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economics
May 2008 
The Price of Any Departure Will Be at Least $159 Million
Posted on Oct 27th, 2007
by 
Joy Cassell
Joy Cassell
I took this headline from the NY Times. It was describing how, after presiding on one of the worse losses ever experienced on Wall, Street Meryl Lynch CEO E. Stanley O'Neal will have to be paid $159 M if he is fired by the Board of Directors.
Now as a believer in free market capitalism I do not seen anything inherently wrong in a buy out or salary so huge - except Meryl Lynch and many others in the sub prime mortgage mess, a mess of their own making (giving loans to individuals who cannot afford them is not sensible economically.) And thousands will loose their jobs as a result of decisions made by Mr O' Neil - and I doubt any one of them will get a severance buyout.
I read somewhere that what passes as free market economics these days is just socialism for the rich.
I am reminded of a common story, the goose that laid golden eggs. Basically a farmer had a goose that laid golden eggs, but he got greedy and wanted it faster so he killed the bird but when he opened her up there were no golden eggs to be found.
Now as a believer in free market capitalism I do not seen anything inherently wrong in a buy out or salary so huge - except Meryl Lynch and many others in the sub prime mortgage mess, a mess of their own making (giving loans to individuals who cannot afford them is not sensible economically.) And thousands will loose their jobs as a result of decisions made by Mr O' Neil - and I doubt any one of them will get a severance buyout.
I read somewhere that what passes as free market economics these days is just socialism for the rich.
I am reminded of a common story, the goose that laid golden eggs. Basically a farmer had a goose that laid golden eggs, but he got greedy and wanted it faster so he killed the bird but when he opened her up there were no golden eggs to be found.
Access: PublicTagged with: Economics
Hello ……. Good post!!!
What those mortgage companies did to peoples' lives is unconscionable, and no one, I don't care how high up on the food chain they are, deserves the type of “buy-out” that this freak is probably going to get. I would certainly give him something else, at the end of my toe!!! Preferably from the edge of a very high building. At the least, they all deserve to be thrown in prison for being thieves, having stolen the hopes and dreams of so many people. Didn't anyone even think what kind of a mess they were creating??? (Ok, rant done) …. Gem :-)
I little ranting if good for the soul :)
and no, my experience in the mortgage industry clearly indicates that no one was thinking long term - meaning the economic implications of all these bad loans. All these banks/financial companies who are now having to write off these bad loans, had the opportunity when they bought the loans to demand that underwriting errors or omissions be fixed (many people did not even qualify for the loans they had, I even saw loans where proof of income was not even done - I complained to no avail.)
The only thing worse than the current problem will be a bail out by the government, I sat in on meetings where I was told not to worry about bad loans because in the end the Feds will buy it (ie the tax payer will be assuming the risk while CEOs cash in)
Socialism for the rich.
Hey was I ranting? :) thank you for your comment.