American Capitalism

Last night I saw an old archived Frontline program that highlighted the 2008-2009 financial meltdown.  And it got me thinking - about the American brand of capitalism.  I have always said - the American brand of capitalism is like the Iranian brand of democracy.  Both are very similar - Iran has a democracy where people vote for their president, but only candidates whetted by the theocracy can be on the ballot.  When I think of capitalism, I think of the board representing the owners of the company and supervising the employees of the company (which includes the CEO and all the executives).  However, in our version of capitalism, the board of a company is selected by the management - and the CEO, who is an employee of the company, sits on the board and represents the owners.  This would make sense if the CEO has a large ownership stake and ran in a 'true' election.  Which brings me to my main point - why are board of management positions open to any shareholder?  If this was true capitalism, any shareholder (even individuals who have only 1 share) would be eligible to run as board members.  All elected board members would be answerable to the share holders - and would look out for the shareholders.  No more crooked sweet deals for CEOs (see Ray Irani).  No more outlandish pay packages for CEOs.

This brings me to my pet peeve about American capitalism.  Why is it that executives have a separate bonus structure than other employees.  Remember, all executives are employees and should be treated as such.  If they executives are so good at what they do, why don't they fire all the employees and do all the work themselves. And if they cannot do that, then the board should have a uniform bonus structure for all employees (say everyone get 10% - or whatever number is deemed appropriate - of their salary as an annual bonus).  And why is it that a CEO's compensation package contains more than just dollars.  The argument that I have heard is that CEOs take a huge risk and should be compensated for taking that risk.  Hence, they are paid using company stock.  Hah!  Why doesn't the board offer this 'risky' package to all employees?  I for one, would love to have this 'risky' compensation package.  I can almost guarantee that I will come out ahead.  Also, I would end up paying much less in taxes since I would cash most of my stock gains as capital gains.  So, here are my simple rules for how all employees of a company should be paid:

• All compensation should be pure cash (no stock or options or other fancy instruments)
• The salary of no employee in the US (this includes all executives at all companies) should be more than that of the President of the US.
• All other compensation should be as a bonus.
• The bonus structure should be uniform for all employees (one flat bonus % for all employees)
• For all public companies, the bonus structure should be tied to the finances of the company.  But all payments should be in cash.
• And finally, bonuses should be paid out over 5 years.

I believe that if some, if not all, of these changes were put in to effect, our capitalism would be more robust, more individuals would be aligned to its success and more individuals would benefit from the fruits of their labor (which is the primary goal of capitalism).

What do you think?  As always, I would love to hear from you.

The Mushroom Cloud argument

It was wrong the first time and is still wrong the second time. The Mushroom Cloud Argument. We all remember the argument made by the Bush administration and the Iraq war supporters. It was the president himself who said to an audience in Ohio "Knowing these realities, America must not ignore the threat gathering against us. Facing clear evidence of peril, we cannot wait for the final proof -- the smoking gun -- that could come in the form of a mushroom cloud." Well, now we know better. The main argument for going to Iraq has been shredded by the truth. Iraq and Saddam did not have Weapons of Mass Destruction when we attacked them. The premise to go to send our brave soldiers to Iraq was based on a false fear.

Now, these same Iraq war supporters are dragging out the the Mushroom Cloud Argument. Now, it is being cloaked as the Mass Destruction Argument. First it was - If we don't go, there were be Mass Destruction. Now it is - If we leave now, there will be Mass Destruction. Iraq will become a haven for terrorists, they will bring the fight to us in the US, we will have to fight them here etc. etc. Baloney! This time around, I want to listen to those folks who said that going into Iraq was a mistake. They were the ones who got it right the first time. They are the ones who will most likely get it right now.

Let us start with some things that we can all agree on:
1. Iraq is not a failed state such as Afghanistan & Somalia.
2. The people of Iraq don't want a haven for terrorists on their homeland.
3. The average Iraqi wants to be safe in his house, on his street and in his city. He frankly doesn't care too much about the jihadi message of war with the US.

Iraq was a small problem for the US before Bush sent our soldiers there. It was contained and we were squeezing the hell out of them. Now, it is a big problem for the US. Our soldiers are dying their. Our money is being spent there. And the countries that are at odds with us are using this quagmire to their advantage (e.g. Iran, North Korea).

Here is my solution - leave now! Turn over the security of Iraq to the Iraqi government. Each and every soldier in Iraq should instead fight the War on Terror (the real one) that is going on in Afghanistan. Let us find the guys who were responsible for 9/11 and destroy them.

And that, Mr. President, is what American wants you to do. Do you have the courage?

My first post!!

This is a big day for me!! After dithering for a long time, I finally have a blog. Imagine? I had been thinking of writing a blog for a long time. As I read the newspapers and the magazines; as I listen to NPR and watch CNN, MSNBC and Fox; I realized that I had an opinion that differed from what I was reading, listening and watching. So, here are my two-cents.

My hope is that this blog will open my mind to new ideas and opinions. I also hope to interact with others who share some of my views and differ on others. And I hope to have a conversation where we are constantly seeking the truth. As they say - The Truth Will Set You Free. That is my hope and desire as I embark on this journey.

As you might guess from my name, I am from India. I spent the first 24 years of my life there and have a deep affinity for that country. Now, that I have made the US as my home, my first loyalty is to my new home. Well, today I came across an wonderful piece by Cait Murphy from Fortune titled "India the superpower? Think again" that lays out the truth. Like any piece of journalism, this has some facts and some opinion. I am sure that we can argue a lot on the opinion and some on the facts, but by and large, I think that this is a very truthful piece. Let me know what you think.

Let us start a conversation where we can disagree without being disagreeable, where the focus is on facing truth even when it proves us wrong and makes us uncomfortable. Thanks for your time and your views. And thanks for helping me grow.