Why we hand bankers the reigns
Yesterday we talked about the different economic type classes that run society and how they change over the years. According to the scholar who came up with this, the United States has been in an Acquisitor Era since the founding of the country. That's a long time, and it's no wonder so many Americans believe the only right way to run our society is by letting those lead who are monetary experts.
So we have been approving of super-large compensation for bankers, CEOs, and others who drive the economy. But it's because we hold onto a theory that acquisition is the only way for our society to thrive, hence, it's important to keep the talent that know how to acquire. Maybe it's a theory. Maybe it's a myth. It would be unnerving to make the change and find out (but I'm willing).
Today I read that the CEO of Canada's largest insurance company, Manulife, got a $25 million dollar comp package. Half came for doing an outstanding job last year, and half for staying the five months from now until his retirement. Manulife must have done awesome. Let's check. Manulife lost 1.9 billion dollars last quarter. Yup, that's billion, and that's quarter. The stock lost 70% last year. Granted, stocks in the financial sector have done poorly and tend to move in tandem but still . . . dogs.
The shareholders launched an appeal. But, DE-NIED!
High ranking executives have always been obscenely paid. Now that time are bad we can see just what these executives may have always been thinking: did they pay themselves well for good performance? Or were because they believed what they did was just so darn important that win or lose, they deserved a lot of money just for being there.
A footnote, the CEO agreed to convert $10 million of that money into company stock. A fine sacrifice.
Dr. Ravi Batra, author, and Professor of Economics at SMU wrote a book in the eighties called The Great Depression of 1990. People must have been scoffing at it during the go-go nineties, but a lot of Batra's predictions are now coming true. He was just off by 17 years.
The book is an interesting read for its "backyard" style chats about how a capitalist economy works. But it also talks about social classes through history and how this "great depression" could move us into a new class age. His theory is borrowed from another scholar and, in a nutshell, goes like this:
People fall into one of four social classes depending on their particular strength. Every class has it's day, or, it's Era. The Laborer Era is run by people who shun authority and have no need for high ambitions. Batra cites prehistoric man; I picture a hippy commune. But not everyone feels that way and the desire many have for a more managed community opens the door to . . .
. . . The Warrior Era. This age is run by armies and royalty who exercise absolute power. It's the age of Xena, Pharohs and Kings. Eventually the domination becomes onerous and the disorder caused by constant war leads to . . .
. . . The Era of Intellectuals. The time when religious leaders take over, and no, that's not an oxymoron. Eventually the religious leaders become too manipulative and turn away from spiritual truths for ego and power. The masses see through them and start to demand rights for individuals. And so you get . . .
. . . The Era of the Acquisitors. Society is now run by those who know how to get rich: bankers, merchants, landlords, ball players. Sound familiar? It's where we are now, and before you think you're living in the good times, it has its problems like all the others. The credo of individual rights get misused to keep the rich, rich. All things become commercialized. And rich does not necessarily = moral, yet the rich rule.
Eventually, the gap between rich and poor becomes too great. The people rebel, and the next Era begins. Is that where we're heading now?
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