5 ms·

> The mistake this and other articles like it make is it attempts to aggregate this blame upward. Rewards accumulate upwards, so surely blame should too. > Wo

by adam-a 13y ago

> The mistake this and other articles like it make is it attempts to aggregate this blame upward. Rewards accumulate upwards, so surely blame should too. > Would their example have served to convince others to behave better? Certainly not. I think it would. If CEOs were going to jail then other CEOs would put more of their company's resources into making sure they are running stably and not taking on too much risk. I'm sure none of these people wanted to run their company into the ground, but the rewards outweigh the risks, so bad decisions were made that might not have been if those in charge had had a more cautious approach. I agree with you that with the current laws there is not a reasonable thing to prosecute these people for. Personally I would like to see laws that could cover these types of things, not just for banks and finance, but for any large organisation that causes human suffering.

gadders 13y ago
Does this mean we should look to see which politicians should go to jail for encouraging NINJA loans?
jfasi 13y ago
I don't buy the "rewards accumulate upwards, so surely blame should too" argument. This argument hinges on the idea that the executive is earning rewards that are vastly disproportionate to the risks he faces for making mistakes. Since the executive is compensated orders of magnitude more than any individual rank and file employee, it's easy to think that his reward is too large. However, on deeper examination you find that this isn't as clear as one might think it is. Doesn't every employee enjoy the benefits of the company's success? Individually their pay is small compared to the executive's, but taken together their collective reward dwarfs what the executive takes home. When taken in the context of the entire company, the pay of the executive seems more reasonable. As for risk, remember that however all-powerful the executive's role is portrayed to be in popular culture, he is ultimately a servant of the shareholders and the employees. He acts according to pressure from the owners of the company to transform an existing business into a more profitable business. Morality can and certainly does enter into it, but only in such a capacity where it doesn't interfere too severely with this mission. When viewed from this angle, it's clear that putting in place laws that would allow you to prosecute CEOs that execute this mission in good faith is foolish. It would be incompatible with our legal principles because it would assume that all leaders of faltering companies are criminals unless proven otherwise, simply by virtue of being at the helm during bad times. Worse, it would transform the role of the CEO from that of the responsibly careful and reasonably bold leader to a timid sheep who lives in fear of mob justice for impossible-to-foresee consequences of his innumerable, seemingly innocent, decisions.
- king_jester 13y ago
  > This argument hinges on the idea that the executive is earning rewards that are vastly disproportionate to the risks he faces for making mistakes. C-level execs of large banks (the kind of execs in question) DO early disproportionate amounts of money and face no real risks even when they fail miserably. C-level execs typically get golden parachutes and usually face no criminal charges even if their actions or direction lead to criminal behavior. > Doesn't every employee enjoy the benefits of the company's success? No, absolutely not. Is it better that someone be employed rather than have no job and go hungry? Yes. But you are wrong if you think the janitors that clean the offices and other low level employees share in the success of the company, these people are paid low, flat wages and are highly expendable even in successful times for a business. > Individually their pay is small compared to the executive's, but taken together their collective reward dwarfs what the executive takes home. The average worker does not share their income in some kind of collective way and does not have a way to collectively bargain for extra wages or benefits. C-level executives, on the other hand, have tremendous salaries compared to the average worker working under them and are rarely in danger of any penalty for bad or illegal decisions. > As for risk, remember that however all-powerful the executive's role is portrayed to be in popular culture, he is ultimately a servant of the shareholders and the employees. He acts according to pressure from the owners of the company to transform an existing business into a more profitable business. Morality can and certainly does enter into it, but only in such a capacity where it doesn't interfere too severely with this mission. If high level executives get a license to act against moral interests of people at large without the risk of punishment, we should expect sociopathic-like behavior from those person and they will do damage in some capacity or another. > When viewed from this angle, it's clear that putting in place laws that would allow you to prosecute CEOs that execute this mission in good faith is foolish. Nonsense. No person or business entity is entitled to profit without rules or regulation. We aren't Ferengi. > It would be incompatible with our legal principles because it would assume that all leaders of faltering companies are criminals unless proven otherwise, simply by virtue of being at the helm during bad times. Running a business poorly is not a crime. Running a business with the intent to lie, defraud, and otherwise cheat the law is. Expanding or strengthening laws to ban behavior that is destructive to society is not wrong but is moral and necessary. > Worse, it would transform the role of the CEO from that of the responsibly careful and reasonably bold leader to a timid sheep who lives in fear of mob justice for impossible-to-foresee consequences of his innumerable, seemingly innocent, decisions. If this were to happen, society would be a better place. Instead now we have not sheep but wolves that seek their own profit regardless of how many lives are destroyed.
stonemetal 13y ago
Rewards accumulate upwards, so surely blame should too. Should the CEO of papa john's personally pay every speeding ticket gotten by delivery drivers while out on delivery? Even though company policy clearly states drive within the laws. Should he have a compliance officer go on every delivery to make sure that all driving rules and regulations are followed? And perhaps a second so that we're sure the first isn't colluding with the driver, perhaps a third to break ties when the first two can't agree. At three we probably need a manager to go along to so we can make sure the others aren't slacking off. That's right we need a five man team to make sure a pizza gets delivered correctly and safely. The CEO of an organization has a large effect on everything, but isn't solely responsible for everything that happens. Blame should only rise as far as the decision to act irresponsibly did. As far as the liar's loans go blame should be on loan officers who didn't do due diligence and as far up the management chain as can be shown to have had knowledge of that fact.

by adam-a 13y ago

gadders 13y ago

Does this mean we should look to see which politicians should go to jail for encouraging NINJA loans?

jfasi 13y ago

I don't buy the "rewards accumulate upwards, so surely blame should too" argument. This argument hinges on the idea that the executive is earning rewards that are vastly disproportionate to the risks he faces for making mistakes. Since the executive is compensated orders of magnitude more than any individual rank and file employee, it's easy to think that his reward is too large. However, on deeper examination you find that this isn't as clear as one might think it is. Doesn't every employee enjoy the benefits of the company's success? Individually their pay is small compared to the executive's, but taken together their collective reward dwarfs what the executive takes home. When taken in the context of the entire company, the pay of the executive seems more reasonable. As for risk, remember that however all-powerful the executive's role is portrayed to be in popular culture, he is ultimately a servant of the shareholders and the employees. He acts according to pressure from the owners of the company to transform an existing business into a more profitable business. Morality can and certainly does enter into it, but only in such a capacity where it doesn't interfere too severely with this mission. When viewed from this angle, it's clear that putting in place laws that would allow you to prosecute CEOs that execute this mission in good faith is foolish. It would be incompatible with our legal principles because it would assume that all leaders of faltering companies are criminals unless proven otherwise, simply by virtue of being at the helm during bad times. Worse, it would transform the role of the CEO from that of the responsibly careful and reasonably bold leader to a timid sheep who lives in fear of mob justice for impossible-to-foresee consequences of his innumerable, seemingly innocent, decisions.

king_jester 13y ago
> This argument hinges on the idea that the executive is earning rewards that are vastly disproportionate to the risks he faces for making mistakes. C-level execs of large banks (the kind of execs in question) DO early disproportionate amounts of money and face no real risks even when they fail miserably. C-level execs typically get golden parachutes and usually face no criminal charges even if their actions or direction lead to criminal behavior. > Doesn't every employee enjoy the benefits of the company's success? No, absolutely not. Is it better that someone be employed rather than have no job and go hungry? Yes. But you are wrong if you think the janitors that clean the offices and other low level employees share in the success of the company, these people are paid low, flat wages and are highly expendable even in successful times for a business. > Individually their pay is small compared to the executive's, but taken together their collective reward dwarfs what the executive takes home. The average worker does not share their income in some kind of collective way and does not have a way to collectively bargain for extra wages or benefits. C-level executives, on the other hand, have tremendous salaries compared to the average worker working under them and are rarely in danger of any penalty for bad or illegal decisions. > As for risk, remember that however all-powerful the executive's role is portrayed to be in popular culture, he is ultimately a servant of the shareholders and the employees. He acts according to pressure from the owners of the company to transform an existing business into a more profitable business. Morality can and certainly does enter into it, but only in such a capacity where it doesn't interfere too severely with this mission. If high level executives get a license to act against moral interests of people at large without the risk of punishment, we should expect sociopathic-like behavior from those person and they will do damage in some capacity or another. > When viewed from this angle, it's clear that putting in place laws that would allow you to prosecute CEOs that execute this mission in good faith is foolish. Nonsense. No person or business entity is entitled to profit without rules or regulation. We aren't Ferengi. > It would be incompatible with our legal principles because it would assume that all leaders of faltering companies are criminals unless proven otherwise, simply by virtue of being at the helm during bad times. Running a business poorly is not a crime. Running a business with the intent to lie, defraud, and otherwise cheat the law is. Expanding or strengthening laws to ban behavior that is destructive to society is not wrong but is moral and necessary. > Worse, it would transform the role of the CEO from that of the responsibly careful and reasonably bold leader to a timid sheep who lives in fear of mob justice for impossible-to-foresee consequences of his innumerable, seemingly innocent, decisions. If this were to happen, society would be a better place. Instead now we have not sheep but wolves that seek their own profit regardless of how many lives are destroyed.

stonemetal 13y ago

Rewards accumulate upwards, so surely blame should too. Should the CEO of papa john's personally pay every speeding ticket gotten by delivery drivers while out on delivery? Even though company policy clearly states drive within the laws. Should he have a compliance officer go on every delivery to make sure that all driving rules and regulations are followed? And perhaps a second so that we're sure the first isn't colluding with the driver, perhaps a third to break ties when the first two can't agree. At three we probably need a manager to go along to so we can make sure the others aren't slacking off. That's right we need a five man team to make sure a pizza gets delivered correctly and safely. The CEO of an organization has a large effect on everything, but isn't solely responsible for everything that happens. Blame should only rise as far as the decision to act irresponsibly did. As far as the liar's loans go blame should be on loan officers who didn't do due diligence and as far up the management chain as can be shown to have had knowledge of that fact.