02 August 2009

Should you plan to fail, if you fail to plan? Maybe not...

I can't remember where I heard it first, but as I mentioned in one of my previous posts, if you fail to plan, you should plan to fail. However, as we continue to see through Obama's stimulus package, that may not be the case all the time.

In a recent WSJ print article (Friday, July 31, 2009) entitled Bank Bonus Tab: $33 Billion, the authors discuss several companies including banks that "...received government aid money paid out bonuses of nearly $33 billion last year...despite huge losses that plunged the U.S. into economic turmoil." The article goes on to point out with respect to employees that companies such as banks and other investment companies "...pay for performance." OF COURSE THEY DO. Companies hire "rain makers" if you will because of their talent for bringing in revenue. Many employees have contracts with their employers that outline such compensation packages, and companies are required to pay such bonuses if the employee meets certain criteria. The article goes on to point out that on Wall Street "...top employees typically make 90% or more of their compensation in year-end bonuses."

The real question is "What would happen to these companies if the gov' didn't provide such larges bailouts in the first place?" What would happen to these employees' bonuses if there was no money to be passed around (for instance, if the company had to declare bankruptcy)? As far as I can tell, those employees would be S.O.L.! So, what we have here is a great case of what happens when the gov' goes trying to do too much. But wait...we're not done yet...

In addition to pointing out something most Americans don't really want to hear (but may still agree with), the SAME article goes on to say:
The Obama administration, meanwhile, is preparing to vet [BTW I love this word] pay at firms receiving "exceptional assistance" from the government. Institutions have until August 13 to submit proposed compensation details for the 100 highest-paid employees at each. The proposals will be reviewed by the Treasury Department's pay czar {another word I love], Kenneth Feinberg.
And yet once again, the gov's response is to try to provide "more guidance" in an area in which it doesn't belong! STICK TO WHAT YOU'RE SUPPOSED TO DO AS OUTLINED BY THE CONSTITUTION! With all due respect Mr. Obama, you've got a long way to go simply with your use of the word "stupidly." Hmmmmm....is there a lesson to be learned here?