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Is The Concept of Team Play Dying Along With the Economy?

By Stacie Clifford Kitts, CPA

Throughout my years in the business community, I have heard of employees getting fired because he or she was not a “team player.” The underlying issues varied from self promotion which damaged the company to a general disregard for the job.

For whatever reason, employees who are not team players, do not have the company’s best interest in the forefront of their activities. In contrast, company’s who are successful in promoting team play, or a common attitude regarding the goals of the company, often see higher performing employees and as a consequence a bigger bottom line.

But has the notion of team play fallen away with our current economic crisis?

That seems to be the case at American International Group or better known as “AIG”. Today the New York Times reported that the company will pay out over 165 million dollars in bonuses to executives who work in the company’s financial products unit. The same division of the company that generated record losses and was the driving force behind the government bailout. Despite the objection of treasury secretary Geithner and other lawmakers, the payments will go forward because the company is contractually obligated to pay.

But with all this talk about the company’s obligation to pay, who is asking if the exec’s are obligated to take it? The fact that the company is going through with these bonuses suggests to a reasonable person that the executives are pushing for them.

Although it may be in the best interest of the executive, it certainly is not in the best interest of the company. And it certainly is not in the best interest of the taxpayers who are financing these bonuses for the same people who caused the problem in the first place.

I have to admit, I think this sticks.

In this particular case, the exec’s at AIG who are forcing the company to honor their contracts despite the economic instability of the organization certainly don’t come off as team players. But maybe that explains the company’s current predicament . Company Executive + greed – team player = government bailout

Too bad we can’t ask them to wear sandwich boards that say “I am an executive at AIG and I’m not a team player”. Yes I know that won’t solve anything, but it would make me feel a tiny bit better.

Has Properly Paying My Income Tax Prevented Me From Getting A Job In the Obama Administration?

By Stacie Clifford Kitts, CPA

Nancy Killefer today withdrew her nomination to become Chief Performance Officer, a new post in the Obama administration stating unspecified tax problems.
But, I’m not surprised.

Failure to properly calculate and pay income tax appears to be a job requirement of the Obama administration. In addition to Nancy, Timothy Geithner, Treasury Secretary paid $43,000 in back taxes and interest claiming that he accidentally forgot to the pay the proper amount of payroll taxes on his self-employment income. And, Tom Daschle, the former Senator Majority Leader and nominee for secretary of health recently paid more than $100,000 to the IRS for back taxes and interest related to the use of a car and driver lent to him by a wealthy Democratic friend.

Although I am not surprised, it does make me wonder who is preparing these tax returns. Just who are our lawmakers relying on to advise them as to the proper application of the laws that they themselves created. Mind boggling.

Okay, in defense of the accountants, I understand that some tax laws can be hard to understand. And I don’t expect everyone to know the intricacies of every rule, or even the complete intricacies of their clients lives, but come on. Self employment taxes? Screwing that up is the equivalent of not being able to add 2 + 2. Which equals 4 by the way if Mr. Geithner happens to stumble onto this blog.

Although it appears that Mr. Geithner tried to blame Turbo Tax, the tax preparation software he used for the mistake on his self prepared tax return, Turbo Tax has insisted that the problem is not with their software. Good try though Timmy.

Well, that’s it, I guess I finally know why I haven’t been nominated to any posts in the Obama administration. I don’t have the right qualifications. That is, I have been properly calculating and paying my income tax.

But I would like to take this opportunity to officially offer my services to the Obama administration and to any other lawmaker who would like to step it up and file his or her tax returns properly.

Fannie Mae – Duh Factor

By Stacie Clifford Kitts, CPA
I’m confused about why Dan Mudd CEO of Fannie Mae isn’t in jail. After all – it appears that he has been breaking the law since October.

The – oh my gosh – 700 billion dollar – Emergency Economic Stabilization Act – the bailout bill – which passed in October requires Fannie Mae, and other government associated organizations including Freddie Mac, to allow tenants residing in foreclosed properties who continued to pay their rent and who have a valid lease to remain in their homes – “where permissible.” However, despite this requirement Fannie Mae has continued to evict tenants who are paying their rent and who have valid leases.

CNNMoney.com reported that Fannie Mae will implement a policy in January 2009 which will finally comply with the requirements of the Act. This announcement followed New Haven Legal Assistance Associations accusation that the company was not allowing renters in good standing to stay in foreclosed properties.

Um – maybe it’s me, but if Fannie Mae is not abiding by the law, then isn’t the company breaking the law? Has our government gone completely wacky? Why aren’t I reading about some sort of an inquiry or something?

Doesn’t the whole thing make you wonder just how incompetent one must be to screw up the requirements of a multibillion dollar handout? I mean come on ….do you think that if someone handed you a million dollar check with a list of rules to follow, that you would take a minute to read them over and then to follow them.


John Thain CEO – Duh Factor

By Stacie Clifford Kitts, CPA
The wall street Journal reported today that John Thain CEO of Merrill Lynch asked for a 10 million dollar bonus from his struggling employer citing his ability to keep Merrill’s losses under 12 billion dollars – Wow good job – and for the work he did arranging the merger between Merrill and Bank of America.
Mr. Thain wins today’s Duh factor award for withdrawing his request once the Wall Street Journal made it public.
But really, what’s a few million more or less when we’re talking about billions.
The request isn’t so unbelievable is it? After all, the loss could have been worse and he did arrange the sale to Bank of America.

But, on the other hand, the company is struggling and people are losing their jobs.

So I guess the moral here is: if you want a 10 million dollar bonus, you should probably go to work for a company that isn’t loosing its a-s.

Otherwise you’re going to have to settle for what’s available – which in this case is nothing.

In this economic environment, its probably enough to just have a job. I’ve got a feeling that many Merrill employees aren’t going to be so lucky.

Bail-Out Duh Factor

By Stacie Clifford Kitts, CPA

With the constant chatter about the big three auto makers financial bail-out , I find myself getting more ticked off with each whiny – save me from my excess – sorry I ran the company into the ground –palm up hand out – shoved in the face of the American public – it has me asking – are we living in a Democracy or what? Cause I’m not sure anymore.

Honestly, I’ve been reluctant to write something about this topic simply because I felt that I needed to research the facts in more detail. Like: Who are these company leaders? Where did they come from? What mistakes have they made? How is the economy being affected? What will happen if our lawmakers don’t bail these guys out? What will happen if they do?

But then I thought- what the heck, there is a huge DUH factor here and I don’t need to do a bunch of research to identify it.

Here are some pretty obvious “Duh’s”.

Duh factor 1. If your company is in trouble, do ya think it’s a good idea to carry on the excessive lavishness that you engaged in prior to the trouble?

Hello, private jet for safety purposes. Pul-eez .

Here’s a thought, why not spend some time in a TSA screening line and then decide whether commercial airline flight is safe enough for ya. I’m willing to bet that it is.

Duh factor 2. Nobody, and I mean nobody’s performance is worth a multi-million dollar pay check when their company is asking for government handouts.

And if you are going to make the argument that good performance should be rewarded, then it follows that poor performance should be punished.

After all, if these executives are going to claim the glory when things are going well and demand multi-million dollar salaries, then shouldn’t they also own the blame when things go awry?

Duh factor 3. As a tax payer, it ticks me off that these same exec’s who ran their company’s into the ground will keep their jobs and get to decide what happens to my hard earned tax dollars if this bail-out is approved.

As a mother, I have learned that you don’t reward bad behavior. And why is that? Because rewarding bad behavior and protecting people from their poor choices just perpetuates the behavior.

If we’re going to bail out these companies, then our lawmakers should not allow these same company exec’s who made poor choices in the past the privilege of spending my money.

As a matter of fact, if the big three exec’s had any balls at all, they would admit defeat; give their prior salaries back to the company and just go away.

Duh factor 4. Here’s another thought, why don’t we take that 50 billion dollars – give or take – and spread it among some successful well run businesses.

You know – reward the good behavior and help out some companies that are doing – oh… I don’t know – a good job. Then those healthy companies can grow and create jobs and stimulate the economy instead of maintaining a few sick losers.

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