Comments for Come On Sense

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:27:59 +0000

Frank, I think your suggestion makes a lot of sense. The only issue that I can see is the compensation question that started this discussion. Would you accept that the officers and directors of the company should also be liable for the costs involved with correcting the damage done by the corporation’s actions? It is the only way that I see to avoid the obvious strategy of reaping profits, doing damage and then declaring bankruptcy.

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:25:38 +0000

Frank Roso “Seems to me that the problem is a government which will prevent failure because it deems a company too large to fail. Let them fail. The government aided and abetted the risky behavior of banks. It also played favorites in the bail out. It further made clear its intentions in making it difficult for the banks to buy out of the arrangement. Again, let them fail. Failure hurts the investors, but it means that ALL of the taxpayers will not be on the hook.
The danger we now face is that we are entering an era of cronyism in which the government will call the shots and decide the winners. That is a surefire recipe for disaster. “

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:25:12 +0000

Jennifer, I agree but public losses are now disappearing. A federal government which was more than willing to bail out Chrysler last century is no longer willing to bail out or simply support the automakers, banks, health insurance companies or oil companies. Lobbying does not work like it used to – although it still does work. My sense is that we are entering a new era of corporate responsibility and it is going to be more difficult for a company to offload its negative impact on society.

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:24:58 +0000

Jennifer McFarland “The assumption that profit is private and risk is public assumes a safety net government surplus/savings account is in place to buffer losses. This is stating the obvious, but public losses can only go on so long before standards of living begin to erode. By then, we are a day late and a dollar short of alternative solutions to changing the dynamic. Ultimately, facts either align with or triumph over various ideologies.”

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:24:42 +0000

Frank, It seems to me that it can be an either/or question. If you read Michael Lewis’ book (The Big Short), he makes the point that central to the Wall Street casino was the idea that ‘to big to fail’ would cause the Federal Government to have to step in and cover their losses. They saw profit as private and risk as public. that is the dynamic that is changing. BP is facing a different set of options. I suspect that all corporations will find the same going forward.

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:24:28 +0000

Rich, Your question is the pivotal one. If a coal fired power plant in the mid-west pumps tons of carbon and CO2 into the atmosphere and the result is acid rain in the North East, should that company pay for the damage caused? If a company produces a produce that is defective, they are liable for the consequences. If a financial institution engages in gambling and bets against its own customers, should they be held liable for damage to those clients? But the newer question – the one that is driving the discussion now – ‘is a company that, through either accident, negligence or malfeasance, creates through its actions a cost to society, should the company be liable for covering those costs?

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:24:16 +0000

Rich Johnston “Define ‘damage’. “

Comment on Corporate Liability by admin

admin — Thu, 17 Jun 2010 23:24:01 +0000

Frank Roso ” If a company’s actions result in damage which cost people, of course, they should pay for the damage. Profit also benefits the public. This is not an either or question.”

Comment on They just get richer by admin

admin — Thu, 17 Jun 2010 23:21:43 +0000

Hi Earl, I would love to agree with you as to progress on holding top executives to account but unfortunately it has been very little. Despite wrecking the financial system through unrivalled greed I have not seen any banker going to jail yet. While the BP CEO is currently getting a grilling from Congress as one member pointed out he will eventually disappear with his golden parachute.
Of course there has been some high profile exceptions (Enron) but they are the exceptions.Yet the financial losses and damage to customers,employees,shareholders etc in many cases have been devastating(sic Banking). But I agree that you have to start somewhere.

Comment on They just get richer by admin

admin — Thu, 17 Jun 2010 23:21:29 +0000

Desmond, As you express such hopelessness, I expect to read of your suicide any day now! (grin> I believe that the process of change is well under way. It started by holding sitting directors legally accountable for the actions of the company. CEOs and investors have also been found guilty and sentenced. Regulations and oversight are on the rise. I agree with Michael Lewis (source of the quote) but his book was written in the 80s – some important changes have happened and continue to happen. The jails and legal system continue to be our best hope of change.