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Post 20

Sunday, March 29, 2009 - 4:47pmSanction this postReply
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Mindy,

Darn, just when I was being RIGHT about absolutely everything, I messed up and made a one, tiny mistake. Yes, I used the word 'rider.' But not in a way that contradicts anything else I said! (Well, it does sort of contradict my saying that you should always do a better job of reading what I wrote - just change the 'always' to 'at times' :-)

I still did not mean that government should ever violate a contract. Government should say to the bailout candidates, "If you take this bailout, then you should not give any bonuses unless they are part of a valid contract made prior to accepting the bailout and the bailout money itself can not be used for those bailouts." That is what I was thinking when I wrote of a rider. But because I don't believe that government has the right to do bailouts at all, it is kind of a moot point for me.

Post 21

Sunday, March 29, 2009 - 5:11pmSanction this postReply
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Lol. A mistake I have never made, nor ever would, of course!!!

What do you make of the retroactive invalidation of legal contracts that Tibor contemplates?

Mindy


Post 22

Sunday, March 29, 2009 - 5:29pmSanction this postReply
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This may be my fare-well post, as I have just been informed by Teresa that Rowlands considers I have been waging a vendetta against Ed Thompson, and I am required henceforth to desist from saying the sort of things I have been saying.

Guess what my response is?

Mindy


Post 23

Sunday, March 29, 2009 - 5:41pmSanction this postReply
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In my view--and I have no clue how Objectivism per se proves or disproves something, only good arguments can do that--as a  rule contracts are indeed binding.  There are a few exceptions, namely, when they have been entered into fraudulently, under false pretense, without full disclosure of necessary information, etc.  In which case they become void.  If I were to marry someone while already married, the new "marriage" would be void.  I am very committed to contracts and to promises but these aren't foundational or categorical but conditional.

Post 24

Sunday, March 29, 2009 - 5:48pmSanction this postReply
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Mindy, I won't make any comments on what Tibor wrote - I know that his grasp of property rights and economic freedoms is impressive (he was chosen to write the article on property rights for the Internet Encyclopedia of Philosophy).

If he actually advocated overturning a legal, existing contract I would disagree with him, but I would want to hear what his reasons were - he has certainly always been on the side of capitalism based upon individual rights.

Edit: Tibor replied while I was typing - and I can see I was right in guessing what his position would be - Tibor, Mindy and I all agree that valid contracts should be binding :-)
(Edited by Steve Wolfer on 3/29, 5:52pm)


Post 25

Sunday, March 29, 2009 - 5:55pmSanction this postReply
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Tibor,

I didn't intimate that your position would be disproved per "Objectivist proof," but that it would be disproved per Objectivist principles. I was saying that I, personally, disagreed and that I would undertake to show that Objectivism contradicted your position.

Contracts, you say, aren't foundational or categorical, but conditional. Are there any political instruments, such as a constitution, that are foundational or categorical in that sense?

Mindy 


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Post 26

Sunday, March 29, 2009 - 6:05pmSanction this postReply
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A note to Teresa and Joe,

I can't see that one line in post #12 of this thread as constituting a vendetta. I also haven't seen anything that Mindy has written anywhere that is as harsh as posts that have been directed against me in the past, and against many, many others at times where tempers have flared and name-calling has ensued.

She has been very sharp of tongue in several of her posts towards Ed but even when I did not agree with her assessment, or with the intensity of her reply, I never thought she failed to maintain civil language. It is clear that she doesn't like Ed (and I don't know why) but I find nothing in her posts that are the least bit disruptive of our common purpose. Even when I disagree with Mindy, even when she attacks me over something, even when her words sting, I can't evade the knowledge that she adds a great deal to RoR.

I'll admit that if I were Ed I wouldn't feel that way, but I suspect that they will simply learn not to interact with each other and will in time post to the same threads almost as if the other weren't there.

I would be disappointed and somewhat bewildered if she were invited to leave.

Steve

Post 27

Sunday, March 29, 2009 - 7:50pmSanction this postReply
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Good question about constitutional principles--they are politically fundamental but they ought to rest on sound socio-ethical principles, natural laws/rights and so forth.  But once the constitution so founded is in place, its violation is prohibited,  Again, there can be some extraordinary situations--desert island, Donner Party--cases in which they might be disregarded.

Post 28

Monday, March 30, 2009 - 12:44amSanction this postReply
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Thanks, Howard, and yes, you are right.  I may have been too lenient with the envy people show toward athletes.  Still, I think people in business are targeted a good deal more with envy than people elsewhere.  This, I think, has to do with the widespread religious and other ideological (philosophically un-selfconscious) besmirching on earthly riches.
(Edited by Machan on 3/30, 8:13am)


Post 29

Monday, March 30, 2009 - 4:31amSanction this postReply
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I would say that you appear to be dead on with comparison of star athletes and businessmen. It appears to take quite a lot to even get a token conviction on an athlete, even for obvious crimes. On the other side of the coin, the gov't seems to be actively trying to invent crimes to apply to businessmen.
(Edited by Ryan Keith Roper on 3/30, 4:32am)


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Post 30

Monday, March 30, 2009 - 5:27amSanction this postReply
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Steve Wolfer wrote:
Government should say to the bailout candidates, "If you take this bailout, then you should not give any bonuses unless they are part of a valid contract made prior to accepting the bailout and the bailout money itself can not be used for those bailouts."
Obama is responsible, along with Sen. Dodd, for the provision in the stimulus bill that explicitly exempted the bonuses.


Post 31

Monday, March 30, 2009 - 8:42amSanction this postReply
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If you roll back the clock to before AIG started to go in the toilet, the real responsibility lies with the shareholders of AIG.  A large number of people held stock in AIG.  It was their responsibility as investors to keep track of what the company's executives and directors were up to.  Unfortunately, in today's society, investors are few and far between.  Most people with money in the stock market are merely speculators.  They put money into the stock market, expecting it to automatically make money.  They don't keep track of what the companies they own are up to.  In fact, a lot of people who invest through mutual funds have no idea which companies they own! 
Which brings me to another point; where were the mutual fund managers during all this?  Wasn't it their fiduciary duty to their shareholders to keep careful track of the goings-on at all of the companies their fund owned? 
As has been said before, if the Government had simply stayed out of the whole thing and let the free market operate, AIG (among others) would have been bankrupt, and so unable to pay any bonuses at all.  Healthier companies would have snapped up its assets for whatever the market decided they were worth.  And this would have served as a warning to other companies that Uncle Sam isn't going to reward them for bad business decisions.
Does anybody else get the idea that the size test for a company being "too big to fail" has less to do with net worth and more to do with campaign contrbutions?


Post 32

Monday, March 30, 2009 - 2:44pmSanction this postReply
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I'm pretty sure the whole reason for companies issuing bonuses in the first is a creation of government interference. I may be mistaken, but I recall hearing that the tax code doesn't punish executives earning bonuses as much as it punishes them for earning a salary. So naturally, the corporate culture of compensating executives turned primarily to bonuses, not so much salary.

Although I'm not clear what Tibor meant when he said this:

Where trouble arises is when a company is receiving public funds in order
to remain in operation and a sizable portion of these funds is used to pay
bonuses agreed to prior to the bailout. What has happened is that the
company's authority to pay the bonuses has diminished since the original
contract was drawn up independently of the public intervention and
subsidy. That, of course, could also have been taken care of by the terms
of the contract--it could have specified that regardless of whether the
company receives bailout funds, the compensation to the executive will
remain the same.


I don't see how such a specification was ever warranted or in what way this company's authority to pay the bonuses has "diminished". First off I don't understand what that means precisely, what do you mean by their authority to pay contracts has "diminished"? If I declare personal bankruptcy, and the government issues food stamps to me, does my authority to pay my credit card bills diminish? I don't see how, I still owe the money. The immorality of receiving welfare is a separate issue from the morality of repaying debts. I don't see that as the same issue morally.

If the company went bankrupt, all their creditors would line up in a bankruptcy court demanding they be compensated for their pre-existing contracts with the company, the same goes for anyone else owed money by the company, including employees. The fact that a third party invested in the company, in this case the government (we all agree they have no right to do so as they have no authority to invest) and saved the company from bankruptcy doesn't change at all the liabilities of the company. A third party cannot unilaterally change a pre-existing contract, ever, unless there was a breach of contract and a judgment is made in court. The actions that a company takes after these contracts are issued should not at all effect them in any way, morally, legally or any other way. The government of course had no right to bail them out, but they doesn't mean they get to make more moral wrongs by voiding legally binding contracts.



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Post 33

Monday, March 30, 2009 - 7:46pmSanction this postReply
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Actually, once one receives support from confiscated funds--taxes--one's independence has diminished (to the extent one relies on such support) because these funds make that possible. I may be receiving foods stamps but if these make possible my paying my credit cards, which otherwise I could not pay because I need to purchase food, I become dependent on the government that issues those stamps.  And remember these funds are illegitimate, unjustly obtained.  Indeed, I would argue that one's entire budget becomes tainted, infected--it is dirty now. 

Post 34

Tuesday, March 31, 2009 - 5:25amSanction this postReply
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I'm pretty sure the whole reason for companies issuing bonuses in the first is a creation of government interference.
Bonuses have long been a big part of pay on "Wall Street." Bonuses are "pay for performance" akin to commissions paid to salesmen.
I may be mistaken, but I recall hearing that the tax code doesn't punish executives earning bonuses as much as it punishes them for earning a salary.
That would be true if the tax code were changed as some have recently proposed. Otherwise, bonuses are part of "wages, salaries, tips, etc." reported on line 7 of Form 1040.


Post 35

Tuesday, March 31, 2009 - 5:40amSanction this postReply
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I have a little aside. Given the retroactive rewriting of agreements, "understood" but unspoken clauses, overt strongarming, and implied threats, does the gov't differ in any way from mafia lonesharks in this case? Aside from the veneer of legitimacy?

Post 36

Tuesday, March 31, 2009 - 6:53pmSanction this postReply
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Merlin I realize bonuses have had their place in Wall Street for a long time for the purposes of incentivizing executives to make their companies more profitable. What I was trying to get at was I thought there were changes under the law by Clinton that incentivized corporations to gravitate towards giving bonuses to executives more so than a salary. Here's an article about the law I was thinking of:

http://economix.blogs.nytimes.com/tag/president-bill-clinton/

President Clinton followed through on campaign proposals to limit executive compensation, signing into law the Revenue Reconciliation Act of 1993. Compensation rules within the act became codified in IRC 162(m), which governs the salary-based compensation of the top five executives within publicly traded companies. The rule influences compensation by limiting the deductibility of salary expense to $1 million for each of these executives. Deductibility above that ceiling was permissible as long as the excess came in the form of performance-based compensation, whether cash bonuses or equity-based compensation like options (various technical rules needed to be followed as well).


So you can see, the government is responsible for the current culture of large executive bonuses as a guarantee rather than or not as much as tied to performance. I was mistaken in thinking the tax code punished executives for taking more of a salary than a bonus, instead the tax code punishes the corporation for giving a salary instead of a bonus.

While bonuses always had their place, the extent of how much they are used today is precisely due to government interference.

Post 37

Tuesday, March 31, 2009 - 7:03pmSanction this postReply
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Tibor:

Actually, once one receives support from confiscated funds--taxes--one's independence has diminished (to the extent one relies on such support) because these funds make that possible. I may be receiving foods stamps but if these make possible my paying my credit cards, which otherwise I could not pay because I need to purchase food, I become dependent on the government that issues those stamps. And remember these funds are illegitimate, unjustly obtained. Indeed, I would argue that one's entire budget becomes tainted, infected--it is dirty now.


I'm not a big fan of metaphors so I like to shy away from characterizing something as tainted or infected. I think the action of loaning this company taxpayer money is an illegitimate act. But in no way would I say their liabilities are illegitimate. Their pre-existing contracts with their employees are not any less moral because they received capital in an unsavory manner. It's not the employees fault. They had an agreement to be paid for their services. To suggest there is some moral breach now in this agreement I think to me suggests one ought to breach the contract, because suggesting there is some kind of illegitimacy in these contracts suggests one ought to break the agreement on the grounds they are now immoral, or as you characterized it as tainted, or diminished.
(Edited by John Armaos on 3/31, 7:08pm)


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Post 38

Wednesday, April 1, 2009 - 7:37pmSanction this postReply
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Today my hard drive gave up at work.  On it were files going back to 1990, many of them involving dozens of hours of work, totalling close to half a million files all told, a large portion of them created by me personally as part of my job of publications producer for most of that time, as well as web designer of the very large corporate web site for over ten years.

I spent the entire day desperately trying to copy the most critical files to one of the intranet drives, as one in a hundred, then one in twenty, then one in five files glitched the system, forcing a cold reboot, over and over and over again, watching almost twenty years of work crash and burn.  I can project that I will lose 80% at best.

I know my job.  I told management repeatedly for months that the hard drive was failing, and that I did not have any verification that the backup software was in fact working, nor any other place to backup the drive in a cost-effective way.  I was told not to worry about it - in a hostile tone.  The automatic backup software, like all the rest of my software was installed by someone else entirely, the details kept secret from me, stemming from management policies best exemplified by Jim Taggart.  My expressed concern - like that of Eddie Willers - generated the "Don't Bother Me" response.  If I knew more then I could express more, so best to keep me in the dark.

Because the whole management is at a trade show, the guy who IS authorized to do something was gone with them and I had verbal permission to try to deal with the situation.  Then I discovered that the backup system he installed had not been working for a month and its files were also corrupted.  The most ridiculous part of it may be that they had the same experience only six months ago when their main intranet drive, with all the financial data and records on it, died, and they then realized that no one had backed it up, even though the backup drive on the server was connected and running.  No one had installed the software.  Everyone and no one was responsible.

Now they will lose at least a million dollars as a consequence.  But they will still have their power, and their executive compensation - maybe slightly diminished at worst.  So the essentials will have been preserved.  (I may be fired, as my added value is now seriously diminished, due to the loss of the files that constituted the backbone of product information and marketing, both for the U.S. company and its Taiwan branch.  That way it will be easier to forget who is actually responsible, as well.)

There are Hank Reardon's and Dagny Taggart's out there.  They deserve all those bonuses and whatever else their value added productivity provides them.  The crash and burn of our overall economy, however, is a clear signal that they are not generally in charge, which should not be news to objectivists.  The proper issue is how we got to this point, and what to do about it so it doesn't get worse, as the crooks hang together to game the system all the way down.

(Edited by Phil Osborn on 4/01, 7:41pm)


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