Thursday, September 18, 2008

It's Called a "Government Granted Monopoly," Betty...

...and it's coming to a financial market near you. This from CNN on Ike:
Tempers are running hot in Cincinnati even as hundreds of energy workers try to get the power back on, WLWT reported.

Resident Betty Ruark told the station she was "really teed off" that houses either side of her had power, but she still needed a generator just to make coffee.

"They're right here a week after you pay your bill to read your cotton-picking meter for next month," she said. "They're threatening to cut you off if you don't pay it, but could they care less that they don't got the electric on. It don't make sense, you know?"
Yes, I do know Betty, and I can't wait to pass it along to the other sectors of our economy. Check out this commentary from Nell Minow:
American International Group (AIG) replaced CEO Martin Sullivan after the company posted losses for two consecutive quarters totaling $13 billion. Sullivan's contract entitled him to about $68 million. His replacement, a board member who served as CEO for three months before the company was taken over by the government, will get as much as $7 million.

The boards of directors approved pay that was completely disconnected to performance. This, after all, is the world of the ultimate oxymoron: the "guaranteed bonus." So we should not be surprised that executives took the money and ran.
I agree wholeheartedly Nell, but fortunately the market forces these businesses out of existence. Oh, wait....

Is there a basic principle of economics that is not being raped and pillaged by policy makers right now?

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