Punishment for recession executives

[Jmayer20]

I wanted to call it "Should the executives that caused the recession be punished?" But I ran out of space.

The government balled these people out. Normally the way capitalism works would be that these people would go bankrupted. They would have lost every thing. This is the incentive that makes people be responsible and it shows people this is what happens when you are not responsible.

The problem is the government balled these people out with out some sort of replacement punishment in place. This causes executives to think "hay it does not matter how careful I am or how much I screw up. The government will ball me out." If fact there is an incentive to not be careful because worst case scenario the government will ball me and best case scenario I make alot of money.

Now I am not arguing for or against the ball out. What I am saying is there should be some kind of system in place that punishes people who do this. Some sort of law that makes it clear that if you endanger the stability of the economy there will be consequences. Now some of you are probably thinking that's socialism. But the fact is it is socialism for the government to ball these people out in the first place and unless we do some thing you will have more ball out with your tax dollars and the economy is just going to get more and more unstable until in collapses.

[Camarohusky]

There is a system in place to punish executive who do such bad acts, but in the end the system is so broken that the executives rarely get punished.

The SEC and DOJ have the power to prosecute executives on fraud. The DOJ can only prosecute intentional fraud that rises to the criminal level, so negligence, even gross negligence, is not available for them to go after. The SEC can target negligent acts, but often works with the executive to ensure the corporation covers the payment (i.e. that the shareholders and consumers pay the cost). The DOJ is run by attorneys who want to work for the Cromwells and Cravaths who represent Wall Street. The last thing they want is a hole in their golden parachute caused by making Wall Street enemies, so they back off. The SEC is known for rampant greed, soft tactics, and being in bed with the parties they are tasked with watching.

There is the private class action option, however, due to a separate problem in the 1980s, the safeguards of insurance and indemnification were created. They were created to keep liability from reaching executives and directors to easily, thus scaring talented people away from the position. Howver, the protections were made too powerful. The protections are so strong that they protect directors and executives even when they acted with gross negligence or in many cases, all out fraud. The settlment nature of these suits means the corporation doesn't get to investigate whether the director was at fault, and the corporation can be sued for a wrongful denial of indemnity, so they choose to be safe and indemnify everything.

So the system that is intended to keep bad acts from happening actually encourages those very bad acts. Instead of having severe consequences for bad acts there are NO consequences.

[Jmayer20]

To Camarohusaky

First off I wouldn't call those people talented seeing as how they screwed up. When they screwed up and hurt there company's rather then getting punished they were rewarded with massive bonuses.

Also the point I am trying to make is that the current system does not work. If the system for punishing them does not work then we need to either fix it so it can punish them effectively or make and try a new system. Because just sitting around letting things go the way they are is not going to solve the problem.

[Iron-Hampster]

At 8/15/12 12:27 PM, Jmayer20 wrote:

Now I am not arguing for or against the ball out. What I am saying is there should be some kind of system in place that punishes people who do this. Some sort of law that makes it clear that if you endanger the stability of the economy there will be consequences. Now some of you are probably thinking that's socialism. But the fact is it is socialism for the government to ball these people out in the first place and unless we do some thing you will have more ball out with your tax dollars and the economy is just going to get more and more unstable until in collapses.

This part is where you went way out of whack. The first bit of your post perfectly explained why government intervention did more harm than good. Now you are suggesting another form of government intervention that punishes people for what might possibly be an honest mistake. But the one part that you forgot, the most important part was where you described exactly why government intervention wasn't even necessary in the first place.

The truth is, they knew they were going to get bailed out by the fed before this even happened, its just the nature of central banks because the way their government backed businesses work. They make investments, and when they profit, they pocket the money, when they lose, they charge it to the bank, and had there been no government to enforce a monopoly, that would have meant giving your competition a really nice gift.

[Jmayer20]

To Iron-Hampster

I looked at my post and I do not see any part where I say that the government should not have any intervention. Could you please explain what you mean by "But the one part that you forgot, the most important part was where you described exactly why government intervention wasn't even necessary in the first place."

Also if you do not want the government to get involved then what is your solution because if we keep things the way they are the economy will just get more and more unstable until it collapses.

[Iron-Hampster]

At 8/15/12 10:20 PM, Jmayer20 wrote: To Iron-Hampster

I looked at my post and I do not see any part where I say that the government should not have any intervention.

hinted it here: "What I am saying is there should be some kind of system in place that punishes people who do this."

Could you please explain what you mean by "But the one part that you forgot, the most important part was where you described exactly why government intervention wasn't even necessary in the first place."

your post was implying that these people did what they did knowing that the government (or in this case, a privately owned extension of government) would bail them out, but under capitalism, they would never be able to get away with such a thing because they would go bankrupt, providing an incentive not to loan money to people who can't pay it back.

Also if you do not want the government to get involved then what is your solution because if we keep things the way they are the economy will just get more and more unstable until it collapses.

my solution would be to get rid of the Fed's monopoly on our currency by opening up their market to competition, and to remove regulations on banks.The ones that prevent them from committing fraud should be strengthened but the ones that force them to loan money to people who they don't trust to pay back should be done away with.

This would also make it easier for new banks to appear, ensuring that interest rates are always competitive, and that even with affirmative action style regulations being lifted, less fortunate people will always be able to get a loan when the current economy calls for it, unless you are trying to help your competition of course.

That would cut off any cause for economic collapse on the bank's end, the rest would be up to the government not to fuck up, that is my solution.

It wasn't until Austrian economics were abandoned for Chicago and Keynesian economics when the market became unstable.

[morefngdbs]

If you were going to prosecute people, you'd have to start with the Government, particularly the President all his financial advisors, the Fed leadership, the Regulatory Agencies. most iof not all of the Major Bank Ceo's, most if not all of Wall Street, the Comex...the list just goes on & on...the metal fraud alone would take years of court time. The Commodities rule chages that allow people to be fleeced by huge hedgefund controllers.

The whole fucking system is rotten to the core & it is part of the reason China is now building relationships with many ohter nations to trade directly without American currency. Its why The BRICS nations are doing the same thing, Other Nations have caught on to the bullshit which is the American dollar & it is slowly unraveling & what are America's chances of real change .... Well with 2 Presidential candidates, Tweedle Dee & Tweedle Dum running for office with neither having a fucking clue or a plan on what to do....we'll all just have to wait & see how long we continue to suffer, before a collapse & the real pain starts !

Just an FYI , for what has been done to the American Dollar by the Banksters with the full backing of many Presidencies, in a comparison makes the Madoff Ponzi scheme look like the theft of a bag of peanut shells !

[ToddM]

At 8/16/12 09:15 AM, morefngdbs wrote:

What do you suggest to help the American economy instead of your doom and gloom that you always say?

[morefngdbs]

At 8/16/12 12:50 PM, ToddM wrote:

At 8/16/12 09:15 AM, morefngdbs wrote:

What do you suggest to help the American economy instead of your doom and gloom that you always say?

;;;
Go back 15 -20 years ago & whatever the banking, investment, commody, metals regulations were at that time reimplement them immediately.
Regulate your banking system. the Fed does not need to exist
IF the US can print Treasury Notes & sell them to the Fed which they have to pay interest on.
The treasury can simply print Dollar notes & pay no interest,
Remove income tax from anyone who earns less than $100,000.00
Then above that level start a 1 or 2 % tax that increases as your income rises.
People who make money off of money 50% tax on the income.
put a sales tax on every good and service, that way even drug dealers & thioeves will have to pay taxes.
Every time they buy anything they will be providing tax money to the pool that is used to fund Government & Social Services
Your social programs are out of whack with reality, you need to get rid of putting people in prison forever....the 3 strikes bullshit for shoplifting type charges is crazy.
You need to pull your military out of most of the World...you can't afford it.
THe world doesn't want you policing it, let the shit holes of the world kill,starve,screw themselves.
Reduce the size of your military, you don't need 200 + police services.
Shut down most of them, look at what you had 25 years ago, cut yourselves to the same amount of police agencies. Shut down the rest.
Stop sending your manufacturing jobs out of the country so a few elite people can make even more profit, You don't produce in the US, you need a permit to sell in the US, an additional 'sales' tax on entry . make companies realise its just as cost effective to produce items in the US as to go to India, China ,The Phillipines.

THere's a start, Todd M...but you see that would take money out of the Banksters and the Elites pockets & the only one allowed to have their pockets emptied in the USA anymore are the working class &they are getting poorer & poorer.
So if something isn't done, it will right itself...bu tno ones going to like the death 7 destruction that will happen if that comes to pass, once enough people can no longer feed themselves the rule of law will no longer matter, when it comes to the masses will to survive !

[Iron-Hampster]

At 8/16/12 12:50 PM, ToddM wrote:

At 8/16/12 09:15 AM, morefngdbs wrote:

What do you suggest to help the American economy instead of your doom and gloom that you always say?

I kinda understand where he's coming from.

[Warforger]

At 8/16/12 01:48 AM, Iron-Hampster wrote: It wasn't until Austrian economics were abandoned for Chicago and Keynesian economics when the market became unstable.

Whoa whoa whoa, are you insane? Under the old economic system we were in a constant cycle of depressions and panics usually because of mismanagement by investors or banks, such as the Panic of 1819. Into the late 1800's the average person would often take a huge dip in their income during economic downturns and then get a laughably small boost during a boom(i.e. businesses figuring out they could operate with less money and send more to the CEO kind of how these recession executives behave). Whenever the government tried to reinforce hard money by buying out gold and silver it often led to the economy getting worse like the Panic of 1837. I mean hell when America got into its second worst depression in its history in 1893 the government did nothing and well everything got progressively worse until things started to recover towards the end of the decade. You'd also have to be insane to suggest that the economics worked when they set up a disaster waiting to happen during the 20's when the economy became concentrated in the automobile and housing industries, which of course meant that if those two industries failed the entire economy gets dragged along, which is what happened.

Under the modern economics system the worst we've had has been recessions, whereas a Depression happened every 40-50 years it seems (1893-1929 isn't very long) ever since FDR created the safety nets such as federally insuring bank deposits and getting rid of hard money the economy is more at the very least predictable which means more stable. Not necessarily under control obviously but we have a textbook solution to recessions which has been denounced by most people i.e. the stimulus. Now I'm not saying all Federal intervention is good, but it's better than no Federal intervention at all.

[Korriken]

At 8/15/12 12:27 PM, Jmayer20 wrote: I wanted to call it "Should the executives that caused the recession be punished?" But I ran out of space.

While we're at it, let's lock up these people as well. Credit (and blame) should be given where it is due.

[Jmayer20]

Look it seems to me things only went haywire when Bush got ride of most of the laws that would have prevented this. What was left had so little power left that all the people who enforced those regulations could do was go to the executives and say "I noticed you are doing something that you hurt the economy. Could you please stop ...... please?"

[Camarohusky]

At 8/17/12 11:45 AM, Jmayer20 wrote: Look it seems to me things only went haywire when Bush got ride of most of the laws that would have prevented this. What was left had so little power left that all the people who enforced those regulations could do was go to the executives and say "I noticed you are doing something that you hurt the economy. Could you please stop ...... please?"

No, not really.

Definitely some of this was caused by the deregulation from 2001-2009. However, much of the problem was set in motion years, if not decades, before that.

The overprotection of executives and directors started in the 1980s. The golden parachutes for DOJ and SEC officials have been going on for a long time (probabliy cine the beginning). Everyone was drinking the 1990s kool-aid. This includes not only the politicans and Wall Street types, but the average Americans who thought they could buy a house far out of their means, and pay it off by gaining ever increasing home value, or those who thought they deserve a flat screen TV, even though they cannot afford to drive to work, or buy new clothes for their growing children, and so on and so forth.

[morefngdbs]

At 8/17/12 02:13 PM, Camarohusky wrote: No, not really.

Definitely some of this was caused by the deregulation from 2001-2009. However, much of the problem was set in motion years, if not decades, before that.

;;;
Absolutly I agree with you on that 100 %

started in the 1980s. Everyone was drinking the 1990s kool-aid. This includes not only the politicans and Wall Street types, but the average Americans

I believe it started earlier & Nixon't taking the American Dollar off the Gold Standard hastened
the rise in prices, the falling value of the US Dollar & deregulation & your comments about the elite Exec are right on the mark.