymous said...


You can apply that immature "they can do whatever they want" to everyone else.

Taxpayers can say whatever they want - and they are. You got a problem with that?

Congress can implement any tax they want if it passes the Supreme Court - and they might do it. You got a problem with that?

If your point is that executives have a greater right to "do whatever they want" because they are executives, and thus better than everyone else, you probably have something to learn about life.

Taxpayers are rightfully irritated about seeing their money squandered by incompetent boobs.

5:29 PM, March 22, 2009  
Blogger cma said...

MB said...
"Taxpayers are rightfully irritated about seeing their money squandered by incompetent boobs."

Yes, they are. But this taxpayer worries less about the millions squandered by the boobs at AIG than he does about the trillions being squandered by the boobs in Congress and at the White House. 'You got a problem with that?'

BTW MB, just how far should we take this class envy thing? I mean, after we tax away all the 'excess' money made by executives, should we go after the greedy union members too?

You can certainly make the case that the pay and benefits of UAW workers is a factor in GM’s current financial mess. And hey, they sure make more than the average worker. So, why not slap a confiscatory tax on their compensation too?

In fact, why stop there? Why not find out what the average worker makes, and slap a confiscatory tax on anything over that? We can always give certain deductions that allow certain people to keep a little more money (based on need).

Then we’ll have the ‘ideal’ situation of, “From each according to his ability, to each according to his need.”

After all, “Congress can implement any tax they want if it passes the Supreme Court,” right?

10:22 AM, March 23, 2009  
Blogger Keyester said...

"Going Galt" means backing down on basic productivity; the modern day slacker. A man's purpose was once to find a suitable bride and raise a family with her. Now that women dominate employment in numbers slightly higher than men, they will have to work to provide for men. Not through marriage, but through higher taxes. Who will women marry if their are no men to provide for THEM? Going Galt means dialing down a man's drive to succeed and provide and lead. This is happening now.

5:13 PM, March 23, 2009  
Blogger Sad_Dad said...

Going Galt?

I would like to see a good article on this subject, I don't know enough about this to even comment on it. But from the sounds of it doesn't sound very reasonable meaning, I don't think anything like that would or could actually happen the chances are very very low. How can something like this work when we can't even stand up for ourselves and speak out about the injustices of men in the family court, or get equal treatment for men in false alegations, or get a fair break with the female sex offender discounting???

3:58 PM, March 24, 2009  
Blogger Alex said...

sad_dad - not everyone will be accepted into Galt's Gulch. You must be extra worthy.

8:50 PM, March 26, 2009  
Blogger Sad_Dad said...

Huh? Your kidding right?

2:07 PM, March 30, 2009  

Post a Comment

<< Home