The argument is free market (Capitalism) will fix everything; will it?, it got us to where we are, which includes expensive insurance (companies allowed to drop you if you start failing claims), and the people in charge (CEO’s and such) making big bucks for firing people and keeping things working the way they are. Free market is nice, but doesn’t it have limits?
From Rush Limbaugh on the Jay Leno Show
Leno also tried to get Limbaugh to agree that Wall Street CEOs should not be making billions of dollars off schemes that hurt investors. Limbaugh strongly disagreed. “The market will fix itself,” he said. “It’s none of my business what they make, Jay, it’s certainly none of yours, and it’s certainly not Barack Obama’s what anybody makes … If you believe in the capitalist system, you have to erase from your whole worldview what somebody needs.”
(Comments from Readers of Huffington Post)
I agree with Rush, if we do not regulate the market, it will fix itself. In 5, 10, 20 years it will fix itself. Lower high class people will be middle class, middle class will joing the ranks of the poor. Everything bought and sold in this country will come from Malasia and other such countries. Nobody hear will be able to afford any of the goods anymore. The top 1/2% of the population will own 98% of the wealth. We will cease to have a market. Thus it will fix itself by simply imploding, disolving.
How the system is supposed to work is people make things, those things get sold to other people, you get paid for making the things, the owner gets money for selling things. That is true Capitolism.
You stop making things and simply buy from other countries you have lost. Your banks engadge in credit default swaps as money making schemes you have lost. You have to sell your house, or have it taken by the bank, because you get sick and have no money to pay doctors to get healthy you have lost.
CEO Pay Fell Just 6.4 Percent From 2007 To 2008 – By Rick Newman
It’s good to be CEO, even in a recession. Especially in a recession.
Hewlett-Packard’s stock price fell 29 percent in 2008, and the company announced plans to lay off 25,000 workers after it acquired Electronic Data Systems. But CEO Mark Hurd didn’t feel the pain. Hurd earned $43 million in 2008, a 73 percent raise from his 2007 pay. Perks included $136,000 worth of personal travel on corporate jets, paid for by shareholders, and $7,472 in travel expenses for Hurd’s family, according to an analysis of HP’s annual proxy filings by shareholder activist Eric Jackson. Several other top HP executives earning multimillion-dollar pay got double- or triple-digit raises.
[See 10 gaffes by doomed CEOs.]
Hurd has been a strong CEO since he took over in 2005, generally credited with enhancing HP’s profitability after a period of drift. But the big pay hikes during a dismal year are generating some of the toughest criticism of Hurd’s tenure. “There are some very troubling aspects about how he, his management team and his board approach executive compensation and governance,” writes Jackson. “Investors should steer clear of this Silicon Valley icon until it gets its act together.”
For all the talk of reining in CEO pay and enacting financial reform—even from some CEOs themselves—it’s beginning to appear that very little has changed in the way companies are run and executives get paid. A new survey of CEO pay by research firm the Corporate Library finds that median take-home pay among more than 2,000 CEOs fell by 6.4 percent from 2007 to 2008, the first time on record that CEO pay has gone down instead of up. But that was in a year in which the stock market fell by 37 percent and the economy lost 2.6 million jobs. By almost every measure, the vast majority of companies performed far worse in 2008 than in 2007. “While the downturn has affected pay, the link between pay and performance remains weak,” says the report. “Such a minimal decline in pay given the massive decline in shareholder value is hardly an adequate response.”
(Article Continues) – http://www.usnews.com/money/blogs/flowchart/2009/09/24/why-ceos-survive-recession-better-than-others
Citigroup’s New Plan: Fewer Locations, Most Lending Limited To The Wealthy
Citigroup, which has received $45 billion in TARP funds — in addition to billions in government asset guarantees — has come up with a brash tax-payer funded restructuring plan: cut U.S. locations and limit most lending to only the wealthy.
As AP reported morning Citigroup is reportedly planning to reduce its “retail footprint to just six major metropolitan areas and limit most lending to wealthy customers.”
For now, anyway, hopes that the U.S. taxpayer’s investment in Citigroup would actually boost lending, seem to be rather unlikely.
Here’s more from the AP:
“Citi’s management is looking to reduce the bank’s U.S. consumer lending to mainly credit cards and “jumbo” mortgages, The Wall Street Journal reported Wednesday, citing unnamed people familiar with the situation.The New York-based bank’s executives are expected in October to present plans to the board of directors to pare Citi’s retail branch network and concentrate mainly on the New York, Washington, D.C., Miami, Chicago, San Francisco and Los Angeles areas, the paper said.
Most of Citi’s branch locations are located internationally. Citi currently operates about 1,000 U.S. branches, much fewer than the 5,000-plus run by Bank of America Corp. and JP Morgan Chase & Co., which expanded its network with the takeover of Washington Mutual last year. While the moves would be designed to help the bank work “smaller-but-smarter,” the paper said some Citi executives are concerned that the U.S. government, which owns a 34 percent stake in Citi, could balk at branch closings.
Citi is looking to sell its 120 branches in Texas and is mulling whether it should continue to maintain a large footprint in cities like Boston and Philadelphia, the paper said. Citi holds few deposits in those locations compared with competitors.”
The WSJ, which originally broke the story, reports that the cuts come just a year after Citigroup was mulling acquisitions that would vastly expand its retail banking presence.
For U.S. taxpayers, however, the larger question is why taxpayer money should have gone to a bank that is now looking to severely scale back both its lending and retail presence. Citi’s response to the WSJ couched the issue in vague notions of improving customer service:
“We understand we have a great deal to do to improve the overall customer experience,” Citi spokesman Michael Hanretta said. “We’re on a very significant journey to make it simpler, more rewarding, and highly transparent to bank with us.”
The takeaway? Fewer loans for average Americans equals “a better customer experience.”
(Article Continues) – http://www.huffingtonpost.com/2009/09/24/citigroup-locations-to-be_n_298189.html