Tuesday, November 10, 2009

Dodd"s $50,000 Bribe for SEC Employees

Senator Chris Dodd admitted Securities & Exchange Commission employees have such sorry jobs, they need incentives to do quality work. Workers could get $50,000 bonuses for snitching on each other, by offering "suggestions or allegations with extraordinary merit."

How long will it take for SEC employees to game the system, optimizing their pay at the expense of the organization? Might it look like?

"I'll sit on this, until you turn it in."

" You hold that and I'll submit it."

"$100,000 payday, baby!"

This is a long history of incentives distorting behavior. Nearly 30% of corporate executives cheated on stock option compensation. The SEC went ultra light on offenders, especially the politically connected. Recall Wall Street's billions in bonuses drove investment quality to zero. One former CEO slammed the 1970's bonus culture for creating "spoiled and ungrateful schmucks."

Surely, SEC lawyers are as smart as CEO's and will game Dodd's incentives to their favor. Chris Dodd is the latest fractal in America's abysmal leadership. Will they ever learn?

Senator Chris Dodd is but the latest briber. He's a White House follower. President Obama wants to manipulate teachers, doctors and nurses.
"If you want people to do a good job, give them a good job to do."--Dr. W.Edwards Deming
In my career as a hospital administrator, the worst leaders did two things. One, they relied almost exclusively on money schemes to motivate employees. Two, they contracted out most departments to a third party.

The federal government abdicates its leadership responsibilities in similar fashion.

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