MAXIMIZING PROFITS CAN BE DANGEROUS

Sometimes maximizing current profits causes your company to have no future.

An easy example of this is making shoddy products. You make a neato* thingie** that looks like it works well, but does not actually work at all. Initially, you sell LOTS of neato thingies. But no one ever buys a second thingie. Eventually, you go out of business.

Another example is when a company does not appear to care about its customers and/or suppliers. As soon as alternatives become available, customers and suppliers go somewhere else.

Sometimes, maximizing profits can put the entire world at risk. One person, in charge of the home mortgage security insurance division at AIG, put the entire world wide economy at risk, when he continued to OK insurance on mortgage loans securities WAY past what AIG could cover if lots of people decided to not pay their expensive mortgages. (Which predictably happened when house prices went down instead of up.)

Our current tax and accounting rules ENCOURAGE THIS KIND OF RISKY BEHAVIOR, as corporations are judged almost entirely on their quarterly earnings.

We can fix this by instituting a short term capitol gain tax of at least 40%. Then we could slowly lower this tax yearly until there is no capitol gains tax after 20 years. This would encourage long term thinking.

We could also modify the accounting rule that requires expensing stock options at the time the options are granted. We could allow a company to NOT expense stock options if:
     1. The option vests within one year.
     2. The options are evenly distributed within the company based on RANK rather than salary.

This will eliminate the bullying behavior that is meted out to young people in order that their manager can give himself all the stock options.

We should NOT allow upper management to get any more than 20% of the stock options granted. Stock options are a fabulous way to get the workers to work together to make the company the best that it can be. Then EVERYBODY makes more money.

Those companies who encourage people to work long hours in order to prove their "street cred"*** are destroying the lives of young people, who need to learn that work is only one aspect of life. Even work you LOVE, is not worth giving up time with family and hobbies.

WE CAN, AND SHOULD, FIX THIS NOW!

* Neato, is slang for something that appears to be something that you would want to own, because it is unusual.

** Thingie, is slang for an object that you do not want to bother to describe or name correctly.

*** Street cred is short for street credit. It usually means that you are respected as a member of your profession in that you can actually solve real problems or do respected art.