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Bri_L's avatar

Will the higher ups in the financial industries really change?

Asked by Bri_L (12206points) January 23rd, 2009

I just read this:
“Unemployment in the United States has risen again. It went up by one when John Thain the CEO of Merrill Lynch departed shortly after the loss-making financial group was absorbed by Bank Of America. It has emerged in the last few days that Mr Thain spent more than a million dollars re-decorating his office – and paid the interior designer Michael Smith $800,000 to get it looking just the way he wanted. That’s apparently eight times what Mr Smith is being paid to makeover the White House for the Obamas. My favourite item on Mr Thain’s shopping list – which has a flavour of decadence you’d associated with early Elvis or one of the later Roman Emperors – is a waste bin that cost $1,400 (£1,000). Look out for a more austere, chastened version of capitalism in the coming months (and maybe years) of recession.”
from here and it ticked me off. I don’t understand how this can possibly be justified. Granted, I have no financial training.

Could someone explain how this makes sense to do?

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6 Answers

googlybear's avatar

Ummm….well you see….uhhhhhh…..I’ll have to get back to you on that….

critter1982's avatar

I think in too many situations it is greed that got them in the position they were in to begin with. And when they get to the top I doubt most of them try to change. The only reason most of them want to be at the top to begin with is because of the money. Not too many CEO’s would ever deal with all of the stress and time if they weren’t financially rewarded for the time they invest. So no they will never change.

avalmez's avatar

What is it exactly that we want them to change? The desire to earn money (aka, greed)? Remember the words of one very well to-do fellow to the effect that money is just a way of keeping score – you don’t join the game just to earn money, but to succeed and win. Money is the measure of your success

That form of motivation (greed) benefits not just the guys at the top, but those under them that depend on them to run the organizations they work for in a manner that enables the organizations to provide paychecks.

It may be strange to think this way, but greed may be as basic a human desire as hunger and sex are basic :)

Now, I don’t mean above to wave your question off. I only mean to make a case for greed of some form.

One expects that the guys at the top act ethically and certainly within the bounds of the law. But, both are subject to interpretation and a highly motivated individual will stretch his/her interpretation to an extent that leads us to ask, will they ever change?

In other cases, “they” will knowingly break the law, and at that point we ask will the appropriate agencies ever be able to do their jobs well enough to catch these guys before they do much harm?

Obama’s current drive to increase government regulation of business is of course an attempt to mitigate the eventual recurrence of the current mess we’re in. i’m not sure i agree with the direction he’s taking us in, but i think i do agree that something needs to change and so am not vehemently opposed to Obama’s plan.

And ultimately I guess the best we can hope for is that we are better able to detect scams, frauds, and collapses when they are on the horizon, and make the changes needed to enable to do so when we fail – one side of human nature working to protect us from other sides of human nature.

Bri_L's avatar

@avalmez – I really like your answer. I don’t feel that it “waved off” the question at all.

“That form of motivation (greed) benefits not just the guys at the top, but those under them that depend on them to run the organizations they work for in a manner that enables the organizations to provide paychecks.”

In an all to often disproportionate way. I would agree with that statement if it said “could” benefit. But I happen to believe that greed begets more greed and that, by definition, is focused on ones self. The paychecks for the little people are a means to an end in their eyes as far as I am concerned.

Ron_C's avatar

I sure don’t know what they are teaching kids in the university these days. When I had marketing classes, we were told to be honest and build relationships with customers. We also learned that your employees deserve a stake in the progress. Most businesses operate like that except finance.

It seems that executive pay is the most important thing. Bank tellers can earn minimum wage while CEO’s spend a half a million dollars for their office. This happens even when the business is failing. I have taken my money out of the Bank of America and put it in a local bank.

None of the bail out money should have gone directly to banks. It should have gone to manufacturing, small business, and individual depositors. Unfortunately, justice is a foreign word in the U.S.

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