Apr

4

 The main attribute for a successful CEO these days is to be a good beggar. The good beggar has to pretend that without the alms, he would be totally helpless. Also that he previously did very good work.

The big CEO's who clustered around the treasury and were able to beg trillions from the fed and the treasury to ward off bankruptcy in those days were masters at this. The training in beggary was not limited to the US CEO's who brought up the terrible calamity of the Reserve fund breaking the buck (with the potential unrealized loss of 100 million the holders of their 5 billion). But the Europeans were even bigger borrowers than the US banks and companies. The ability to pledge about a trillion of worthless assets to the Fed to get loans when they were on the ropes is something that will have repercussion undreamed of and unintended for many generations. Mainly it reduces incentives, and makes you want to throw in the towel.

The training for CEO's these days should be a course in how to beg. I'm told you have to pretend to be productive, willing to work, and well dressed. Presumably having been previously employed by the alms giver or having a job for him or his family in the future is also helpful (the palindrome always told me that whenever he went to Washington the first thing that the operatives wanted to know was whether their son made a good impression when he applied for a job). A reading of Bertold Brecht and listening to Kurt Weil in the Three Penny Opera would be recommended. A trip to India with a required visit to the museum of Thuggery, to study their methods would also be in order.

Wouldn't this be better than the required courses at the HBS that now displace so much more fruitful learning in how to beg that the most successful CEO's should take.

How could this all be quantified, and what profit making opportunities are suggested by this?

T. Humbert writes:

The above echoes some parallels about how the revenue model of the Church operates. In such, the pastor acts a "collector" of sorts, though his methodology of addressing (read: creating) accounts receivable is a little more subtle than that of the traditional practitioners of that old-world craft.

Rather than the overhand rights and nastily-swung bats of the rough-and-tumble boys, the most effective of the Roman collar guys eloquently whack one senseless if otherwise unscathed with the moral imperative thing to best ensure compliance with donation terms.

And always when others are around so as maximize peer pressure leverage of a most compelling nature.

P.S. I'm on an Amtrak tonight slowly rolling from NY to San Francisco. I don't mind flying at all, but I love trains. How it costs 3x more than a jet ride that could get one there in a tiny fraction of the time I have no idea….Oh, that's right, the government runs the trains…Silly me. 

Tim Hesselsweet writes: 

Different tax rates for different companies/industries and the nature of the provision/loophole that influenced it.

Subsidies for agriculture

Energy subsidies: see this link for 1995 article 

Tax write-offs that support tech

Financial bailouts (overt payments + benefits to front-running fixed income in tarp etc.) + is there a cost of capital advantage to being to big to fail in public markets

I doubt there's much regulation of consumer related business, but there is for financial, energy, defense, health care. Quant measure would be federal agencies overseeing industry, the more oversight the more big cap favored over small cap.

Knowledge of legislation and tax treatment best. Tax rate is one proxy for legislative advantage but that doesn't account for subsidy or other measures that create unequal playing field.


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