Tuesday, October 07, 2008
Why CEOs Should Be Held Accountable
A friend of mine from Canada sent me the link to the following:
http://abcnews.go.com/Blotter/story?id=5973452&page=1
Less than a week after snagging 85 billion dollars from taxpayers they executives run off and spend a half million dollars on massages and manicures. The truth is AIG's executives and top people have been making unsound financial decisions for years that have led up to this. Tracy used to work for AIG until she and many others without warning lost their jobs. Though in the long run it worked out well for her at the time it couldn't have come at a worse time really. But she, like the majority of Americans, are middle class and are always the ones expected to pay for the mistakes. I told Tracy at the time that something was fishy because the biggest reason companies lay off people is to cover losses. Think about it, every time a company is losing money you read they lay off people. It's the quickest and surest way to cover losses. It took some time but eventually it came out AIG was covering losses. This link is to an article from 2005.
http://blog.kir.com/archives/001857.asp
"AIG, the largest insurance company in the U.S., admitted transactions that "appear to have been structured for the sole or primary purpose of accomplishing a desired accounting result." To make matters worse, state and federal investigators believe that the full extent of AIG's accounting improprieties over the past decade are even larger."
What is most interesting about this article is the author warns that AIG could suffer a financial meltdown and explains why - although he didn't think it would happen. Undoubtably he's thinking now he should have said he thought it WOULD happen. AIG isn't unique and unfortunantly this is probably common practice for the majority of corporations. Instead of being finacially responsible and save the money they prefer to get manicures and lay off people like Tracy when needed.
There are just three types of people. Rich, Middle Class, and Poor. George Carlin once said the poor people were there to scare the middle class into going to work every day. The rich need the middle class to be scared enough to go to work every day because that's where they get their riches from. Of course the self-imposed poor need us to go to work every day for them too. And by self imposed I mean those that choose to stay and benefit to the maximum from free support. Does it really matter anymore who I vote for?
http://abcnews.go.com/Blotter/story?id=5973452&page=1
Less than a week after snagging 85 billion dollars from taxpayers they executives run off and spend a half million dollars on massages and manicures. The truth is AIG's executives and top people have been making unsound financial decisions for years that have led up to this. Tracy used to work for AIG until she and many others without warning lost their jobs. Though in the long run it worked out well for her at the time it couldn't have come at a worse time really. But she, like the majority of Americans, are middle class and are always the ones expected to pay for the mistakes. I told Tracy at the time that something was fishy because the biggest reason companies lay off people is to cover losses. Think about it, every time a company is losing money you read they lay off people. It's the quickest and surest way to cover losses. It took some time but eventually it came out AIG was covering losses. This link is to an article from 2005.
http://blog.kir.com/archives/001857.asp
"AIG, the largest insurance company in the U.S., admitted transactions that "appear to have been structured for the sole or primary purpose of accomplishing a desired accounting result." To make matters worse, state and federal investigators believe that the full extent of AIG's accounting improprieties over the past decade are even larger."
What is most interesting about this article is the author warns that AIG could suffer a financial meltdown and explains why - although he didn't think it would happen. Undoubtably he's thinking now he should have said he thought it WOULD happen. AIG isn't unique and unfortunantly this is probably common practice for the majority of corporations. Instead of being finacially responsible and save the money they prefer to get manicures and lay off people like Tracy when needed.
There are just three types of people. Rich, Middle Class, and Poor. George Carlin once said the poor people were there to scare the middle class into going to work every day. The rich need the middle class to be scared enough to go to work every day because that's where they get their riches from. Of course the self-imposed poor need us to go to work every day for them too. And by self imposed I mean those that choose to stay and benefit to the maximum from free support. Does it really matter anymore who I vote for?
