When CEOs lead companies through good times, they deserve vast rewards. When they lead companies through bad times, they deserve vast rewards for sticking around. Funny how that works, no? Yglesias thinks this through a bit:
After all, the underlying premise of our finance-led rush to hyperinequality has been that the rich are very very very very different from you and me and that it’s so excruciatingly important that we maintain adequate incentives for them to ply their trade that we should ignore the immense damage rising inequality does to middle class well-being.
One we realize that that’s not the case, that there’s no “magic†at work in the financial field and people are just mucking around I think that has quite radical implications. If nothing the CEOs and top fund managers are doing makes them worthy of taking the blame when the crash hits, then they also don’t deserve nearly the share of the credit — and money — that they got while things were going up.
Expect this point of view to get approximately zero airtime in our ongoing social and political conversations. Indoctrination is a hard thing to overcome.
Amit
so let’s say we get rid of the current auto CEOs, which I have no problem with, who are we to replace them with? There probably are people willing to take the job for $150K/year with no stock options but how do we find and vet the business leaders who will actually turn these companies around? The answer in my opinion is that we won’t and we should let these companies fail and then the best business leaders will pick up the appropriate pieces and compete against each other and reinvent the auto industry in this country.
one of my postings on the topic: http://bearingdrift.com/2008/12/06/fool-us-twice-shame-on-us/
MB
You can’t possibly believe this.
Amit
its obviously not that simple but when the current assets are sold for pennies on the dollar, then you will have entrepreneurs buying up the pieces that are profitable and making investments in future technologies (hopefully)
my overall point is that its going to be harder to find someone to replace the fired CEOs