@Cycloptichorn,
Cycloptichorn wrote:
OCCOM BILL wrote:
Cycloptichorn wrote:It used to be, that 'the buck stops here' was used as a justification for the higher salaries; more responsibility. Under our current setups, however, the buck doesn't really seem to stop anywhere. Some execs are responsible people; the CEO of AIG voluntarily gave up his severance. I doubt we'll see much of that from others in the financial industry, though, and it's frustrating for the average worker to watch. The deck of business should be stacked to protect those at the bottom, that is, those with the least control over the future of the company; they are but slaves to the decisions of the executives. Instead, it's the other way around, and those who take all the risks for everyone, have all the protection. Frustrating
Oh please. Please get over this misguided idea that CEO's are bad guys and their employees are all helpless victims. Who do you think wrote all that bad paper? Why do you suppose they did so? Do you think it's just fear of the evil CEO... or do you think perhaps their commissions had something to do with it? Don't be naive. There's really no shortage of sleaze from the buyers to the builders to the brokers... and that part is nothing new.
There really are no innocents here (position-wise)... except those of us who didn't participate.
I agree that there was sleaze at all levels. But somebody ordered these people to pursue a larger strategy, and those people are going to walk away with tons of cash. The people who did the grunt work, ethical or not, won't. The execs shouldn't be treated any differently. The buck does stop at the top, right?
You're getting closer... but no. No one has to order mortgage brokers to pursue riskier strategies.
Many (most?) of these people will cut every corner, turn the blind eye to every question mark on an application, and many will literally manufacture documents to fill in gaps... all without any encouragement whatsoever from their employers. Think of it like this; would you like to make an extra $1,000 today?
Just like the guys at the top; they don't need anyone to tell them to do anything "unethical"... they need regulation to reduce the temptation. Lies on mortgage applications are exceedingly common place... sometimes just from the customer, sometimes literally encouraged by the lender... and that has very little to do with the CEO... and it most certainly isn't a new development. Solutions that make sense, IMO, are:
Force the lending institution to carry the paper they write in THEIR OWN PORTFOLIO for either a period of time or until a minimum equity position is established. This would encourage CEO's to crack down on employees that cut corners, which in turn would encourage those employees to stop generating BS paper and/or stop accepting same. This way there would be a
reason to be accountable.
Today, much of the paper that's written is bundled up and sold as soon as it's written... so there is neither a reason for the CEO nor his employees to not write every damn piece of paper that can be squeezed into a bundle. For some companies; the idea of a CEO who cracked down on employees for legally increasing the bottom line would be considered preposterous. Again, this is a regulation issue... NOT a CEO issue.
Now while you call for some way to hold CEO's responsible; where is your disdain for the broker/ customer combination who signed to the lies in the first place? Here again, Cyclo, you have to factor in human nature.
Many customers just want the damn house and they'll sign anything you put in front of them to get it. Should they be prosecuted for fraud? Ultimately, they are the people who can easily be shown to have told lies. I can't remember
ever hearing of such a prosecution, can you? This isn't because of a shortage of guilty people, I assure you.
Many brokers will encourage this behavior because they simply want to make their commission... and in too many cases could hardly care less whether the customer can indeed afford the note or even if he defaults. There’s good ones and bad ones. The bank won't own the paper by the time the customer maybe defaults anyway, so it's not likely to come back on him either way. Many will nobly tell you they're just doing what it takes to get people in homes. Very gray area.
Many CEO's will allow sub-prime ARMS, stated W2's, and any number of low to no doc formats... because they simply want to sell the paper at a profit. This is their job... and there is neither anything illegal nor unethical about it. Not yet, anyway.
If anything; the CEO is less
directly responsible than either the broker or the customer... because he isn't privy to the actual bald-faced lies on the application. He simply lacks the incentive to police it. Some guys do and some guys don’t… and I’m sure they choose their employers accordingly… just as surely as their employers choose them accordingly.
Many (most?) of these people involved in the questionable paper business are out for guess who? Number One. I know you want to blame somebody really bad... but it simply isn't fair to blame the CEO's exclusively. I've known lenders who would tell a customer precisely which bogus documents he was missing... hint, hint. And I know lenders who will turn a customer away if they smell a rat... just on principle. It is not realistic to expect principle to drive the masses, however, for this we need regulation. Simple regulation would provide ample incentive to discourage this nonsense from the top. But it does not yet exist, so it is patently unfair only hang the CEO.
As for wages; a CEO's ability to negotiate high wages and golden parachutes, etc. are commiserate with his ability, whether you can fathom that or not. If his resume doesn't support his demands; he will not get the job. This too is a simple truth. His process is no different than yours or mine, and he isn't getting a million dollar raise just because it says CEO on his business card. I understand that YOU don't think he's worth that much; but who the **** cares what you or I think? Until such time as you or I have a multi-million dollar job opening to fill; it matters not at all what or who we think is or isn't worth what. The really simple way to understand that they really are worth that much dough, is the same way we know if a ball-player is worth it:
Someone not under duress signs their check. It really is that simple.
