Posted by Marc Hodak on November 21, 2010 under Movie reviews | 
I suppose I was expecting a reasonably complete, if not entirely coherent, exposition of the causes and consequences of the financial crisis of 2008. What I got was the Mother Jones view of the financial world, and beyond. A more appropriate title would have been “Hack Job.”
In this film, director/writer/producer Charles Ferguson spins a morality tale of capitalists rising up like a beast to devour the working class. It’s not an original story, but it is imaginatively set in the modern day, like an avant-garde King Lear production. As in any good morality tale, the villains are presented with ominous music and foreshadowing innuendo. And the villains are many. We start with Morgan Stanley, a small 1970s partnership of bond dealers reportedly earning $45,000 per year. This seemingly harmless firm transforms into a behemoth paying its tens of thousands of employees an average of hundreds of thousands per year.
Then we have Goldman Sachs, doing what bankers do best, only better–unbelievably better, in a way possible only for one who has made a pact with the devil. Read more of this article »
Posted by Marc Hodak on November 18, 2010 under Government service, Invisible trade-offs |
As the TSA begins offering U.S. citizens the choice between having their genitalia displayed on a screen or having them groped by an agent, a top TSA Administrator defends the intrusion with this question:
“If you have two planes, one where people are thoroughly and properly screened and the other where people could opt out of screening, which would you want to be on?” he asked.
Frankly, I think the choice above is a tough call because I put so little credence in the efficacy of our full-blown security theater, but I do appreciate at least some passenger screening. But the question itself is simply a TSA administrator’s leading question, a form of intellectual coercion, designed to justify the physical abuse. He could have asked his question a million different ways that would better reflect the sensibilities of the citizens whose intelligence he insults:
1) “If you have two planes, one where people are thoroughly and properly screened*, and the other where they they are screened marginally better than they were in the 1990s, which would you want to go on?“
2) “If you have two planes, one where people are thoroughly and properly screened*, and the other where they just had random bag searches and well-trained agents ready to ask additional questions, which would you want to go on?”
3) “If you have two planes, one where people are thoroughly and properly screened*, and the other where certain fliers were non-randomly selected for screening, which would you want to be on?” he asked.
I know the last alternative is an invitation to racial profiling, but as someone with somewhat Moroccan features, I might still choose an airport security system where I’m slightly delayed going through it, but I’m unlikely to be delayed behind Pa Kettle, Grandma Myrtle, and little Bobby and Susie, waiting their turn to be searched for shoe bombs and box cutters.
And if the government really had any conviction around that administrator’s question, it would allow the airlines to give their passengers a choice among screening regimes, including opting out, to test the regulators assumption that people would tolerate any intrusion in the name of safety.
* I.e., told to remove their shoes, separate their laptops from their other baggage, present their liquids in plastic bags of an approved size, and parade before a denuding apparatus…
Posted by Marc Hodak on November 15, 2010 under Executive compensation, Reporting on pay, Unintended consequences |
Greg Maffei comes out on top of the sweepstakes he unwittingly entered with a reported $87 million in “Total Direct Compensation.” And the corporate governance critics will be ticked off if any of that consists of company-paid security for him or his now-targeted family.
Ever since regulators decided that public display of how much certain people make was a good idea, we’ve been getting “Best Paid” lists. The SEC has gone through conniptions to get the display right, but we are still cursed by the muddle reporting that arises out of muddled thinking and the muddled board reaction to it.
The WSJ tries to guide the wonks in a “How to Read a Proxy” sidebar highlighting the “Summary Compensation Table” (SCT), from which the WSJ rankings are basically derived. As the WSJ helpfully points out with regards to two of the seven columns in that expensive proxy real estate:
[The term “bonus”] doesn’t include everything normally considered a bonus. Also look under “non-equity incentive plan compensation.”
Why is this so complex? Because before looking at a bunch numbers, it helps to know what you’re really looking for.
Read more of this article »
Posted by Marc Hodak on November 4, 2010 under Reporting on pay |
The magic words “rising Wall Street bonuses” still can command a headline. The WSJ used that headline to report a whopping 5% rise in bonuses at “Wall Street” firms. (Whatever that means. I mean, is Bank of America, in Charlotte NC, a Wall Street firm? What about the hedge funds strewn across the land, but not generally in Manhattan, which many have fled? All of these firms were included in the survey report.) The bulk of jobs most people most closely associate with Wall Street, i.e., stock and bond traders, apparently dragged down that average:
According to the survey, bond traders will see bonuses for 2010 decline 25% to 30% from last year, while bonuses for stock traders are expected to shrink 20% to 25%.
Not reported is the fact that most of these Wall Streeters have had substantial salary increases precisely so that their bonuses won’t be so visible. It worked.
The most annoying point of this story is the obligatory quote from the fussbody public official who purports to speak for me:
Michel Barnier, the European Union’s financial-services commissioner, recently said that “more could be done” in the U.S. on “reforming compensation.” “If we do nothing, it means that we have not drawn the right lessons from the crisis,” he said.
“We” Mr. EU regulator? If you are going to use that bureaucratic, aggressive, passive voice to urge government officials to grab more money and power attacking–of all things–the greed of others, hey, I’m used to that. But kindly leave “we” out of it.
