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The arrogance of failure

By Henry Lamb
web posted July 25, 2011

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What would you do, were you to discover that the CEO of the corporation in which your entire life savings were invested, borrowed a sum of money greater than the firms' total annual revenue, and you discovered that every year, the firm was spending 44-percent more than its revenue?

Then, you discover that this condition has persisted for nearly three years, since the CEO was hired.

Then the CEO calls a special shareholder's meeting to complain that the board of directors will not allow him to borrow more money, and to inform you that the firm will not be able to pay dividends, nor will it  even be able to pay it employees unless the board's borrowing limit is reversed and more money is borrowed.

As a shareholder, you are allowed to ask: "If we are already spending more money than we are taking in, how will you repay the money that you are borrowing?"

The CEO replies: "We will borrow enough to send all our customers a check which they can use to buy our merchandise.  That will increase our revenue so we can make our interest payments and repay our loans."

Another shareholder asks: "Why don't you cut back on your spending so that you are spending less than you are taking in." 

The CEO replies:  "I'd love to reduce spending, but that would mean the people to whom we are now sending checks would no longer be able to buy our products and that would reduce our revenue.  What we really need is to raise the prices on our goods that are bought by millionaires and billionaires.

The CEO continues:  "This board of directors you have chosen has fought with me since they were elected, doing everything they can to make you think they are looking after your interests.  What they are doing is looking to be re-elected,  and they are destroying the firm in the process.  You must override the board of directors and borrow enough money to meet our obligations and to invest in new products and new employees.  Without borrowing more money. we cannot meet our obligations and our firm will lose its credit rating and will not be able to borrow.  You will lose everything you have invested in this firm."

 If the CEO of the corporation in which your money was invested presented an argument even close to this scenario, and you did anything other than fire him, then you would deserve to lose your investment.

The CEO America hired nearly three years ago has presented arguments for raising the debt ceiling that make the above scenario look brilliant.  Moreover, he has deliberately lied to the shareholders by telling them that he could not guarantee that social security checks could be delivered, because he did not know whether there would be enough money in the coffers.

What a load of unmitigated crap!  What kind of CEO doesn't know how much money is in the bank?  An incompetent failure is the only accurate answer.  What kind of CEO would deliberately continue spending 44-percent more than the incoming revenue - for nearly three years?  An incompetent failure is an accurate description.  What kind of CEO tries to blame his board of directors for his own incompetence? "Incompetent failure" is the most appropriate description of such a CEF (Chief Executive Failure).

The CEF America hired nearly three years ago has demonstrated his incompetence not only through his handling of the economy, but in his direction of foreign policy as well.  America's strongest ally, Israel, the only democratic government in the Middle East, holds an approval rating for America's CEF that hovers in the 6-percent range, and continues to fall.

America's CEF completely ignored the Constitution and the War Powers Act when he invaded Libya to protect Libya's citizens from that nation's leader.  He told the nation's shareholders (Americans) that the action was justified and that it was for a matter of days, not weeks.  That was nearly six months ago, and the invasion continues.

The leader of Syria has been killing his citizens even more aggressively than Libya's leader, but the CEF is not interested in protecting Syrian citizens.  What kind of executive demonstrates such inconsistent logic?  A Chief Executive Failure is the only appropriate answer. 

What would you do were you to discover that the CEO of the country in which you've invested your life and the future of your children turned out to be a CEF? 

A nation would get exactly what it deserves were it to allow an incompetent executive to continue to spend beyond the nation's means, while blaming others, and to continue to offend our allies abroad, and to selectively invade foreign nations in violation of the Constitution and existing law.

America's shareholders deserve a better performance than the current CEF has produced. ESR

Henry Lamb is the author of "The Rise of Global Governance,"  Chairman of Sovereignty International , and founder of the Environmental Conservation Organization (ECO) and Freedom21, Inc.

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