Profit for Government: World Bank Says Yes to Japan, etc.; No to Liberia.

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By J. Yanqui Zaza

Multinational corporations and institutions, particularly the World Bank and IMF have and continue to deceptively coerce poor countries into prohibiting government’s role in managing profit-making assets, but at the same time tolerate the governments of Japan, Germany, Botswana, etc. who own and, or manage profit-making-lucrative assets.

For instance, Germany owns about 34% shares in the Mercedes Benz car company and, or Japan owns shares in countless profit-making companies. In the case of Japan, the Government does not just buy shares to make profits, but also it buys stocks in order to influence the market, according to Wolf Richer.

In another instance, in 2014, at the request of Japanese Prime Minister Shinzo Abe, the Bank of Japan (BOJ) and Government Pension Investment Fund (GPIF), bought $350 billion worth of stocks in 2014 and later purchased $59 billion worth of stocks at a time the stock market was tanking, Mr. Richer stated.

I have not heard about or read any letter of protest or disapproval by capitalists of Japan’s attempt to influence the stock market. Neither has the World Bank along with its allies condemned the purchase of stocks by government bureaucrats or the economic arrangement of Germany under which the government of Germany owns shares of companies.

It is not clear whether the World Bank has one standard for poor countries and a different standard for certain countries such as Japan, etc. However, certain things are clear. Government’s purchase of shares will increase government’s influence in the stock market; it is also clear that the government, like any other investor, will receive revenue from corporations.

And, of course with additional revenue, a country will have no need to borrow money and will use its cash to manage its currency exchange rate. As in the case of Germany, policy makers used the additional revenue from companies to finance social programs such as the tuition-free-university programs.

Do multinational institutions not refer to Japan as an example of a capitalist economy, whose economic fundamentals of achievements should be embraced? If yes, why are multinational lending institutions allowing certain countries to earn revenue form profit-making activities; but prohibiting other countries such as Liberia from generating revenue from gold, diamonds, etc.?

More so, the World Bank is not just coercing Liberia into privatizing utility entities, but it has encouraged Liberia to give its messy educational system to profiteers. But results of Public Exams indicate that private-run-schools are also messy. It is not only Liberian private-run-schools that are messy, private-corporations were bailed out in 2008 after creating a messy global financial situation.

Yet, the World Bank insists that only profiteers should invest in profit-making activities such as food production. In fact, in Ghana, the Bank told the government that, they (the World Bank and the IMF) would not give Ghana any more loans unless the government cut the farming subsidies completely. (http://www.africaw.com/how-the-world-bank-and-the-imf-destroy-africa).

The main reason behind this was that, profiteers had to import rice from western countries like United States (who’s a major partner of the World Bank and the IMF). Ghana is said to lose over US $500 million every year through the importation of foreign rice. Why would the World Bank stop Ghanaians from producing rice and encourage food importation when the IMF (its ally) stated in its Report 18/172 that increase in importation is not good?

This is because investment in importation contributes to the depreciation of a country’s currency exchange rate, thereby, forcing the country to borrow money from outside the country, the Report stated? The IMF also stated that exports usually generate revenue for the country, but importation requires using up a country’s “rainy-day-cash.”

Deceiving the weak and poor in order for a few privileged people to get rich and, or maintain power is not new. For instance, in 64 AD, Emperor Nero, looking for way to deflect accusations by his subjects that he was responsible for the fire that burned Rome for six days and seven nights, placated the ruling elite and laid blame for the fire on the Christians.

He then ordered the arrest of a few members of the sect who, under torture, accused others until the entire Christian populace was implicated and became fair game for retribution. (www.history.com/this-day-in-history/neros-rome-burns). Prior to black slavery, European merchants had realized that they could increase profits if they enslaved some of their kinsmen. So, they propagated the myth that those whites who were vulnerable, poor, unemployed, etc. were inferior and should be controlled.

Later, the masters forcibly shipped a large number of white slaves from Europe into North America. Unable to continue enslaving their kinsmen, they discovered black slaves. Intimidation, fear, and or death was not sufficient to continue enslaving the blacks. So, in order to keep making money, they lied and stated that enslaving blacks was necessary because blacks needed to be saved from harming themselves.

Profiteers might have abandoned the cruel method of making profits, but their desire to exploit the poor has not changed, according to Ms. Saskia Sassen in her book called “Expulsion-Brutality and Complexity in the Global Economy.” She argues that capitalists nowadays do hire scientists, mathematicians, engineers, lawyers, and accountants to hide their deception in order to make profit.

Continuing, she stated that it was the $62 trillion-dollar Credit Default Swap (i.e., a complex financial arrangement that is understood by a few handful people) that destroyed wealth in 2008, and not the $10 trillion-dollar subprime mortgage foreclosures that began in August of 2007. Guess what, even after people realized that poor-home-owners were not the culprits, rather chief executives were responsible for the 2008 financial meltdown, U.S. President Barack Obama awarded them (chief executives) $13B as bonuses, she added.

Liberians should not expect profiteers to willingly trickle down any share of the profits from gold, etc., because mankind, by nature, is greedy. Japanese, Germans, Tswanas, etc. are not getting revenue from companies because profiteers are generous or benevolent. If you have any doubt, let us review the past twelve years. Guided by international experts from 2006, former President Ellen Johnson Sirleaf limited the role of government in the economy as herpredecessors have done since 1847.

More so, she added another lie that is excessive payment to a few economic advisers would reduce the demand for bribes. Well, in fact, it was the President herself, who openly began the bribery scheme when she bribed Liberian Lawmakers with vehicles on behalf of Mittal Steel. And today, instead rather than having  reduced bribery,solicitation, exploitation is on the rise in Liberia.

If Ms. Sassan and others are right in stating that profiteers will never abandon the exploitation of the poor, then Liberia must institute an economic system that will guarantee its share of the income generated from gold, etc. Additionally, the Pro-Poor government should invest, at least, in food production since profiteers prefer to invest in import/export, gold, diamonds, etc. As the old saying goes, freedom is acquired through hard work, and not by appeasing the rich and the powerful.

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12 COMMENTS

  1. The paper’s opinion goes into detail on several micro and macro economic topics and misses the facts on each. He, perhaps relaying truthfully the results of policies of governments and UN agencies (IMF and World Bank), but missed providing the underlying purpose of those agencies, how they are funded, and terms and conditions they set for loans and the narratives on the free market makes the story misleading in educating and informing the public on the various topics he addressed (e.g., IMF restraints on poor countries government investment Another is citing a writer’s opinion of what caused the 2008 financial crises that reflects a lack of understanding of how credit default swaps contracts were created to insure the securitization of the underlying mortgage in a derivative transaction). If this sounds confusion, it’s because it is complex, as the author correctly stated. It will take more space than I’m willing to selfishly take to elaborate in detail. What I can provide in short are these: The IMF and World Bank, with separate goals, assists developing and poor countries with favorable loans based on market rate, they are funded by member countries, and investments in the free market, and have no unilateral authority to restraint a sovereign nation from investing in the free market. If there’s any condition set on a nation receiving a loan, it’s because of that nation’s financial condition, stability and receptive business environment. One cannot compare any poor country or developing country economic environment to Germany and Japan. One must ask, would you loan to someone without a sense or assurance that the person has the ability to pay or require the person to take steps that demonstrate they’ll be able to pay? No difference with the IMF and World Bank.

    I’ll provide in a subsequent comment a synopsis on Credit Default Swaps (CDS), the underlying subprime mortgage market and the 2008 crises and how the Obama administration’s actions saved the global economy, and prevented possible change in governments in developing countries.

  2. As I stated in a previous comment, I’ll provide a layman’s understanding of the 2008 crises. Bear in mind, there are numerous other reasons being given by different economists and lawyers for the crises from inadequate regulations, fraud, greed as always and lack of investors sophistication amongst others.

    A “credit default swap” (cds) is a contract between two parties (counterparties where one is the seller and then the buyer). The contract is taking to last for a certain period and then it expires. It is similar to buying an insurance on the life of a person for death benefit payment to you the buyer once the person dies. So you the buyer makes periodic payments (premium) to the seller (insurance company). You can also purchase an insurance on an employee covering him while he’s still in your employed. That contract expires when the employee leaves the job. With that basic understanding, let us look at the 2008 crises. A decade before 2008, the U.S real estate market was booming. Prices of homes kept going up dramatically. Mortgage companies, some out of greed, started giving out loans to practically anyone with a job and income. Sometimes the loan officers even forged false incomes on loan applications, and because regulations were laxed no one cared to verify. After all, they figured if the home owner defaults, the home will be foreclosed on him and sold at a higher price since the belief was the price would keep going up. Subprime mortgage loans were simply loans to people who didn’t meet the credit requirements for the loan. They were loaned to simply on market forecast of home price going up. Now, banks that give out loans wanted to protect the downside so they relied on the financial instrument, cds, as insurance protection. They as the buyers paid another party, like a major bank or insurance institution a fee in a cds contract with expiration dates on the condition that if a certain event occurs (like defaults), the bank selling the cds will make a payment to the buying Bank of the value of the contract. So there were buying and selling of these instruments between financial institutions as a security in itself that relied on how the underlying mortgage market performed. This was magnified by the creation of layers of tranches. Buyers of the first layers had first right to payment in case of default and then second tranches buyers and so on. Remember now all these layers of tranches are relying on the underlying mortgage performance. So when the poor guy couldn’t pay his mortgage loan and defaulted, the bank seize his home. The problem now, at this point, was that the housing market went burst starting before 2007. So Banks were left holding actual homes worth less than the loan they give out to homeowners. You also remember the buyers of the cds. They are now in for a big payout because the defaults (e.g., death) for which they paid premium has occurred. The problem was the sellers could not pay out as the obligations we’re just too much (insurance companies never ever expect everyone they insure to all die at the same time. If that was to happen, they would all crash). This created a staggering trigger effect as major wall Street firms heavily into this structured security were unable to fulfill their obligations. As as each started to collapse, the government had to step in to prevent a spillover into other sectors. My employer and another one of the U.S largest banks had to merge to prevent both from collapsing. In fact they had to merge on a Saturday into Sunday morning of that week in 2008. Had they waited to Monday when trading would begin on Wall Street, both would have collapsed and take down the rest of the Wall Street banks and the entire U.S. market, as the week before had already seen two of their counterpart banks go down. Major industries, like the auto industry was on the brink of collapsed and hundreds of thousands into the millions would have lost jobs globally as well as entire savings. The Obama administration infusion of cash was never to CEOs. In fact in every firm the government took over with share purchases, the CEO was replaced. The payout to executives like my firm’s CEO, was part of their employment contract and was protected by law. The government had no authority over it. My attempt here is in no way a denial of the lack of oversight that allowed rogue business practices to create structured securities that we’re fraudulently traded leading to the collapse. But I do hope I provided a synopsis of an insider’s view based on his experience, into the market crash. I can’t provide certain specific examples for privacy and proprietary rights reasons of both my firms I worked for during the crises.

  3. Comrade J. Nikita Zaza, we all know that you’re a die hard communist. You even have a portrait of Nikita Khrushchev hanging on the wall in your kitchen!

    But hey, you say that “..the World Bank is not just coercing Liberia into privatizing utility entities, but it has encouraged Liberia to give its messy educational system to profiteers. But results of Public Exams indicate that private-run-schools are also messy.”

    Can you tell me WHICH “Public Exams indicate that private-run-schools are also messy”?? Also, can you name the private-run-schools that are “messy”??

  4. In light of the latest report on discussion being held between the government and the World Bank for loans that appears to be negotiated at a favorable rate, I encourage the paper to revisit its critique here of these valuable institutions by looking at the facts and sources of those facts for this story. And the fact that a Liberian has been elevated to the top legal position, one cannot reasonably suggest she would support acts that legally undermine poor countries’ sovereignty in financial related endeavors.

  5. Hi Mr. Larry Emerson,

    I am sorry for the delay to comment on your views.

    Sir, I don’t think that Ms. Saskia Sassen’s comment is different from your assertions. You stated that “So there were buying and selling of these instruments between financial institutions as a security in itself that relied on how the underlying mortgage market performed. THIS WAS MAGNIFIED BY THE CREATION OF LAYERS OF TRANCHES. BUYERS OF THE FIRST LAYERS HAD FIRST RIGHT TO PAYMENT IN CASE OF DEFAULT AND THEN SECOND TRANCHES BUYERS AND SO ON. REMEMBER NOW ALL THESE LAYERS OF TRANCHES ARE RELYING ON THE UNDERLYING MORTGAGE PERFORMANCE.”

    Similarly, Ms. Sassan “stated that it was the $62 trillion-dollar Credit Default Swap (i.e., a complex financial arrangement that is understood by a few handful people) that destroyed wealth in 2008, and not the $10 trillion-dollar subprime mortgage foreclosures that began in August of 2007.”

    So, sir, who were the culprits of the 2008 financial debacles, if the chief executives created layers of trenches that were not supported by the values of the houses of the borrowers and, or collateral? The sellers of the credit defaults swaps were acting as insurance agents who were selling insurance premiums to insurance policyholders, but unlike insurance agents, yet they did not maintain adequate capital to pay out the benefits to the buyers of the credit defaults swaps.

    Within the insurance industry, each insurance company is required to do certain things: 1) Spread the risks of a policy (house, vehicle, and, or life) among many insured policyholders; 2) maintain a percentage of the premium of each policyholder with an Insurance Authority; 3) Invest a portion of the insurance premium into fixed income such as government bonds and, or municipal bonds; 4) Reinsure each policy, etc. These requirements do help to convince ordinary policyholders that an insurance company is adequately capitalized to pay his/her benefits at any time.

    The chief executives, again, were not interested in the rental income and, or mortgage payments, but the commission fees, gains, etc. earned from trading credit defaults swaps. I am not indicating it was a personal decision by President Obama to reward those chief executives who created the financial meltdown, but the fact is that the Obama Administration rewarded those chief executives who created the mess. In fact, many prominent Americans called on the Obama Administration to prosecute the greedy executives the same way another President, Franklin D. Roosevelt punished those individuals who were responsible for the 1930s financial crisis.

    IMF and the World Bank: You claimed that these are subsidiaries of the non-profit-making entity, the United Nations. It is true that about 170 countries own shares of the World Bank. But multinational profit-making entities do earn interest income from bonds they purchased from the World Bank. In addition, many poor countries are coerced into buying goods and supplies (i.e., many times at unfavorable prices) made in those countries that usually influence the policies of the World Bank. So, Sir, it is substance over form. In reality, the World Bank and the IMF are creating an environment conducive for multinational profit-making entities to make more profit from poor countries.

  6. Mr. Zaza. Thanks for acknowledging my comments and responding. And I do appreciate the greetings, but please, Larry will be fine. While you provide an accurate description of operations of business institutions, readers should note that in free market economies businesses are established to make profits for their shareholders. And investors bear the risks when they invest in securities of publicly traded companies. The gist of my comment was to make sure that readers understand the CDS business is not illegal at all. In fact it’s one of the best ways that corporations and shareholders can maximize their profits, while at the same time spreading the risk to minimize losses. It is actually like an insurance policy and it allows firms to also make what we call credit spread strategies to minimize loss to the firms. Most investors, including institutions that managed hundreds of billions of dollars of other peoples’ monies, knew the risk involved in investing in these instruments and they still invested because they believed in the broader consensus that the housing market would keep going up. The Subprime market and the lack of regulatory oversight both within the financial markets and the governmental agencies. So, the collapse of the market was reliance on the underlying subprime mortgage that had lost its value thus rendering the layers of tranches worthless. With proper risk management and deterrent, firms like Goldman Sachs made billions because their analyst did their homework and the legal team made sure the bankers complied. And so, Goldman was one of few firms that bought insurance (CDS) relying on the assumption the market would collapse. On the Obama administration payout to CEOs, there’s nothing the administration could have done to prevent the payouts to these CEOs. These executives salaries are contractually agreed upon and publicly disclosed by requirements under disclosure rules. They would have gone to court had the administration tried to interfere with the compensation arrangements. Of those institutions that the government took over to prevent it from collapse, like AIG, the government simply bought all its’ shares. As such, the government, as sole shareholder, determined the compensation. In fact, in all those cases, the CEOs were removed and replaced by someone designated by the government. Those that remained viable institutions, the CEOs were paid based on contractual agreements that were approved by the respective Compensation Committee of the Board of Directors of each corporation. Had congress taken any step to terminate business contracts of publicly traded corporations, absence tampering with the constitution to allow the government to pass statutes that would regulate public companies’ salary arrangements, the courts would have most likely declared it unconstitutional. That’s why it did not materialize. The CEO of my firm, walked away, after the Subprime crises started in 2007 and before the 2008 collapse, with $160,000,000. Note also, CEOs compensations include not just base salaries. It includes vested interests accumulated over years of service in the corporation, bonuses, performance incentives, etc., all of which are contractually agreed upon when they become CEOs. In essence, I think Mr. Zaza, we probably do not disagree on the financial information and story. Any difference we share is not material. Thanks for the response and pardon any grammatical error. I wanted to response before rushing out to meet a deliverable deadline.

  7. Hi Mr. Larry Emerson,

    Here is another story about the 2008 financial meltdown. The August 8, 2018 NY Times Business Section reported: “…the financial crisis… was fomented and exacerbated by the so-called investment banks — like Bear Stearns, Lehman Brothers and Merrill Lynch — and that the so-called commercial banks — like JPMorganChase and Bank of America…”

  8. Mr. Zaza. Those are the Wall Street firms that traded and will always trade in these instruments, including Morgan Stanley, Goldman Sachs and many more. In an earlier post on I commented on my firm and it’s merger with another bank. I worked for Merrill Lynch (at the time, the world largest Brokerage firm) as a VP in the office of the General Counsel. We had to merge with Bank of America on the Saturday of that weekend in 2008, as I mentioned in my earlier post, or both firms would have collapsed, had they waited to Monday when trading would have started. If that was to have happened, J.P Morgan Chase, Morgan Stanley, Goldman Sachs and every one of the Wall Street firms would have followed suit and colapsed, which would’ve also included European Banks like UBS, Deutsch Bank and Asian Banks like HSBC, MUFG, taking down the global economy. That’s why the U.S. Government literally forced JP Morgan to acquire Lehman at the cheap to lessen the damage during the week of that weekend. It was a frantic weekend. I remember being flown to Charlotte to meet with counterparts from Bank of America to discuss integrating the two firms systems, securities holdings and reviewing the disclosure obligations the merger triggered. So, it is true, all the firms listed traded in risky securities. There was nothing illegal about it. It’s the lack of oversight and restraints on the extent of their trading. They were simply over leveraged. I’ve spent my entire career working for these firms in one capacity or the other.

  9. Hi Mr. Larry Emerson,

    1) Responsible actors of the 2008 financial meltdowns: Homeowners or big investment banks-

    The writer of an article stated that “People were worried about AIG in the summer of 2008,” when an analyst report suggested the company was in for trouble, McDonald said. “AIG’s credit rating had been downgraded by all three major agencies in May and June of 2008, and in August and September, people started to terminate their agreements,” asking for their collateral back.”

    So, Sir, as stated by Ms. Sassan, the $62 trillion financial meltdowns started in 2008 and not in 2007 as you have stated.

    2) Insurance or financial transaction:

    Also, the financial transactions did not meet the requirements of an insurance entity as I outlined in my earlier post.

    You stated, “It is actually like an insurance policy and it allows firms to also make what we call credit spread strategies to minimize loss to the firms. Most investors, including institutions that managed hundreds of billions of dollars of other peoples’ monies, knew the risk involved in investing in these instruments and they still invested because they believed in the broader consensus that the housing market would keep going up.”

    Sir, Ms. Sassan’s statement is not different from the writer’s assertion. “AIG’s credit default swaps did not call for collateral to be paid in full due to market changes.”

    If I may ask sir, were your firm involved in convincing AIG to sell CDS without collateral? Read this statement by a writer. He stated that Mr. Robert McDonald’s investigation disclosed that: “There was this idea that real estate investments were safe because the securities had a AAA credit rating.” —Robert McDonald. However, the writer continued and stated, “Their analysis showed, in fact, that these assets ended up losing money in the long term—meaning AIG executives’ assertions about the safety of these investments were incorrect.”

    3) Bonus payment to chief executives:

    “…AIG executives’ assertions about the safety of these investments were incorrect.”

    You stated that “These executives salaries are contractually agreed upon and publicly disclosed by requirements under disclosure rules. They would have gone to court had the administration tried to interfere with the compensation arrangements. So, it is true, all the firms listed traded in risky securities. There was nothing illegal about it. It’s the lack of oversight and restraints on the extent of their trading.”

    Sir, my understanding of bonus payment is that it is based on performance. If so, are you implying that the chief executives’ performance was good, therefore they were entitled to the $13B payment? By the way, the Obama Administration and key players were aware of the fact that the big investment banks did bet on their prediction that the CDS transactions were not sustainable, meaning the CDS would collapse.

    Most importantly, the big investment banks got fees for advancing the CDS concepts and designing the accounting arrangements and legal ideas of the transactions that they benefited from.

    Some of you guys within the private industry might consider this type of activity as an excellent or a brilliant performance, even though it was based on deception and wrong prediction. But for other good law-abiding citizens, deception and, or wrong prediction is nothing but poor performance, a performance that could be considered negligent or grossly negligent.

  10. Hi Mr. Zaza. One thing is true. The global financial markets lost more than 30% of its value. I’m sure there are numerous analysis in print media as to the reasons for the meltdown with debates from all sides of the arguments on who the main culprits are. But, I can tell you from a practical perspective, the triggering effects started in 2007, leading to the actual meltdown in 2008. This is immaterial to point I want to drive through. I’ll try to address the numbered points you elaborated on in your comment to me:
    (1) Responsible actors of the 2008 financial meltdowns: Homeowners or big investment banks-
    There is no one culprit who is responsible for the meltdowns. Market actors, like investment banks, trading firms, hedge funds and other financial institutions are in the business of creating values for their shareholders. As such, they create strategies, financial instruments and utilize the free market supply and demand preferences of the market for products and services to implement strategies as well as introduce structured instruments to address the needs of investors. There’s always a responsibility on the part of institutions to have internal compliance, legal and risk management systems in place to mitigate various risks, such as credit, reputational, market risks and interest risks and investment risks. When laws are relaxed, rogue traders and bankers who are not properly monitored by their firms will oftentimes veer into strategies beyond their firms’ restrictive constraints on the extent to which they can expose a firm’s and its clients’ assets. Regulators are also expected to conduct periodic audits of institutions to ensure compliance with regulatory constraints. All of these were relaxed prior to the crises, years before the actual meltdown. So, yes, the collapse of the major financial institutions impacted the global economy because.
    AIG’s credit rating was downgraded as a result of the riskiness of the instruments it was insuring, mainly what we call Collateralized Debt Obligations (CDOs). CDOs bundle various debts obligations, from the safest to the riskiest into one, with the various debts known as tranches. Many investors that held Mortgage Backed Securities created CDOs, which included tranches filled with subprime loans, as I alerted in my prior comment for non-financial readers to understand.

    (2) Insurance or financial transaction:
    The question you raise is whether AIG’s transaction in Credit Default Swaps (CDS) met the requirement of an Insurance Company. AIG actually created a separate division, called AIG Financial Products (AIGFP) that was responsible for transacting the financial tool, we call CDOs. That’s another way, institutions like insurance companies and commercial banks go around the regulatory constraints from investing in certain securities. They simply create divisions that operate separate from the main entity that is restricted by law from participating in certain trades. And that is all legal. Note, AIG, like many financial institutions, investors and even research institutions and credit rating agencies and major universities just got their analysis wrong on the trend in the subprime market because the housing market was primed to go in the opposite direction than what were forecasted by many firms. This is an aspect of a free market economy. That’s why firms come up with complex instruments to mitigate the losses. And sometimes they become too restrictive and other times they become too relaxed. This is we have bear and bull markets. The firms that get their analysis right and have internal checks against rogue bankers profits and those that don’t get penalized by the markets. Investors who invests in the markets invests at their own risks.

    The problem was that AIG, like most other firms that got it wrong, did not think that there would be a need to pay out on this insurance on the CDOs insurance plans, because, as I mentioned earlier, there was not the expectation that the subprime market would collapse. In fact, this division of AIG was one of the most profitable division of the firm. But when foreclosures in the housing market rose to a very high level, AIG had to pay out on what they promised on the CDS contracts. I had earlier stated in my prior comment, Insurance companies never expect everyone they insure to all die at the same time. If that was to happen, the insurance companies would all go out of business. That’s why, in the financial market, after the firms transact in CDS, they make contra trades with other counterparties to mitigate any loss from the CDS trades.
    3) Bonus payment to chief executives:
    Wall Street firms have what we call incentives pay, which includes performance bonuses, salary, market performance of the firm’s shares, as well as contractual payment at the time of the employment contracts. Usually for low levels employees, there is no contract and incentive bonus payments are at the discretion of the firms. But for senior level executives, that’s actually part of their employment contracts that spell out how they would be paid. In this instance, all the firms that paid out their executives huge salaries even when their firms were unprofitable, was due to the contractual obligations.

  11. Hi Mr. Larry Emerson,

    These comments from the 8/26/2018 NY Times are not different from my views, which you did not accept.

    “Of course, averages obscure a lot. Americans have not shared equally in the losses from the crisis. Families of modest means have far fewer, or in many cases zero, assets; they may have lost their homes and their savings. The average family of three earning less than $42,500 a year saw its net worth chopped nearly in half, to $10,800 in 2016, from $18,500 in 2007, the Pew Research Center found. Wealth of families earning $42,500 to $127,600 fell by nearly a third, to $110,100. Yet, the wealth of affluent families who earn more than $127,600 jumped nearly 10 percent, to $810,800.

    “The crisis and the government response to it worsened longer-term trends that have caused wages to stagnate for most families while rewarding the top 1 percent with an ever-bigger slice of the economic pie. Obama officials and Congress clearly made a big mistake early in the recession by focusing more intently on saving banks — and, thus, bankers and investors — and much less on directly helping families facing foreclosures and layoffs. Later in the recovery, the decision by Republican leaders in Congress to oppose every Obama proposal prevented the government from doing much to help people regain what they had lost or to heat up the…”

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