“Liberals?” If you’re a conservative then you really have nothing to say because you have zero credibility.
We’ll listen to non-conservatives who criticize Obama, no one who supported Bush need apply.
Maybe in 8 years.
From your link:
Tying pay to performance. How socialist can you get? Really, I’m surprised you are not a lot more upset about the other parts of the plan.
Do you deny that pay so far has not been tied to long term performance? Do you think that’s a bad thing? Do you think the market can take care of it? If so, why hasn’t it?
Before going further, please define ‘Performance’.
I kind of enjoy Bachmann’s “Economic Marxism” stuff though; makes me think of “Photoprocessing Marxism”, “Beach Blanket Marxism”, suchforth and the like.
I’ll wait to see the proposal. I assume that the details will be left to the company. One good thing they might do is a clawback provision, for cases where goals were met by cooking the books, or when goals were met through an unsustainable level of risk, which led to an inevitable crash. In both those cases (and the second is stupidity in the long term, not fraud) it would be good for the company to reclaim payment that was not from true performance - which really boils down to shareholder value.
“From each according to their abilities, to each according to their tits.”
It probably is not defined specifically in the proposal. That’s what honest-to-goodness legislation is for. As a general rule though, a company’s performance is good if its assets are increasing or remaining equal, and bad if its assets are decreasing. There’s really no need to nitpick the word though, because I don’t think anyone is actually against the idea that an executive of a company going bankrupt should get a bonus equal to what he got while the company was booming.
So then it’s better to turn up the speed on the printing press, and thereby disappropriate the superrich to pay for begrudged social handouts of health care, and other bennies to those who couldn’t or wouldn’t join the corporate team? Stealth taxing by inflation is the only way to redistribute wealth in this country, but it comes at the price of expropriating also many who do not have very much wealth at all.
I don’t think any one is comfortable with soaring national debts. What scares me is that Obama’s people have been convinced that it is necessary. I suspect that the economy is worse than we know. I see frustration and panic. I doubt Obama would be pushing for these programs if he was not scared that we are still in real trouble.
The world is turning its eyes to America looking for an answer. There is some background rumbling because the mess is our fault. But we are the only ones who can fix it and they know it. China would love to take a walk and tell us to suffer for what we stupidly did, but they don’t dare. It would make a disaster for them too.
I believe Obama sees solving several problems at once necessary for long term health of America. First is the economy. Then medicare and medicade can take us down again. They have to be dealt with. They have been pushed back as far as they can go. We can not let millions go without medical care. We can not compete in the world if we have to fold medical coverage into the costs of our products. That will be waiting to get us soon ,if we don’t do something about it.
We have neglected our infrastructure for decades. It is not a make work program. We are a society that does not plan long range. We fix things when they break. It is easier to put off putting money in bridges and roads, because they are not likely to break during any specific term. Some vague time in the future the bridge will fall. I wont be governor then, so why do I need to do something now?
So, I’m a super-genius CEO whose specialty is to join failing companies and turn them around. I do this by selling off weak business units, closing down unproductive product lines, and investing in new products. This may mean a year or two or lower profits or even losses as the company restructures.
Good performance or bad?
Next, let’s try a CEO chosen to run a car company. The company is barely profitable, and has long-term challenges because the products lines are old and not competitive. So, I start major new R&D programs for new engines and chassis. This costs a fortune, and won’t show a return for years, but eventually will make the company more competitive. The first five years of my tenure may actually be dominated by higher costs and declining sales as the current fleet of cars gets even older and less competitive. But if I hadn’t made the bold changes I did, the company might be a little better off today, but will fail in ten years.
Good performance or bad?
I’m a CEO who gets hired to run a company that’s just average. I decide to boost annual profits by slashing R&D spending, firing a bunch of employees and making the others work harder to pick up the slack, cutting budgets across the board, and delaying payments to suppliers. In the first year or two, company profits increase, but I’ve put the company on the path to ruin.
Good performance or bad?
I’m a new president who ‘invests’ heavily in things like energy, education, and government services. I claim that this will help the long-term health of the country, but for the next ten years, deficits will be higher taxes will be higher, and things will be more difficult. Trust me, I say. These investments are required so that our country will be better off in 50 years.
Good performance or bad?
I hope you can see where I’m going with this. Performance does not equal profitability. Large corporations are complex. Not all good decisions show up on the bottom line in a short time period.
It seems to me that tying executive pay to annual stock performance or profitability is going to encourage exactly the kind of behavior a lot of people say corporations do too much of - focusing on the short term, trading off sound business decisions for short-term profit. Clearly, that’s not all what performance is. It’s much murkier than that. This means governments will not be able to know, and we’re just going to politicize corporation decision-making.
You have hit on a fundamental problem with capitalism. Profits and losses are the deciding factor and are gaged yearly. We do not invest long term. It would cost you your job if you invested in future products even though the long term stability of your company would depend on it. It is difficult to skip taking profits when the short term bottom line determines your salary and bonus.
The only problem with this statement is that it’s completely wrong and bears no relationship to reality.
In fact, it’s governments that are short-sighted, and businesses that tend to take the longer view. In today’s political climate, it’s almost impossible to make hard decisions that will not pay off for a decade or two. For example, many of the state pension plans are going broke because politicians haven’t had the fortitude to make hard decisions to fund them properly. Federal entitlement spending have something like a 55 trillion dollar shortfall, and politicians won’t do anything about it. There’s a fiscal tsunami coming in about 20 years, and everyone knows it, but nothing is being done.
On the other hand, GM and Ford have development programs that won’t bear fruit for 20 or 30 years at the earliest. Boeing bet the company on the 747 - a plane that would take ten years to develop and for which there was no existing market when the design was approved. Boeing was investing in SST technology in the 1960’s. GM’s EV-1 project was twenty years ahead of its time.
In my own company, I just finished a five year development project, and long before it was finished we had plans for the next generation, and a rough outline of the generation of software after that. We routinely do large project planning out a decade or more.
Microsoft spends billions on R&D - much of which isn’t even remotely close to commercial adoption, or which even has commercial applicability at this time. Motorola has funded basic science research barely related to their main product lines. Companies like Dow and Corning do advanced research in materials that, even if they could be proven useful, wouldn’t make it into new products for a decade or more.
I could go on. There’s simply no evidence that companies are more likely to engage in short-term thinking than is government.
However, having the government engage in micro-management of executive compensation and to allow bonuses based on annual performance will help push companies into thinking in the shorter term.
Wait a minute… I thought the problem government wants to solve is that corporate execs are getting salaries and bonuses that are NOT tied to annual performance. That’s what everyone’s bleating about, anyway. So which is it? Is it a good thing or a bad thing? What is it you want government to do exactly?