Today it suddenly occurred to me how the US financial meltdown has come about and I have the solution to stop it.
Obviously the counting system being used in the US is devoid of negative numbers between 0 and minus many many billions. This explains how executives of large corporations can go merrily along, collecting their grossly inflated salaries, while they go down the tubes. They look at the balance book and if no one has said anything they think, “Well we aren’t making much but we aren’t in the red.”
But then at about minus $75,000,000,000 they suddenly realise, “Oops we are into red numbers now.”
See if only there were some intermediate negative numbers, they could actually know that they were in trouble long beforehand.
I think the problem is more to do with computers (and before that, cheques). It’s all virtual money, and any amount of financial sleight of hand can be used to shuffle around someone else’s money, temporarily create money that doesn’t actually exist, and put the same money in two places at once.
I propose that all business be conducted in cold, hard cash. Fraud will be slashed overnight, and vast negative sums of money should be less easy to rack up.
Plus, the CEOs will be made to feel marginally more guilty as they cart enormous wheelbarrows full of banknotes out of the building come bonus time.
Hmmm, you may be onto something here. Make these transactions in COINS, too. We have people complaining that the US dollar coin is too bulky and heavy, I’m sure that they’d be DELIGHTED when they have to pay everything in coins!
If you are a major financial institution, don’t invest in dodgy mortgages to people who can’t afford to pay the interest.
Lehmann Brothers - gone.
Al-Italia - already bankrupt, but propped up by the State.
AIG - system can’t afford them to go bankrupt.
HBOS - plagued by rumours.
Sounds like an excellent country to invade. It is a kingdom, so the people need freedom. It has the highest AIDS rate in the world, so the people need religion. It’s people have the the lowest life expectancy in the world, so collateral damage won’t be an issue.
But, but, but…that’s against CAPITALISM! And CREATIVE FINANCING! And all the other buzzwords!
Are minor financial institutions allowed to invest in dodgy mortgages, then?
Seriously, I think that if they managed to dig themselves into a hole, they should be allowed to dig themselves out of one. And the CEOs should be the first ones in line to have their pay/incentives/bonuses cut.
As President and/or CEO, why wouldn’t you? If things go well, you make a killing. If things go poorly, the government will bail you out. All the profit potential and none of the potential risk.
Besides, if you get turfed out by the new board, you’ve negotiated the terms of your release beforehand, and even if your stock options are now worth a lot less you’ll still get your $20 million in cash.
If business expects government is going to step in and fix things when they go wrong, business ought to shut the hell up about government interference.
What “yay capitalism” types never seem to cotton on to is that while the free market offers the greatest potential for profit and economic growth, it also offers the greatest potential for loss and economic collapse.
I’ve always been fascinated (in a WTF! way) when I hear stories about CEOs of major corporations who have been fired for gross mismanagement and then get “buyout” packages which are worth several years of their salary (particularly when they’ve had the job for less than a year. My first thought is, “Hey, I could do that! Where do I apply for a job where I can screw up and cost my employer millions of dollars and get rewarded for it?”
Only in The Land of Corporations. It’s a mutual appreciation society; CEO compensation is determined by boards of directors, who when they aren’t directing, are… CEOs themselves. So they’re all essentially guaranteeing each other’s salaries.
