I notice that you managed to sidestep the questions put to you, Shadow Minister. I guess with a handle like yours, that's par for the course.

Never mind. At least you managed to introduce further confusion to your position.

Which of these statements of yours do you believe in more?

Or would it simply be the one favoured by the client who pays you the higher fees?

>>The reason CEOs are paid so well is that very few can do what they do, and is the same reason that Picasso paintings go for $30m.<<

>>Market conditions and other variables often have as much to do with it as CEO compentencies<<.

Both statements can of course be true. But only if you are willing to argue "one the one hand... but of course on the other..."

But I suppose that's what consultants excel at, isn't it?

You talk in generalities. I am being specific. There is nothing at all challenging, from a CEO's perspective, in managing an organization that does no R&D, no product design, no product development, no manufacturing, has no shareholders, no profit targets, and has a "sales" operation that consists of begging money from the general public, using guilt as a primary motivator.

Compared to a real business, it has no risk, no penalties for failure and a management expense pot that is fundamentally optional - you simply select a ratio that is acceptable to your image, and away you go.

Jealousy and spite have nothing to do with it. The job can be competently filled by a retired mortgage broker, who would perform perfectly satisfactorily, and take far less from the value chain in doing so.

mil-observer

Did you actually read my posts?

My jealousy reference was to the CEO of charities not of banks.

The companies you mentioned were not the originators of the toxic financial instruments, rather traders in the instruments.

An even worse case of poor corporate governance is NSW labor, whose bankrupting of the state in a time of record income whilst not actually spending anything on upgrading schools and infrastructure is overshadowed only by Robert Mugabe. With your political leanings this must be hard to swallow.

Your last post displayed more political buzz words than I have seen for a long time. This financial crisis must be the opportunity of a life time to trot them out. The benefit of 20/20 hindsight is a wonderful thing, a pity that foresight is required.

Hi Shadow. Presume all you like about my "political leanings", but your references to NSW Labor and Zimbabwe are both grist to my own mill too, though for different reasons.

On NSW Labor and its monetarist black holes, we can get plenty of gruesome detail from that Carr guy who gets half a mil each year from Macquarie Bank. As for Zimbabwe, that country is a good demonstration of what happens when the UK and Crown can't get over their own petulance about having their imperialist butts kicked by the natives. Blair cut the compensation deal for Zimbabwe's continued recognition of white farmers' land claims - contrary to processes during the peace deal - thus ensuring that Mugabe had to keep good his promises of national reclamation. The rest is just a recent installment in the history of imperialist embargoes and destabilization.

Also, your reference to charity CEOs - as distinct from their banking counterparts - is similarly misdirected. Ridiculously overblown, even counter-intuitive, salaries and bonuses for charity CEOs (like the pompous "CEO" abbreviation itself) prove for the charity sector microcosm the wider neo-lib hyper-corruption and injustice perhaps more obviously obscene in the banking sector.

Btw, if you check my posting history you'll see that I've been railing against those same enemies of humanity for a few years now. My actual "foresight" on this massive worldwide crash (actually just my critical mind's appreciation and discernment for information sources) earned me much ridicule, other abuse and smug dismissal from the neo-lib fanatics. Now they all seem to say that I'm a fraudulent post-facto "prophet of hindsight"!

Pericles,

I just missed your latest post, but you have unwittingly answered your own question. Yes both statements are almost always true. A good CEO might preside over a loss of millions instead of hundreds of millions in a bad market.

If the world was a simple unchanging one dimensional environment, a retired mortgage broker could manage a large charity organisation.

With respect to the simplicity of the job, a first year MBA student will tell you that the CEO will have to control:

-Shareholders have been replaced by stakeholders i.e. major contributors and governmental interests who expect the maximum results for minimum contribution and results are expected within very tight budgets.
-The product is aid to the needy, and product design incls developing efficient ways to do it in diverse circumstances with old and new technology.
-Manufacturing is replaced by distribution, (as it is for whole sale organisations such as Kmart etc), and a marketing branch that has to find the funds amongst huge competition from different charities.
-On top of this add huge political interference from every twit that thinks his moral view is absolutely the most correct, and you have a job in which your mortgage broker will crumble. The penalties for failure are the same as for any senior manager, dismissal and loss of reputation.

MO

Having read some of your posts, I would say that ranting against all things capitalist does not constitute foresight of the present crisis and that your claim is somewhat gratuitous.

My understanding of the land reform issues in Zimbabwe were that the UK put up hundreds of millions of pounds for land reform, but baulked at it being used to buy commercial farms to be given to Mugabe’s cronies. When they tried to implement an actual redistribution, they were prevented from doing so by Mugabe’s regime on the basis that the “colonialists” should not dictate how the regime should spend the aid. This indicates a political myopia that excludes all information not supporting one’s opinion, which you have my condolences.

I'm not sure how you work this one out, Shadow Minister...

>>you have unwittingly answered your own question. Yes both statements are almost always true. A good CEO might preside over a loss of millions instead of hundreds of millions in a bad market.<<

And this justifies six-figure salaries... how?

But let's pass on that for a moment.

>>Shareholders have been replaced by stakeholders i.e. major contributors and governmental interests who expect the maximum results for minimum contribution and results are expected within very tight budgets<<

Maximum this, minimum that. Good weasel words.

And those "tight budgets" are simply a percentage of beggings. Beggings down, management expenses down. Tough ask.

Incidentally do you see any evidence of these stakeholders taking any real interest in these lovely, generalized concepts?

Ever?

>>The product is aid to the needy, and product design incls developing efficient ways to do it in diverse circumstances with old and new technology<<

This is "product design"? I think you are simply quoting generic blah from the nearest Management for Dummies book.

>>Manufacturing is replaced by distribution, (as it is for whole sale organisations such as Kmart etc), and a marketing branch that has to find the funds amongst huge competition from different charities.<<

Yep, you have to work on distribution, I guess.

But what's this about "huge competition from different charities".

Is that wise? Is that sane? How much time, money and effort, do you recommend should be spent in the "my charity's better than yours" game?

As a CEO, how much of your hard-earned beggings is it legitimate to spend, on what are after all little more than alpha-male bragging rights?

>>The penalties for failure are the same as for any senior manager, dismissal and loss of reputation.<<

So far, you have failed to identify a single measurable that would indicate failure. Nor, incidentally, do the charity businesses themselves

Plenty of words. No specific measurables.

Are you sure you're not a consultant?

Shadow, I am not “against all things capitalist”, contrary to your presumption about my posts. I recognize useful functions of people and institutions wagering capital in many enterprises (I've done it myself too). What I oppose vehemently are two closely inter-connected practices: usury and imperialism, very relevant to this global catastrophe. In APRIL 2007 (as “mil_observer”), I railed against “an inefficient socio-economic system. Just ask people in real estate or banking to find out how such irrationality keeps pumping the big bubbles of debt”.

Neo-lib/econo-rat pundits keep bleating today about how “a recession may be possible”! Consider these following from my JUNE 2007 reading material (which earned me ridicule):

“Although...regulation cannot save the bankrupt system...and nothing but a ban of the hedge funds is appropriate to their criminal behavior”;

“Bear Stearns...attempts to renegotiate are not due to 'humanitarian instinct', but to the fact that Bear Stearns faces paying up to 100 times the value of the each defaulted mortgage, in lost derivatives bets to the hedge funds!”;

“Chinese Economists Warn of Potential for New Financial Crash...”;

“The BoE...warns that the collapse of one major equity deal could trigger a general economic crisis...the result of banks and hedge funds lowering standards in order to...make high-interest loans into the big leveraged buyouts...One [likely trigger] for this crunch 'could be the failure of a large leveraged loan deal...leaving the lead intermediaries...with unexpectedly large commitments', and causing the value of existing debt to fall suddenly across the entire high-yield, or 'junk' bond markets...clearly similar to 'subprime' and 'optional payment' mortgages and other exotic mortgages which are popping the housing bubble, 'the U.S. subprime mortgage market...a useful case study of how lax lending behavior and deteriorating fundamentals can test the structure of a market'”, and;

“We have a financial system which can not be saved. There's no way of functioning under the existing ...financial system of the world - can't do it! We have a crisis, where the system is threatened with coming down in various ways”.