Big John

I see that Big John McCain reads this blog. Here are some excerpts from his speech on Tuesday, copied from the online Financial Times.

"John McCain on Tuesday promised a clampdown on corporate malpractice if elected president and vowed to give shareholders a veto over executive pay.

"The Republican presidential candidate said government had become beholden to big business and too forgiving of corporate abuses.

“ 'For too long, government has been the voice of big business,' he told a small-business conference in Washington. 'Even when very large businesses violate their trust, they seem to be held to a different standard – getting away with conduct that would leave any small-business owner broke.'

"Mr. McCain said that Americans were right to be offended by 'extravagant' salaries and severance deals for financial sector executives whose decisions had helped cause the crisis in the housing and credit markets.

" 'Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct, while the offenders themselves are packed off with another $40m or $50m for the road,' he said. 'If I am elected president, I intend to see that wrongdoing of this kind is called to account by federal prosecutors. And under my reforms, all aspects of a CEO’s pay, including any severance arrangements, must be approved by shareholders.' "

I like this. The Populist Libertarian movement is growing.

More ...

Yesterday's Wall Street Journal had an article about the lavish pay and benefits bestowed on CEOs postumately. This is nuts ... let them buy life insurance with their already high compensation. And corporations for years have bought life insurance on employees, but they keep the death benefits. So this disparity in treatment of the powerful vs. the average Joe is despicable. [Thanks to a silent reader for reminding me of this article.]

And the Financial Times from Monday had a story about "Europe loses patience with its wealthy elite." Here's one of the facts cited: "... the collective pay of CAC-40 bosses leapt by 58 per cent in 2007, inflated by the exercise of stock options." Governments, shareholders and investors in Europe are contemplating how to curb this pay.

The problem is how to do it. Socialists like Obama would want to tax the pay, but all that does is give the governmental ruling classes more money to spend on bribes and payoffs and jobs for their supporters. As a friend wrote to me privately, the preference is to prevent the ruling classes from getting this excessive money in the first place. But how can rules be structured in a free society with private property to prevent them gorging themselves at the trough like hogs at feeding time ?

Certainly precise disclosure and shareholder votes is one possible solution. Thinking ...

Words of the Day

"Irrupt" - verb, intransitive [$10] followed by "into"; "Irruption" - noun [$10]
Irrupt means enter forcibly or suddenly.
Irruption means 1. the act of irrupting, a sudden intrusion; 2. a sudden temporary increase in the local population of a migrant bird or animal species.
Sentence: Will Populist Libertarianism irrupt into the public's political discourse of the US and Europe in the 21st century ? This blog will do its best to propagate these ideas more broadly.