# How can someone survive on a mere $500,000 a year?



## jackmccullough (May 10, 2006)

PRIVATE school: $32,000 a year per student.

Mortgage: $96,000 a year.

Co-op maintenance fee: $96,000 a year.

Nanny: $45,000 a year.

We are already at $269,000, and we haven't even gotten to taxes yet.

https://www.nytimes.com/2009/02/08/fashion/08halfmill.html?_r=2&em


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## Phinn (Apr 18, 2006)

Who are you to dictate another man's income? 

And before you say that you are one of the people paying for the so-called "bailout," and therefore have a say in how it is spent, realize that is a perfect reason why the so-called "bailout" should never have occurred. The State uses stolen money to buy the power to dictate the economic lives of others. And you call that "moral." It's disgusting. 

"When theft becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frédéric Bastiat


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## agnash (Jul 24, 2006)

I don't believe the $500 k limit goes far enough. Any bank taking the federal bailout money should be restricted to paying the CEO the Federally mandated minimum wage. The same rule should apply to members of the House and the Senate. :icon_smile_big:


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## Acct2000 (Sep 24, 2005)

You aren't even thinking about suggesting that the "market" that establishes these ridiculous salaries is not totally rigged and corrupt, are you"??


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## TMMKC (Aug 2, 2007)

While putting caps on the salaries of the executives whose companies will benefit from the largesse may have a potent populist appeal to it, my greatest fear is that we're heading down a slippery slope and unduly (and forever) increasing the Federal Goverment's meddling in private affairs. The spectre is quite scary if you think about it. Keynes must be doing backflips of joy in his grave about right now.

Though I am no fan of the bailout, this is why I feel any capital infusion by the government (err...Chinese and Germans) should ONLY go to buying up so-called "toxic" assets. Buy up the bad paper and let the market correct itself, I say. Too bad no one in DC has had the cajones to ask "What if we do nothing?"


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## Relayer (Nov 9, 2005)

Give us a thorough look at your income and expenses, jack.

I bet we can whittle down what you "need", also.

Is the government (Obama) going to take over the marketing and other aspects of these companies.

Then again, if the government (Obama) knows best, let them take over all companies and pay us all what we "need".


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## agnash (Jul 24, 2006)

TMMKC said:


> While putting caps on the salaries of the executives whose companies will benefit from the largesse may have a potent populist appeal to it, my greatest fear is that we're heading down a slippery slope and unduly (and forever) increasing the Federal Goverment's meddling in private affairs. The spectre is quite scary if you think about it. Keynes must be doing backflips of joy in his grave about right now.
> 
> Though I am no fan of the bailout, this is why I feel any capital infusion by the government (err...Chinese and Germans) should ONLY go to buying up so-called "toxic" assets. Buy up the bad paper and let the market correct itself, I say. Too bad no one in DC has had the cajones to ask "What if we do nothing?"


I too like the idea of letting the market correct itself. Let the institutions that did stupid things fail, let the banks that focused on actual banking thrive, and, voila, no more bailouts are necessary.


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## brokencycle (Jan 11, 2008)

If you put a cap on executive salaries of banks, won't those executives just go elsewhere? I mean, a good executive is worth a lot of money, because the company makes money under him. A bad executive is worth money to get rid of, because you don't want him to stay and to continue to lose money; therefore, it makes sense to buy out his contract.


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## agnash (Jul 24, 2006)

brokencycle said:


> If you put a cap on executive salaries of banks, won't those executives just go elsewhere? I mean, a good executive is worth a lot of money, because the company makes money under him. A bad executive is worth money to get rid of, because you don't want him to stay and to continue to lose money; therefore, it makes sense to buy out his contract.


True, but the banks that are taking the bailout money should be by definition banks that lost or are losing money, and therefore their CEOs are bad executives. If we (taxpayers) have to bail them out, then we should put such extreme salary restrictions on those bad executives that they will want to leave. The restrictions should be especially harsh, because as you point out, who would want them? Once they are gone, and the government runs these banks into the ground, then other banks with better executives will be able to buy the carcasses.

Please do not imply that I am in any way in favor of bailing these corporations out, except in cases where the Federal government forced them to do silly things, because the corporations shouldn't be punished for the fact that Republican and Democratic voters like to send mornons to D.C.


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## Quay (Mar 29, 2008)

Apropos of this forum, seems the fact checkers didn't follow this one through:

_"...Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can't look like a slob."

_But since so many _do_ look like slobs perhaps they could just go all the way and skip the BB suit purchases and get into the warm-up suits and sneakers available at many a discount store. Would definitely save them some money. :icon_smile:


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## TMMKC (Aug 2, 2007)

Quay said:


> Apropos of this forum, seems the fact checkers didn't follow this one through:
> 
> _"...Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can't look like a slob."_
> 
> But since so many _do_ look like slobs perhaps they could just go all the way and skip the BB suit purchases and get into the warm-up suits and sneakers available at many a discount store. Would definitely save them some money. :icon_smile:


...or they could supplement their reduced incomes by selling those suits on AAAC!:icon_smile_big:


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## Quay (Mar 29, 2008)

TMMKC said:


> ...or they could supplement their reduced incomes by selling those suits on AAAC!:icon_smile_big:


:idea: Hey!! Smart suggestion! There could be vast, innumerable BB suits with little or no wear sitting idle on the upper east side. A huge AAAC "Banker's Distress Sale" could find many a caring home for those clothes.

Perhaps AAAC members should form a volunteer brigade to go help. :icon_smile_big:


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## Cruiser (Jul 21, 2006)

Without commenting on whether top executives are worth what they are paid, I couldn't help but notice how the article was slanted in order to try and influence one's opinion. 

For example, with regard to how a $500,000 income is spent in NYC, I couldn't help but notice that nothing was mentioned about the spouse's income, and shouldn't the spouse's income be added to that $500,000 before we start deducting expenses? 

I can only assume that the spouse is working full time otherwise why $45,000 for a nanny? Does a babysitter really cost that much in NYC? After all, aren't the kids in school at that expensive private school for much of the day. But even so, if the spouse isn't earning at least as much as the cost of the nanny, then something is wrong with this executive's business model for his/her home. :icon_smile:

As a career employee of the U. S. Government, I can assure you that this matching of pay vs. the local cost of living is something that all government employees deal with all the time. For example, a GS-13 in Washington DC doesn't even begin to live the lifestyle of a GS-13 in Jackson MS or Nashville TN. If you are a government employee and you want to live and work in the DC area, you just accept that you will have a standard of living that is beneath what many others have who live elsewhere. Maybe business execs who want to work in NYC need to do the same thing and move to a different neighborhood to make that $500,000 go a little further. 

Cruiser


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## PedanticTurkey (Jan 26, 2008)

I'm looking forward to federal caps on salaries for professional sports players. And I agree that Jack could live on about 1/3 of his present income. Let's have it.


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## ksinc (May 30, 2005)

The part I don't believe is that a $ 96,000 mortgage has an additional co-op maintenance fee of equal amount. I'm not saying it's not true, I'm just saying I can't believe it. It highlights that the local economy up there has larger fundamental sustainability issues IMHO.


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## 16412 (Apr 1, 2005)

TMMKC said:


> While putting caps on the salaries of the executives whose companies will benefit from the largesse may have a potent populist appeal to it, my greatest fear is that we're heading down a slippery slope and unduly (and forever) increasing the Federal Goverment's meddling in private affairs. The spectre is quite scary if you think about it.


When I buy something I expect to get my moneys worth. The tax payers are buying a bailout. The tax payers are not paying for some rich person to add more to his wealth from the taxes. So, Yes! There should be caps on how much those at the top get if they take from the tax payers. Confuseing tax payers money with executive pay is your error. The rich never need handouts. And so many of these fools, big headed fools, drug us into this miss anyway, so they should not be rewarded. Keynes theroy has nothing to do with stealing tax payers money in this bailout.

You must be really sick if all you can think of is the rich getting richer at the tax payers expense while honest people are out of work and others losing their jobs and homes. Do you know what the word honesty means?


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## Howard (Dec 7, 2004)

Well, living on $500,000 a year would lead to $9,615 a month plus you have the expenses and such,things you have to buy and things you have to pay off like bills and stuff,also you need some "fun" money as well for yourself.


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## KenR (Jun 22, 2005)

Jack,

If I had been making a million or so and lived in NYC, my expenses would be high also. Nice apartment, clothes, lifestyle, etc. Who wouldn't be living it up to an extent? Cut that amount by half or two thirds, and anybody would say ouch.


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## TMMKC (Aug 2, 2007)

PedanticTurkey said:


> I'm looking forward to federal caps on salaries for professional sports players.


Not if Donald Fehr has anything to say about it!:icon_smile_big:


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## Stringfellow (Jun 19, 2008)

Inventory - a complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc., made each year by a business concern.

Where do banks get their inventory from? The U.S. Government - it's the only place that can issue new U.S. Currency. When it comes to currency, the U.S. Government is a monopolist - they are the only manufacturer of U.S. Currency. When you can only buy product from a monopolist they dictate the terms of the deal. If banks don't like this they should stop being banks or relocate to another country who will supply better terms for currency. 

Deal with it.


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## pt4u67 (Apr 27, 2006)

jackmccullough said:


> PRIVATE school: $32,000 a year per student.
> 
> Mortgage: $96,000 a year.
> 
> ...


Who else should have their salaries capped by the federal government?

Jack, 
Give up your career, the state needs you to turn widgets at factory number 8. Time and location will be announced shortly. You ask for a few minutes to pack your underwear.


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## ksinc (May 30, 2005)

Stringfellow said:


> Inventory - a complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc., made each year by a business concern.
> 
> Where do banks get their inventory from? The U.S. Government - it's the only place that can issue new U.S. Currency. When it comes to currency, the U.S. Government is a monopolist - they are the only manufacturer of U.S. Currency. When you can only buy product from a monopolist they dictate the terms of the deal. If banks don't like this they should stop being banks or relocate to another country who will supply better terms for currency.
> 
> Deal with it.


Yes, the banks were "nationalized" over 140 years ago.


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## SlowE30 (Mar 18, 2008)

Yes, dictating how much money someone can make is sickening.
Yes, in this case, it is necessary because the taxpayers are footing the bill and because the government wants to save face.

This is an example of why the government should stay out of the private sector. As soon as the government is "invested" in paying for something, it becomes responsible for keeping the costs down, even if that involves infringing upon freedoms. Let's extend this case to other areas: Oreos will become illegal under socialized medicine, and you have to report to weigh-in stations every six months or get penalized, etc.


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## pt4u67 (Apr 27, 2006)

Stringfellow said:


> Inventory - a complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc., made each year by a business concern.
> 
> Where do banks get their inventory from? The U.S. Government - it's the only place that can issue new U.S. Currency. When it comes to currency, the U.S. Government is a monopolist - they are the only manufacturer of U.S. Currency. When you can only buy product from a monopolist they dictate the terms of the deal. If banks don't like this they should stop being banks or relocate to another country who will supply better terms for currency.
> 
> Deal with it.


???:teacha:

Our currency is what is known as Fiat Money. The Federal Reserve issues notes and the U.S. Government, by fiat, authorizes and recognizes that money as a medium of exchange. It is symbolic as the promise of the government. It is the Federal Reserve, and not the federal government, that controls the supply of money. The treasury prints it.


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## jackmccullough (May 10, 2006)

*A few points*

1. I didn't actually comment on the expense levels in the article. My own opinion is that some of them seem ridiculous, and the article seems a bit slanted that way. On the other hand, I suspect that my modest three-bedroom house and 1.7 acre probably include more area than the modest three-bedroom apartment, and you know for sure that my purchase price was in the ballpark of 10% of what the hypothetical New York family spent.

2. I'm generally not interested in dictating what people are paid, but I do think there is a question of the public interest when they're paid with public money.

3. I don't consider taxes "theft", and I don't think most of us do, so it's pretty hard to have a rational conversation with someone who does.

4. Suggest the system is rigged? Who, me?


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## Kosh Naranek (Apr 24, 2008)

jackmccullough said:


> PRIVATE school: $32,000 a year per student. GED, Free
> 
> Mortgage: $96,000 a year. Stolen Safeway shopping cart, Free
> 
> ...


12345


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## oktagon (Mar 9, 2005)

jackmccullough said:


> PRIVATE school: $32,000 a year per student.
> 
> Mortgage: $96,000 a year.
> 
> ...


Perhaps you bought a house you can't afford.

Don't buy 2M house unless you can pay for it in full up front. 
Before I could afford 2M house I did not buy one. 
Leave according to your means. 1/2M a year is plenty to leave well and not complain.


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## Kav (Jun 19, 2005)

Dictate income indeed, the umbrage of some people. People like arthur blank of Home Despot. After building his 1000 store empire on the backs of employees who never had enough staffing, Good old bernie and arthur first reduced pay raises to once a year at 3% ( if merited, and people suddenly got bad reviews) from twice yearly @ 7%, the stock purchase plan vanished, the longevity bonus @ 1,5,10 years was dropped and the company contribution to hte unhealthy plan was reduced. 
Then came the purge through manipulated layoffs, firing with cause where there was none, and the lies of promotion that went to new people from outside.
Meanwhile, old art married his wife half his age, met at a EXPO store after making dating among employees grounds for dismissal and distributing fliers to employees with prewriten letters to be sent to government representatives on legislation affecting his stores. after firing a bunch more people for participating openly in a political assembly.
Good old art got his football team, Micahel Vick got paid all those worker's stolen pay so he could fight doggies and Atlanta got an aquarium.
Today HD is just a cancerous version of hte stores it claimed to replace with better service and prices.
Ah, the umbrage.


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## TMMKC (Aug 2, 2007)

WA said:


> Do you know what the word honesty means?


Yes I do.


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## rgrossicone (Jan 27, 2008)

I don't know...many of us in the middle class are having to make some serious cutbacks in the way we spend, because of private sector cutbacks that hurt what we earned.

It would be ridiculous to expect those who made those cutbacks to experience the same belt tightening while getting bailed out by the government (ie, the middle class who pay most of the taxes in this country).


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## oktagon (Mar 9, 2005)

rgrossicone said:


> the middle class who pay most of the taxes in this country.


Well, this depends on who you consider middle class vs. lower upper class. 90% of the taxes are paid by 5% top earners.


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## Miket61 (Mar 1, 2008)

oktagon said:


> Perhaps you bought a house you can't afford.
> 
> Don't buy 2M house unless you can pay for it in full up front.
> Before I could afford 2M house I did not buy one.
> Leave according to your means. 1/2M a year is plenty to leave well and not complain.


You must not live in New York.

Here in Atlanta, $2 million could buy a very large house, even in one of the older, more established neighborhoods inside the city. In New York, $2 million could buy a nice two-bedroom with den in a doorman building. And yes, the association fees are that high.

The NYT article puts a reasonable figure for an executive living in New York City at $1.6 million. Which is still a significant reduction.

What bothers me is the hypocrisy about government spending. When Wells Fargo cancelled their Las Vegas meeting, there were hotels, restaurants, and shops that lost business as a result. Why is the government claiming that they want to creat jobs while deliberately stifling the hospitality industry?


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## ksinc (May 30, 2005)

Miket61 said:


> Why is the government claiming that they want to creat jobs while deliberately stifling the hospitality industry?


Because President Obama is disguising his social agenda as economic populism and most people in the media believe only "illegals" work hospitality jobs and so they don't care and don't report the negative trickle down effects or as Thomas Sowell would call it "2nd stage." That's also why they have to keep the 34% "super majority" riled up about corporate jets and the like.


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## Kav (Jun 19, 2005)

If I see the great myth of 'middle class' one more time, I will puke.
If your livelyhood depends on a paycheck, you are WORKING CLASS.
There are some pretty affluent folks who fall into that category.
I do not begrudge anyone making a pile of money.
Most people want to make a pile of money. I do too.
But I do hold a grudge who do it by the detriment of others.
I am not in Upton Sinclair, Jack London mode.
I am just PO'ed, and scared.
And fear turns to anger, and some of these greedheads like Madoff,Keating and Hurwitz have addresses.


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## ksinc (May 30, 2005)

Kav said:


> If I see the great myth of 'middle class' one more time, I will puke.
> If your livelyhood depends on a paycheck, you are WORKING CLASS.
> There are some pretty affluent folks who fall into that category.
> I do not begrudge anyone making a pile of money.
> ...


I doubt any amount of social engineering will replace the secret handshake of those willing to profit on the backs of the 'working poor.' It's a real shame too. One of the reasons I started my own business was because the next rung on the corporate f&a ladder was behind the two-way mirror and I just can't do it. I don't make as much money as I could, but I am much happier. I still sometimes envy the bonus pools where these guys make many times their salary in bonus. I paid myself my largest bonus in 15 years last year - two month's pay. Mostly, I was preparing defence for the recession.

I frequently get offers to go back in, but it was a conscious decision I made at my GrandFather's funeral. He had a business for many years and just about everyone in his town showed up at his wake. He didn't die rich in monetary terms, but my GrandMother still lives off the interest his savings earns and I met at least 500 people that owed him money, a huge favor, or told of how he saved them from ruin in some way; and none that he owed a single thing. I had worked with him during the summers in my youth, but I was oblivious at the time to all the good things he did on a daily basis for his customers. Taking the long road to the Ferrari and beach home is more fun anyway. And most of the f&a guys are giving theirs back now too! I've been looking at the used market! There are some great deals right now!


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## msphotog (Jul 5, 2006)

My dad always told me that htere are 2080 working hours in a year, counting paid holidays. If I am making $500,000. a year, that works out to $240.34 per hour, or $4.00 and a little per minute. If I spend 5 minutes in the washroom, I just made $20. 
The CEO of Ford makes 37 million a year, and that works out to $17,465. and change per hour. He also lives in Seattle, and the company flies him home on the weekends in the $137m GulfStream. That might be considered somewhat excessive by most people who earn the average +- $47,000. per year

Just a thought...
Mark S.


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## ksinc (May 30, 2005)

msphotog said:


> My dad always told me that htere are 2080 working hours in a year, counting paid holidays. If I am making $500,000. a year, that works out to $240.34 per hour, or $4.00 and a little per minute. If I spend 5 minutes in the washroom, I just made $20.
> The CEO of Ford makes 37 million a year, and that works out to $17,465. and change per hour. He also lives in Seattle, and the company flies him home on the weekends in the $137m GulfStream. That might be considered somewhat excessive by *most people* who earn the average +- $47,000. per year
> 
> Just a thought...
> Mark S.


Is that really the standard you live by, "most people?"

We need you at my Home Owners' Association meetings :devil:


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## pt4u67 (Apr 27, 2006)

Its amazing how much time has been spent in this thread, and society in general, counting other peoples' money. 

I wonder how many who are doing this are urging their children to be careful not to be too successful in life.


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## Howard (Dec 7, 2004)

KenR said:


> Jack,
> 
> If I had been making a million or so and lived in NYC, my expenses would be high also. Nice apartment, clothes, lifestyle, etc. Who wouldn't be living it up to an extent? Cut that amount by half or two thirds, and anybody would say ouch.


and I wish we all had a luxury apartment,fine clothes and and a fantastic lifestyle but we all don't have the money to do those sorts of things.


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## Kav (Jun 19, 2005)

PT
You and I were walking along a trail and discovered $1,000,000 in loose bills. You saw it first. Here is $100 finder's fee. I have a large rucksack. You have a fanny pack. We collect the money, you doing the stooping over and I directing you to bills in tree branches, down gopher holes and under coyote scat. We manage to recover $ 673, 892. We sign an agreement of confidentiallity not to disclose the location for future recovery efforts.
I drove us, so I take an additional $1000 from your fanny pack for operating expenses. As I drop you off, the subject of dividing the money comes up. I tell you I supplied the big rucksack, and everything in it is mine. You get to keep everything in your fanny pack. Oh, and I have the only car in town, and I am taking my 18 y/o nephew with me next time to look.But, just to show my magnanimity, I'll buy subway sandwiches.
Sound fair?


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## Relayer (Nov 9, 2005)

Is there is an employer/employee relationship involved in this little fantasy?


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## Kav (Jun 19, 2005)

The first archaeological evidence for commercial specialisation is in Eastern Europe. It is a neolithic worksite for chipping decorative beads, predating those marvelous antique glass button cufflinks Kent Wang sells.
I am sure when people started this enterprise everybody was going to get equal amounts of Ibex meat and medicinal herbs. And I am equally sure some 'chief' by virtue of tall stature or blond hair became the top bead guy, receiving two portions of ibex and yelling at the slower chippers with threats of less ibex meat.
Rumour has it a very tall, 6' skeleton with a flint projectile point lodged in his throat vertebrae was recently located in a luxery hut with two hearths.


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## Beresford (Mar 30, 2006)

I have to say, the $500,000 cap struck me as ludicrous. It showed how our government officials are not living in the real world. At least around here, a second-tier regional bank executive makes about that much. No executive qualified to clean up one of these financial messes (by definition, someone who better be pretty good at serious problem-fixing) is going to touch that job, with all its headaches and risks, if only paid $500,000.


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## TMMKC (Aug 2, 2007)

Beresford said:


> I have to say, the $500,000 cap struck me as ludicrous. It showed how our government officials are not living in the real world. At least around here, a second-tier regional bank executive makes about that much. No executive qualified to clean up one of these financial messes (by definition, someone who better be pretty good at serious problem-fixing) is going to touch that job, with all its headaches and risks, if only paid $500,000.


I imagine Richard Holbrook's contract with the State Department is worth well more than $500k to clean up the mess in the Middle East.


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## eagle2250 (Mar 24, 2006)

Beresford said:


> I have to say, the $500,000 cap struck me as ludicrous. It showed how our government officials are not living in the real world. At least around here, a second-tier regional bank executive makes about that much. No executive qualified to clean up one of these financial messes (by definition, someone who better be pretty good at serious problem-fixing) is going to touch that job, with all its headaches and risks, if only paid $500,000.


While I understand and can appreciate the (almost shockingly) unbelievable reality of what you are saying, the financial reality of "Main Street America" is that very few members of the American electorate can ever hope to make that kind of money and yet are expected to sit calmly by and watch, as our Government prints a Trillion, plus dollars of 'funny money' to correct the ills, brought on by the decisions and actions of the 'brain children' you refer to and by our very own elected officials. Given those realities, a $500,000 cap, seems more than reasonable to me!


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## Phinn (Apr 18, 2006)

jackmccullough said:


> I don't consider taxes "theft", and I don't think most of us do, so it's pretty hard to have a rational conversation with someone who does.


That strikes me as a little funny, because I find it to be pretty hard to have a rational conversation with someone who still believes in the morality of taxation and the State.

Taxation is not mere theft. It's slavery. Theft happens once, or at least sporadically. Slavery is perpetual and institutionalized. From the dawn of human civilization, for thousands of years, slavery was not only common, but was actively defended as not only necessary to preserve society but called an affirmative moral good. All kinds of mental gymnastics were invented to justify it.

Not all that long ago, the people who pointed out that slavery is immoral were considered not merely wrong, but a little strange, beyond the capacity for rational conversation. They were viciously attacked, derided and ridiculed.

Imagining a society without the monopolistic, coercive power of a State probably seems just as strange to you.


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## ksinc (May 30, 2005)

Phinn said:


> That strikes me as a little funny, because I find it to be pretty hard to have a rational conversation with someone who still believes in the morality of taxation and the State.
> 
> Taxation is not mere theft. It's slavery. Theft happens once, or at least sporadically. Slavery is perpetual and institutionalized. From the dawn of human civilization, for thousands of years, slavery was not only common, but was actively defended as not only necessary to preserve society but called an affirmative moral good. All kinds of mental gymnastics were invented to justify it.
> 
> ...


Phinn, While I agree with you re: taxation, I think you mischaracterize yourself in your opening statement. It's not my recollection that you have ever demonstrated difficulty having a rational conversation with people you disagree with; as Jack states and does.

Of course, I haven't read your blog yet either.


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## DukeGrad (Dec 28, 2003)

*PHINN*

Gentlemen

Phinn, I love what you wrote my friend. I just got lost trying to follow, and understand.
I love it though.

I with Jack on this one though. Although I am siding to what Phinn says!

Nice day gents


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## DukeGrad (Dec 28, 2003)

*Cost of NY*

Gentlemen

NY has become very expensive now. When I was there, making about 5 million a year. I commuted to Newburgh and got a cheap place up there!

Nice day


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## pt4u67 (Apr 27, 2006)

The conventional wisdom, by this thread and the news cycle, is that the government has now become a shareholder, a market participant if you will, in the banks. The people, through the congress, have a right to make demands and dictate to the banks how they should do business. 

The problem is that government is not just a market participant. No other market participant has subpoena power, the power to print money nor a monopoly on violence. Ordinary shareholders cannot show up to your office to arrest you. To the extent that government participates, it should do so as a customer for services provided by the private sector. 

Congress is getting itself involved in matters it hasn't a clue about. Since when is demagoguery good policy?


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## Miket61 (Mar 1, 2008)

Disappointing news, for me, anyway...

Yesterday I read an article on the New York Times web site indicating that the state legislature was strongly considering raising the income tax on "the rich," meaning people with an income over $250,000 a year.

I posted a comment that $250,000 in Manhattan was equivalent to $150,000 in Brooklyn, or $125,000 in Philadelphia. And in Philadelphia, a couple who both have white-collar jobs could be approaching $125K between them.

The _Times_ wanted to publish my quote in the print edition. Unfortunately, I use an obscure e-mail address for my comments there and didn't check it until it was too late for them to use it.


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## Kosh Naranek (Apr 24, 2008)

These folks are very lucky to have a salary of $500k. Many would love to see a lot of them in jail. Perhaps Ask Andy's could get them a good deal on upscale, tailored orange jump suits.


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## pt4u67 (Apr 27, 2006)

Kosh Naranek said:


> These folks are very lucky to have a salary of $500k. Many would love to see a lot of them in jail. Perhaps Ask Andy's could get them a good deal on upscale, tailored orange jump suits.


Its nice to see someone standing up for truth, justice and the American way. Let's just dispense with the courts and let the mob be judge, jury and executioner. I'm sure the French wouldn't mind dusting off some of their old guillotines and selling them at a discount; remember that exports outside the EU are VAT exempt.


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## Kosh Naranek (Apr 24, 2008)

With respect, while there is no doubt that the justice system should take its course it is difficult on the surface (for me at least) to have any sympathy for people who pay themselves fabulous amounts of money while at the same time creating monetary instruments that neither they nor anybody else fully understood. Having invented these they then shed them off to others and in the process brought ruin to the financial system and created chaos and personal pain for growing numbers of people. 

What they (and apparently some on this thread) don't seem to comprehend is that with responsibility comes accountability. These people have misused their trust and now need to accept accountability for their collosal mismanagement and greed.

Guilt is for the legal system to decide and mete punishment as appropriate. Incompetence and negligence is something which can be handled admistratively. Had these people worked for those defending them here and brought ruin to their company I am curious how tempered opinions would be. 

In any event, this thread deserves to die.


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## ksinc (May 30, 2005)

Kosh Naranek said:


> With respect, while there is no doubt that the justice system should take its course it is difficult on the surface (for me at least) to have any sympathy for people who pay themselves fabulous amounts of money while at the same time creating monetary instruments that neither they nor anybody else fully understood. Having invented these they then shed them off to others and in the process brought ruin to the financial system and created chaos and personal pain for growing numbers of people.
> 
> What they (and apparently some on this thread) don't seem to comprehend is that with responsibility comes accountability. These people have misused their trust and now need to accept accountability for their collosal mismanagement and greed.
> 
> ...


I meet people all the time selling things of questionable value with limited understanding of their own product; I just don't buy them.


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## Kav (Jun 19, 2005)

THe brilliant company exec hears about the $500,000 cap and goes into apoplexy. ' Those SOBs think I am going to fix this mess for a lousy----vawump,hack,cough vamwoup hack as his associates help him to the executive washroom.

The 60 something grandmother comes in; her feet hurt her eyes hurt, hell, everything hurts trying to keep her family together. She looks at the vomit adorned carpeting and desktop.She, in turn turns red. The SOBs expect me to clean up this mess for minimum wage?


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## Phinn (Apr 18, 2006)

_it is difficult on the surface (for me at least) to have any sympathy for people who pay themselves fabulous amounts of money while at the same time creating monetary instruments that neither they nor anybody else fully understood. _

You're talking about Congress, right?

Creating these loans, expanding mortgage credit, marketing them, making it easier to qualify, getting more and more people to take them -- this has all been the openly declared, oft-repeated policy of the US government for the last 20-30 years.

Congress and the President(s) implemented this policy of ever-expanding mortgage credit through government-sponsored enterprises (GSEs), such as Fannie Mae.

The government officials said they wanted everyone to own a house. So they intentionally loosened mortgage credit. And kept on doing that, with increasingly aggressive loan guarantee programs, decade after decade.

Banks were the instrument through which the US government and the mortgage-related GSEs implemented this policy. The lenders were willing accomplices, and they made their money along the way, like a lot of other parasitic government contractors do. And they should fail for having participated in this fraud.

But the fraud originated with the government. Make no mistake about that.


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## ksinc (May 30, 2005)

Phinn said:


> You're talking about Congress, right?


Good question!

When Maxine Waters was asking her questions today, I wanted just one Bank CEO to ask any congressperson to raise their hand if they knew the NPV of their gold-plated healthcare plan cost to taxpayers.

Of course, the CEOs were busy playing, "say hello to the new boss; same as the old boss." Can't really blame them. Kudlow was asking "What did we learn?" over and over tonight. I think we learned Bank CEOs are marginally wiser than Automaker CEOs.


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## Howard (Dec 7, 2004)

DukeGrad said:


> Gentlemen
> 
> NY has become very expensive now. When I was there, making about 5 million a year. I commuted to Newburgh and got a cheap place up there!
> 
> Nice day


What job were you doing that paid 5 million?


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## Kav (Jun 19, 2005)

Pathmark supervisor?


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## mikeber (May 5, 2004)

brokencycle said:


> If you put a cap on executive salaries of banks, won't those executives just go elsewhere? I mean, a good executive is worth a lot of money, because the company makes money under him. A bad executive is worth money to get rid of, because you don't want him to stay and to continue to lose money; therefore, it makes sense to buy out his contract.


1) The company doesn't make money under him, but with him. Why do you think that it couldn't make the same money with someone else as CEO? 
2) But when you limit the salary of low ranking employees, won't they choose to go elsewhere? (I don't see anyone worrying about that...) Talent can be found at every level and those al the low and mid levels today will one day be CEOs...
3) Why outsource only lower jobs to India and China? We can hire excellent executives for 1/10 of what Americans make. Believe me, there are many talented people all over the globe. 


Miket61 said:


> Disappointing news, for me, anyway...
> Yesterday I read an article on the New York Times web site indicating that the state legislature was strongly considering raising the income tax on "the rich," meaning people with an income over $250,000 a year.
> I posted a comment that $250,000 in Manhattan was equivalent to $150,000 in Brooklyn, or $125,000 in Philadelphia. And in Philadelphia, a couple who both have white-collar jobs could be approaching $125K between them.


You are correct but that's exactly the point. Prices in Manhattan are so high because these executives are paying astronomical figures. Once they have (or are wiling to spend) less money, prices will drop.


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## 16412 (Apr 1, 2005)

pt4u67 said:


> Its nice to see someone standing up for truth, justice and the American way. Let's just dispense with the courts and let the mob be judge, jury and executioner. I'm sure the French wouldn't mind dusting off some of their old guillotines and selling them at a discount; remember that exports outside the EU are VAT exempt.


Yes! We should do away with gov. completely! Invite highway robbers to do their honest work! And the people who clean the toilets, how much should they get paid?! After all, if the filthy rich can't live with 500 grand do those under them deserve to live in a box on a heating vent? I always get tired of the rich begging for more and saying the the lowest on the scale gets paid too much. There is clean rich and filthy rich and you do a good job of pegging yourself as the latter. The rich begging for entitlements, at that off the backs of the tax payers, while complaining about the needy who asking for almost nothing. Amazing how many hypocrites there are.

Duke, you write about commuting because of the cost of living in NY. Your employees must have commuted further. Montana must be way cheaper. Somebody posted some time back about a woman making $6.xx and hour- can you imagine liveing off of that? It is nice to hear somebody here who has made lots (well beyond $6.xx and hour) not complaining.


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## ksinc (May 30, 2005)

I think we should jail the person that forced all these people to try to live and work in the same place! :devil:


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## pt4u67 (Apr 27, 2006)

WA said:


> Yes! We should do away with gov. completely! Invite highway robbers to do their honest work! And the people who clean the toilets, how much should they get paid?! After all, if the filthy rich can't live with 500 grand do those under them deserve to live in a box on a heating vent? I always get tired of the rich begging for more and saying the the lowest on the scale gets paid too much. There is clean rich and filthy rich and you do a good job of pegging yourself as the latter. The rich begging for entitlements, at that off the backs of the tax payers, while complaining about the needy who asking for almost nothing. Amazing how many hypocrites there are.
> 
> Duke, you write about commuting because of the cost of living in NY. Your employees must have commuted further. Montana must be way cheaper. Somebody posted some time back about a woman making $6.xx and hour- can you imagine liveing off of that? It is nice to hear somebody here who has made lots (well beyond $6.xx and hour) not complaining.


Define "needy" and define "filthy" rich. It is usually the poor that use the coercive power of government to extract goods and services from those who are productive members of society. By giving the franchise to those in society that have no stake in it (without property and living on the dole) they will use it to extract from us as a leech extracts blood from its prey.


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## 16412 (Apr 1, 2005)

There are many people who are good honest hard working people but are losing there jobs because of the inept at the top who are now crying about $500,000 dollar caps? You need your priorties straighten out. The ones who are losing their jobs and homes because of the fools at the top, who caused this ridiculous recession, deserve the entitlements more than the fools at the top who ought to be fired. Those putting this country into the downward spiral that it is in should not be rewarded with make believe worth, but jailed. As you can see I'm not talking about the bums who live under bridges but hard working people who actually contribute to a better country. There are plenty at the top of franchise who prove they are not worthy who have shown themselves to be leeches to the shareholders. The money needs to go to boosting the economy, not padding the wallets fools.

I do agree with lots that you have written about here over the years, but padding the wallets of fools I do not agree with. And the people at the top can tighten their belts like everybody else. And when the top start bawling in times like these they really show they are not worth the nonsense in their brains.


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## ksinc (May 30, 2005)

WA said:


> There are many people who are good honest hard working people but are losing there jobs because of the inept at the top who are now crying about $500,000 dollar caps? You need your priorties straighten out. The ones who are losing their jobs and homes because of the fools at the top, who caused this ridiculous recession, deserve the entitlements more than the fools at the top who ought to be fired. Those putting this country into the downward spiral that it is in should not be rewarded with make believe worth, but jailed. As you can see I'm not talking about the bums who live under bridges but hard working people who actually contribute to a better country. There are plenty at the top of franchise who prove they are not worthy who have shown themselves to be leeches to the shareholders. The money needs to go to boosting the economy, not padding the wallets fools.
> 
> I do agree with lots that you have written about here over the years, but padding the wallets of fools I do not agree with. And the people at the top can tighten their belts like everybody else. And when the top start bawling in times like these they really show they are not worth the nonsense in their brains.


PM Sent.


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## Howard (Dec 7, 2004)

Kav said:


> Pathmark supervisor?


Pathmark supervisors do not make 5 million a year.It'd would have to be less than that.


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## 16412 (Apr 1, 2005)

pt4u67 said:


> Define "needy" and define "filthy" rich. It is usually the poor that use the coercive power of government to extract goods and services from those who are productive members of society. By giving the franchise to those in society that have no stake in it (without property and living on the dole) they will use it to extract from us as a leech extracts blood from its prey.


_Define "needy" _Try living on less than subsisitance, like $6.xx an hour, many places even $10.

_define "filthy" _Taking that which really isn't yours. Taking something given for something else other than you. Both these two are stealing. Stolen is filthy whether it makes you rich or not. There are lots of rich people who are not filthy and there are plenty of poor who are filthy. All the filthy, from rich to poor, belong in the same jail ceil.

What I find amazeing is those who are filthy, rich to poor, have no or little empathy.

It is from the rich that I first heard the right to entitlements. When the shoe is on the other foot they sure bawl. Entitlements is swindleing from somebody else. So rich to poor those who receive entitlements are filthy. I think that is a good description.

What is your opinion of above?

Here's another thought. If you think $6.xx is what you should pay the lowest rungs try it for yourself. I'm sure you will think it is not a fair wage, then pay the lowest rungs what you think is fair. People without a heart say buhumbug.


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## ksinc (May 30, 2005)

I'm pretty frugal and I couldn't live (with my Wife) on less than $50k even in Florida which has a very low cost of living. I'm amazed at people living on $6, $10, or even $15/hr.

On the other hand, I put myself through school the hard way and graduated Summa cum Laude with an MBA. I started my own business in 1991 by going to a used car lot to find a notary to file my incorporation papers with the State. 

I've found most people are slackers and whiners compared to me. Empathy is a matter of perspective and for me, I don't care who it is - you're entitled to nothing; you get nothing and like it. :icon_smile_big:

Entitlements are not help. I work with organizations that provide help and it's very rarely in the form of handouts.

Market wages are based on marginal economic value not what is "fair."


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## pt4u67 (Apr 27, 2006)

WA said:


> _Define "needy" _Try living on less than subsisitance, like $6.xx an hour, many places even $10.
> 
> _define "filthy" _Taking that which really isn't yours. Taking something given for something else other than you. Both these two are stealing. Stolen is filthy whether it makes you rich or not. There are lots of rich people who are not filthy and there are plenty of poor who are filthy. All the filthy, from rich to poor, belong in the same jail ceil.
> 
> ...


I am empathetic. However I wish to be empathetic on my own terms and not have the state tell me with whom I should have empathy and how much my empathy should cost.

Using the power of government to solve social problems is a seductive trap but it usually leads to disaster. Need an example, the Chicago City Housing Authority. Most are being demolished because of the concentration of poverty that they created. Personally I think they should have left them standing but abandoned to serve as a monument to the stupidity of liberalism.


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## 16412 (Apr 1, 2005)

pt4u67 said:


> I am empathetic. However I wish to be empathetic on my own terms and not have the state tell me with whom I should have empathy and how much my empathy should cost.


I agree with that perhaps completely if the tax payer is not paying your wage.



> Using the power of government to solve social problems is a seductive trap but it usually leads to disaster. Need an example, the Chicago City Housing Authority. Most are being demolished because of the concentration of poverty that they created. Personally I think they should have left them standing but abandoned to serve as a monument to the stupidity of liberalism.


I don't see much problem there either. But if you pay a lower wage than liveable where are your workers going to live? Indeed, there are leeches on both sides of this coin. If you don't like the way gov. handles this problem, then this problem shouldn't have created in the first place with non liveable wages. Therefore, it is far cheaper to pay decent wages than to create slums and pay the gov even more. After all, gov workers have wages, too, which you claim comes out of your pockets, right!? I don't think you are quite as shrewd as you think you are. _"What goes around comes around." _Add to the cost some more, or hole in your pocket, to jip people you need to spend more on lawyers and tax accountants. So, how are you winning? Respect goes along ways. Besides, without all of those employees, how much would you make? A drop in the bucket? I am always amazed so many of those on the top rungs are so thankless. Is this thanklessness taught in college?

Most the business world is a zoo, or rat race, from top to bottom. I have seen from bottom to top rung leechs that should be fired. And then I have seen those from top to bottom who don't get payed enough. I meet a Rabbi who basically said, "Pay indiviuals what they are worth". I say pay a wage and give bonus to those who show they are worth more. If you pay a wage and give out varing bonuses and a reccesion comes you can still meet the wages until better times. Unions are a whole different ball game, aren't they? And each is different.

From a shareholders veiw point employees have different worths. CEOs are really just employees like a janitor. Each has worth. Such as, worth being fired. Those on the upper rungs are managers, are they not? Not a good manager who skims other emloyees worth. Small companies are different, because CEOs own the company, usually along with a few others. Some big companies have some big leeches, now and then.


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## ksinc (May 30, 2005)

WA said:


> From a shareholders veiw point employees have different worths. CEOs are really just employees like a janitor. Each has worth. Such as, worth being fired. Those on the upper rungs are managers, are they not? Not a good manager who skims other emloyees worth. Small companies are different, because CEOs own the company, usually along with a few others. Some big companies have some big leeches, now and then.


No, CEOs and other officers are not both "just employees like a janitor" and "managers." They are The Management of the company; which is vastly different than being a manager.

No, in fact most big companies are no different than small companies at all precisely because the Chairman of the Board is also the CEO. These roles are seldom separated as they should be in order to hold Management accountable to the Board, and the Board accountable to shareholders.

This is one of Karl Icahn's biggest complaints as a shareholder advocate and corporate raider. And also one of his keys to uncovering conflicts of interest that minimize shareholder value. In practice, even where these roles are separated they usually fail to produce real accountability because of CEO stock packages. If CEOs are only paid salaries and Board members are only paid stock then you get Boards holding Management accountable to shareholders as it is supposed to be.

https://www.icahnreport.com/report/2009/02/capitalism-should-return-to-its-roots.html


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## ksinc (May 30, 2005)

WA said:


> I meet a Rabbi who basically said, "Pay indiviuals what they are worth". I say pay a wage and give bonus to those who show they are worth more. If you pay a wage and give out varing bonuses and a reccesion comes you can still meet the wages until better times.


I prefer the adage "hire talent and pay for skills." No offense to the Rabbi's attempt to find moral equivalence in a secular world, but what an individual is worth is #1) too vague and #2) too subjective. Skills are marketable and therefore prices in the market are more objective and more reliable.

The Rabbi is practicing an exercise in futility long ago recognized in economics (which is a social science) and written about by Thomas Sowell in 1999 as _The Quest for Cosmic Justice;_ which I highly recommend reading.


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## 16412 (Apr 1, 2005)

ksinc said:


> No, CEOs and other officers are not both "just employees like a janitor" and "managers." They are The Management of the company; which is vastly different than being a manager.
> 
> No, in fact most big companies are no different than small companies at all precisely because the Chairman of the Board is also the CEO. These roles are seldom separated as they should be in order to hold Management accountable to the Board, and the Board accountable to shareholders.
> 
> ...


The "rules" are ever changing. And they do not change for all the reasons you think. Pre Reagan had some nice qualities and some of those qualities may be back with in ten years. Some because of social thinking and some because the market is different for a number of reasons and some because of ever changing laws.

Here is a thought about economics. For a number of years, pre Reagan, the economy was stifled. During Reagans time, till now, with a couple of tax gliches, the Dams were removed, and what happened? A flood of plenty. When the flood is over what are we back to? Random smaller floods with dry spells as before the dams. If you think this picture is correct where do you think we are in it? If you think this picture is not correct then what do you think the picture is.


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## ksinc (May 30, 2005)

WA said:


> The "rules" are ever changing. And they do not change for all the reasons you think. Pre Reagan had some nice qualities and some of those qualities may be back with in ten years. Some because of social thinking and some because the market is different for a number of reasons and some because of ever changing laws.
> 
> Here is a thought about economics. For a number of years, pre Reagan, the economy was stifled. During Reagans time, till now, with a couple of tax gliches, the Dams were removed, and what happened? A flood of plenty. When the flood is over what are we back to? Random smaller floods with dry spells as before the dams. If you think this picture is correct where do you think we are in it? If you think this picture is not correct then what do you think the picture is.


Well, since you have no idea what the rules are, or what reasons I think they exist/change, please entertain us further ...

Simple facts like how a BoD and Management are structured and should be structured to protect shareholders are common business knowledge. I apologize to you if you were insulted by my pointing out that you are simply wrong, but you had question marks after your statements implying you wanted to know.

Don't ask if you don't want an answer. Or call your 9th grade economics teacher you spoke about that taught you all of this.

I linked you to Karl Icahn's page. He's not exactly an amatuer; nor is he just beginning to think about how to get the most out of Management for shareholders. On the other hand, you seem to be working this out as you type and getting a lot of fundamentals wrong. That's not my fault.

If you start a separate thread about Reagan; I'll be happy to discuss what I think of his policies. Reagan confronted a totally different world and blindly following the past prescription is not the solution either. Here's something you can start with https://mises.org/econsense/ch12.asp


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