Cute cartoon. I am confused by such magnanimous numbers as well. But if the cartoon is intended to suggest that 165 million dollars is just a small percentage of the overall bailout money and should not cause the uproar it has, I beg to differ. The $170 billion will be used to for the indirect benefit of many more persons than the $165 million would. And while the wine/gin/daughter analogy is also clever, it is misplaced. I think a more appropriate analogy would be to posit that taxpayers will possibly end up paying $170 billion for a program to rehabilitate a system managed by alcoholic predators and some of the program funds are going to pay the costs for your daughter to attend a private party at one of their mansions. Truly, the cartoon presents a fallacious argumentum ad misericordiam.
Cogito, the real nature of the problem is much more the fact that the average person out there gets a "bonus" for doing good work. As such, when they hear of a company in defacto default handing out bonuses to employees they associate, in their minds, that notion that the bonuses in question are being provided as merit bonuses to people who quite apparently haven't earned such.
The real fact is that, once you get above a certain compensation level there are other bonuses which apply which have nothing to do with "merit" (at least in terms of performance), but which are designed to reward company loyalty and pay the employee in question for the extreme specialty knowledge they've developed as a result of being on the job for a long time (Example -- when you've dealt with a client for 10 years, you get to know a LOT about their wants and needs. If you go to work somewhere else, you deprive the company of that resource. So, if all your clients in question are worth millions in annual revenue, then a few hundred thousand paid out to keep you in the job is money well-spent).
This appears to be very much what the majority, if not all, those bonuses paid out represent.
As far as the cartoon, it's more Randall's way of pointing out that relevancies matter. By attempting to get people all hot and bothered over a trivial amount of money going in one direction, they're managing to distract EVERYONE -- most particularly you and I -- from what's going on with all the rest of the money. It's classic misdirection: "Ooooh, look! Fireworks!" (takes rabbit from hat, shoves it into pocket).
There's a lot more of that sort of crap that goes on, and the media utterly colludes with, than you probably realize.
Stop worrying about the 165 mill and start asking what the hell is going on with the other 99.9% of the AIG bailout money. One thing to grasp is that when the media is blowing smoke, it's usually up your a**.
Well put. Many bonuses are reasonable and often a key part of a compensation structure to create incentives. I am not worried about bonuses for merit to those who toiled away at their supervisors' direction, even if the final outcome was that their companies failed. I just don't agree that more senior employees or executives that perhaps knew about the problem, and helped perpetuate it, should be rewarded. Although the bonus percentage might be the same as for less senior staff, I just do not agree that bonuses in the order of millions to those responsible are appropriate.
Ergo, I am X% in agreement with you. “X%” equals the percentage of the bonuses that were distributed in a reasonable fashion to line staff.
I also concur that we need to keep our eye on the rest of the $170 billion. We need to prevent any similar, inappropriate use of the bailout money. Perhaps the uproar about the bonuses will help curb other abuses. At least I hope so, but I have already heard calls for regulators to "let us mind our own business!" Well . . did that work for us before? Let's not throw good money after bad (or at bad actors)!
I think the more general message of the cartoon is as important as the specific topic. With "trillion" having suddenly entered our vocabulary in the last year, numbers need context. Because of sound similarity and our inability to appreciate concrete individual items beyond a very small number (say, about a thousand), we quite naturally regard a billion as sort of a large million, maybe twice as big, and a trillion a sort of very big billion, maybe a triple-sized one. This underestimates their actual size so dramatically that we must always include compensating context for these numbers.
1,000 is the number of people in a good-sized high school, an example we can sort of get our minds around. A million is one thousand of those high schools, a mind-picture we can't make.
Because we have a place value system that disguises a tenfold increase in each zero, even the cartoon's improvement is woefully inadequate. 1,000,000 1,000,000,000 1,000,000,000,000
Well, the numbers can be put into some perspective by the
Chinese Relativity Axiom:
No matter how Great Your Triumphs, no matter how Devastating Your Failures -- no matter that you die childless 30 seconds after reading this or live until you are 125 years of age leaving behind 250 direct descendants across 8 generations -- approximately one billion Chinese couldn't care less.
1) Government intervention in who should (or should not) get bonuses strikes me as dangerous. Nationalization is the only thing I can think of worse than bailouts.
2) What does it matter to what, or whom, the money in bailed-out firms goes? The point, I thought, was to preserve liquidity. The employees who benefit will bank the money, or buy new curtains (or whatever), and either way the nation gets the benefit of the velocity of money.
6 comments:
Cute cartoon. I am confused by such magnanimous numbers as well. But if the cartoon is intended to suggest that 165 million dollars is just a small percentage of the overall bailout money and should not cause the uproar it has, I beg to differ. The $170 billion will be used to for the indirect benefit of many more persons than the $165 million would. And while the wine/gin/daughter analogy is also clever, it is misplaced. I think a more appropriate analogy would be to posit that taxpayers will possibly end up paying $170 billion for a program to rehabilitate a system managed by alcoholic predators and some of the program funds are going to pay the costs for your daughter to attend a private party at one of their mansions. Truly, the cartoon presents a fallacious argumentum ad misericordiam.
-Cogito
Cogito, the real nature of the problem is much more the fact that the average person out there gets a "bonus" for doing good work. As such, when they hear of a company in defacto default handing out bonuses to employees they associate, in their minds, that notion that the bonuses in question are being provided as merit bonuses to people who quite apparently haven't earned such.
The real fact is that, once you get above a certain compensation level there are other bonuses which apply which have nothing to do with "merit" (at least in terms of performance), but which are designed to reward company loyalty and pay the employee in question for the extreme specialty knowledge they've developed as a result of being on the job for a long time (Example -- when you've dealt with a client for 10 years, you get to know a LOT about their wants and needs. If you go to work somewhere else, you deprive the company of that resource. So, if all your clients in question are worth millions in annual revenue, then a few hundred thousand paid out to keep you in the job is money well-spent).
This appears to be very much what the majority, if not all, those bonuses paid out represent.
As far as the cartoon, it's more Randall's way of pointing out that relevancies matter. By attempting to get people all hot and bothered over a trivial amount of money going in one direction, they're managing to distract EVERYONE -- most particularly you and I -- from what's going on with all the rest of the money. It's classic misdirection: "Ooooh, look! Fireworks!" (takes rabbit from hat, shoves it into pocket).
There's a lot more of that sort of crap that goes on, and the media utterly colludes with, than you probably realize.
Stop worrying about the 165 mill and start asking what the hell is going on with the other 99.9% of the AIG bailout money. One thing to grasp is that when the media is blowing smoke, it's usually up your a**.
Well put. Many bonuses are reasonable and often a key part of a compensation structure to create incentives. I am not worried about bonuses for merit to those who toiled away at their supervisors' direction, even if the final outcome was that their companies failed. I just don't agree that more senior employees or executives that perhaps knew about the problem, and helped perpetuate it, should be rewarded. Although the bonus percentage might be the same as for less senior staff, I just do not agree that bonuses in the order of millions to those responsible are appropriate.
Ergo, I am X% in agreement with you. “X%” equals the percentage of the bonuses that were distributed in a reasonable fashion to line staff.
I also concur that we need to keep our eye on the rest of the $170 billion. We need to prevent any similar, inappropriate use of the bailout money. Perhaps the uproar about the bonuses will help curb other abuses. At least I hope so, but I have already heard calls for regulators to "let us mind our own business!" Well . . did that work for us before? Let's not throw good money after bad (or at bad actors)!
-Cogito
I think the more general message of the cartoon is as important as the specific topic. With "trillion" having suddenly entered our vocabulary in the last year, numbers need context. Because of sound similarity and our inability to appreciate concrete individual items beyond a very small number (say, about a thousand), we quite naturally regard a billion as sort of a large million, maybe twice as big, and a trillion a sort of very big billion, maybe a triple-sized one. This underestimates their actual size so dramatically that we must always include compensating context for these numbers.
1,000 is the number of people in a good-sized high school, an example we can sort of get our minds around. A million is one thousand of those high schools, a mind-picture we can't make.
Because we have a place value system that disguises a tenfold increase in each zero, even the cartoon's improvement is woefully inadequate.
1,000,000
1,000,000,000
1,000,000,000,000
Well, the numbers can be put into some perspective by the
Chinese Relativity Axiom:
No matter how Great Your Triumphs, no matter how Devastating Your Failures -- no matter that you die childless 30 seconds after reading this or live until you are 125 years of age leaving behind 250 direct descendants across 8 generations -- approximately one billion Chinese couldn't care less.
:oP
And there's always its corrolary:
The graveyards are filled with Indispensable Men.
;-D
I agree with all of the above. Two points:
1) Government intervention in who should (or should not) get bonuses strikes me as dangerous. Nationalization is the only thing I can think of worse than bailouts.
2) What does it matter to what, or whom, the money in bailed-out firms goes? The point, I thought, was to preserve liquidity. The employees who benefit will bank the money, or buy new curtains (or whatever), and either way the nation gets the benefit of the velocity of money.
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