{"id":4460,"date":"2009-03-26T08:04:38","date_gmt":"2009-03-26T13:04:38","guid":{"rendered":"http:\/\/www.shotinthedark.info\/wp\/?p=4460"},"modified":"2009-03-26T08:05:18","modified_gmt":"2009-03-26T13:05:18","slug":"unintended-consequences-of-witchhunts","status":"publish","type":"post","link":"http:\/\/www.shotinthedark.info\/wp\/?p=4460","title":{"rendered":"Unintended Consequences of Witchhunts"},"content":{"rendered":"

In the previous two postings, I wrote about the dangers of facile populism <\/a>and the “Evita<\/a>” phenomenon (people valuing charisma over results).<\/p>\n

Last week, of course, the most immediate and least-rhetorical danger of Obama’s policies – scapegoating, simplistic appeals to mob passion via a one-party Congress – will have to our society; immense economic dislocation:<\/a><\/p>\n

The dangerous consequences of slapping punitive taxes on Wall Street bonuses are becoming clearer in the ashes of Washington’s AIG bonfire.President Obama and cooler Senate heads must apply reason amid hysteria to avoid damaging the economies of New York and America.<\/p>\n

The tax plan approved by the House as revenge against a handful of obscenely greedy AIG executives would slam tens of thousands in the financial industry, many of them New Yorkers, who have nothing to do with AIG or any other wrongdoing.<\/p>\n

And that would be just start of the collateral damage.<\/p>\n

The levies are so draconian that major banks that took bailout money are threatening to give it back – defeating the purpose of jump-starting the economy with an influx of cash.<\/p>\n

Businesses with so-called TARP money in their accounts would also be put at a great competitive disadvantage to firms that have none. Those include foreign banks that will poach top Americans with higher pay.<\/p><\/blockquote>\n

One the great dangers of the current wave of populist scapegoating is the idea that CEOs don’t deserve all the money that many of them get; many float the fiction that Japanese CEOs get a vastly smaller multiple of workers’ salaries than they do in the US (it’s partly true, partly derived due to different means of measuring compensation,and partly due to the sampling on boths sides of the Pacific).\u00a0 Many CEOs fail, of course – the chief executives of AIG, Fred, Fannie, Bear Stearns, Citibank and many others might deserve some scrutiny.\u00a0 But the idea that the Chief Executive Officer of a publicly-held corporation is a simple job requiring no more talent than any other employee has is lunacy; running a company in a competitive market is like Alec Baldwin’s scene in Glengarry Glen Ross<\/em><\/a>; “‘re adding a little something to this month’s sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? [Holds up prize<\/em>] Second prize is a set of steak knives. Third prize is you’re fired.”\u00a0 And not just you, but dozens, hundreds, thousands of others.<\/p>\n

I used to think people couldn’t appreciate good CEOs until they saw a bad CEO.\u00a0 Now, I’m starting to think most of the opinionmakers (to say nothing of the mob) are either so insulated from the world of business, or just ignorant of it, that they are impossible to teach.<\/p>\n

As the financial capital of the world, New York would take the hardest hit. The city and state stand to lose millions in needed tax revenues.<\/p>\n

The bill passed by the House of Representatives would essentially confiscate bonuses paid out by firms that have accepted $5 billion or more in bailout funds – a category that includes major employers such as Citigroup, JPMorganChase, Morgan Stanley and Goldman Sachs.<\/p><\/blockquote>\n

Let’s not forget – bonuses aren’t just for execs: lots of people get ’em.\u00a0 They’re one of the key motivators for many people far from Mahogany Row.\u00a0 The phrase “…we’ve paid 15% bonuses the last four years” has turned many a job interview into a hot pursuit:<\/p>\n

Last year in New York, 168,000 workers collected bonuses – ranging from top execs to receptionists. Many would see their incomes evaporate, barring a wholesale change in the way banks pay their people.<\/p><\/blockquote>\n

Also caught in the whirlwind is General Motors. Does it makes sense, as blogger Nate Silver asked, to take the bonus of an engineer who dreams up an energy-saving car? No. Meanwhile, Merrill Lynch bonuses are exempt because they were paid before Jan. 1.<\/p><\/blockquote>\n

No matter.\u00a0 The mob must be appeased.\u00a0 The mob, in this case, is the “best and brightest” that we send to DC:<\/p>\n

It’s insane that New York officials, including Rep. Charles Rangel and Sen. Chuck Schumer, have joined the mob. A better example was set by Staten Island Rep. Michael McMahon, one of only six Democrats who had the courage to vote no in the House.<\/p><\/blockquote>\n

Populist outrage is the opposite of the “nuance”.<\/p>\n

So what major industry are you <\/em>willing to do without to satiate the mob?<\/p>\n","protected":false},"excerpt":{"rendered":"

In the previous two postings, I wrote about the dangers of facile populism and the “Evita” phenomenon (people valuing charisma over results). Last week, of course, the most immediate and least-rhetorical danger of Obama’s policies – scapegoating, simplistic appeals to mob passion via a one-party Congress – will have to our society; immense economic dislocation: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,51],"tags":[],"class_list":["post-4460","post","type-post","status-publish","format-standard","hentry","category-democrats","category-liberal-tyranny"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/4460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4460"}],"version-history":[{"count":0,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/4460\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4460"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}