An Ethiopian Blogger’s View: Is Greed Good Or Bad?

Is greed acceptable? Why is that humans are so greedy? Why is the Western society so greedy and increasingly getting very corrupt? Even after many years of living in West, I find it very hard to understand.

I grew up in Ethiopia, where the culture is that of communal, not individual. As such, Ethiopians don’t boast around their individual accomplishments as same caliber person in the West would. This is nothing to do with being shy or lack of confidence, rather it is the cultural up bringing.

The financial crises that started in 2007, continuing right till now, probably is a blessing in disguise in the sense that we all must learn to live with in our means, appreciate what we have, don’t take our life for granted, and learn to save our legally earned money.

Greed and Related Industries

To some degree, greed is good. There are businesses that need greedy people to survive. Just have a look, around you all the luxury items, like: houses worth 10 million plus, diamonds worth 2 million plus, cars worth half a million, just to mention a few. If there were no demands for such luxury items, (hence greed) many employed in these industries will be out of jobs, governments will also lose taxes payable.

Therefore, it is safe to say that greed is good to some degree. Aside from people fleeing from persecution, it is because of greed that people have chosen to move to the West, in search of a better life. Again, greed in its good form.

Please note that I am saying that greed is good at all times! Greed should be balanced with reality. I have no problem when people earn their money ethically (whether a penny or a Billion dollars) and spend it as they wish, again balanced spending. My problem is when one tries to get ahead illegally.

So far, the West portrayed that corruption and greed as only taking place in poor continents, like Africa, Asia and Latin America. But, is this really true? Not at all. Corruption and greed exist all around the world, no matter which country. The sophosticated Western crooks were able to get away with their corruption so far – that is what differentiates the crooks from West from the crooks in poor countries around the world.

As you will read further down on this post, at the Forbes.com list of top 10 outrageous CEO’s, it is very much offending to see how one CEO gets $73 million in 2007 and $25 million in 2008, when his company filed for bankruptcy and needed to be bailed out. Does one person really need to be paid such compensation? Would the company go bust if this $73 million guy was replaced by a $1 million guy? Probably not – perhaps, the company would have saved $72 million!

Mr. Ponzi
Las year, Bernard Madoff raised the bar for corporate malfeasance to an all-time high when he was arrested on charges of orchestrating a US$50 billion Ponzi scheme. Unsurprisingly, nobody managed to top Madoff’s crimes in 2009, but 10 executives showed enough greed, hubris and chutzpah to altogether give him a run for his (stolen) money.

Where is Bernard Madoff today? Well, he is serving 150 years in jail. Look how many people, including non-profit organizations he hurt? We all come from dust and we return to dust; we can live in one house at a time, not two; we can eat perhaps, 3 or 4 times a day, no more; we share the same road whether we drive a $500 dollar car or a $500,000 dollar car. All our material possessions will not be buried with us when we expire.

Helen Coster at Forbes.com has compiled the biggest CEO outrages of the year 2009:

10/ Robert Moran
In November a federal court sentenced Robert Moran, a UBS private banking client who is also the chief executive of Moran Yacht & Ship, to a two-month prison sentence for tax fraud. Moran’s case came out of a larger government investigation into wealthy Americans who have used UBS to hide their money offshore and avoid U.S. taxes. Moran had pleaded guilty in April to filing a false tax return, and had admitted to concealing more than US$3 million in a secret UBS account. He finishes at No. 10 on our list.

9/ David Rubin
While Moran was busy rigging his yachts, David Rubin (No. 9) was busy rigging auctions, according to the Department of Justice. In October, prosecutors indicted Rubin, the chief executive of CDR Financial Products, a municipal bond brokerage, on conspiracy and fraud charges. According to the indictment, Rubin’s firm rigged auctions that help determine which banks get the lucrative business of assisting governments in raising money. The prosecutors contend that participating banks kicked a portion of their profits back to Rubin, who denies the allegations. Like everyone on this list who has been indicted but not yet found guilty, he of course must be presumed innocent until proven guilty. But also like all the rest, he has gotten himself into a heap of ugly trouble in any event.

8/ R. Allen Stanford
R. Allen Stanford (No. 8), the cricket-loving Texan who was, according to Forbes, a billionaire until this year, scored high in chutzpah in 2009. He and his co-defendants allegedly sold $7 billion worth of certificates of deposit through his Stanford International Bank and misappropriated most of the money, diverting more than US$1.6 billion in undisclosed loans to him personally. According to his indictment, he got by with a little help from his friends—in particular the chief executive of the Financial Services Regulatory Commission of the island nation Antigua and Barbuda, Leroy King. The Securities and Exchange Commission claims that in return for $100,000 from Stanford, King kept Stanford abreast of SEC inquiries into his dealings. Stanford has pleaded not guilty. If convicted, he faces up to 250 years in jail.

7/ Danny Pang
Pity the mostly Asian investors who let Danny Pang (No. 7), the founder and former chief executive of Private Equity Management Group, manage their money. In April the SEC accused him of running a Ponzi scheme that defrauded his investors of hundreds of millions of dollars. Pang died in September at age 42, before he could stand trial. A coroner’s report expected by January is expected to say whether he committed suicide.

6/ Raj Rajaratnam
In October the SEC charged Raj Rajaratnam, founder of the hedge fund Galleon Group, along with executives from Intel, International Business Machines and McKinsey, with insider trading. The government relied on wiretaps to show how Rajaratnam (No. 3) allegedly used private information to help boost the returns at his US$3.7 billion hedge fund. He allegedly made more than US$33 million in illicit profits; he strenuously denies the charges and is out on bail awaiting trial.

5/ Thomas Petters
Two businessmen displayed especially vivid imagination in their extremely dubious activities. In Minnesota, Thomas Petters (No. 5) went on trial in October for allegedly orchestrating a US$3.5 billion fraud. Federal prosecutors accused him of promising rich returns to investors who lent him money to buy flat-screen TVs and other excess goods from troubled retailers for resale to companies like Sam’s Club. The only problem: Petters had allegedly cooked up fake purchase orders and invoices to hide the fact that those surplus goods never existed. Prosecutors claim that he used new investor money to pay off old debts—the old pyramid scheme technique—and used the profits to fund his extravagant lifestyle. As we go to press the case is before the jury.

4/ B. Ramalinga Raju
Thousands of miles away, B. Ramalinga Raju (No. 4) was living in his own fantasy world. The founder of the Indian outsourcing company Satyam Computer Services, he confessed in January to overstating Satyam’s profits over several years and creating a fictitious cash balance of more than US$1 billion. He invented more than 10,000 fictitious employees to help him steal money from the company, and he used his mother’s name to buy land with the proceeds. He confessed, but has yet to face charges in court.

3/ Edward M. Liddy
The uproar over Wall Street bonuses this year earned two prominent executives places on our list. Edward M. Liddy (No. 3), who began running America International Group last September, faced a nationwide firestorm when it emerged that executives in his firm’s financial products division, who bore considerable responsibility for the insurance giant’s near collapse, were being rewarded for their disastrous results with US$165 million in retention bonuses. The retention packages had been put in place before Liddy joined the firm last year and were tied to 2007 pay levels, so they weren’t affected by the firm’s more recent losses. Liddy insisted that though the bonuses were “distasteful,” AIG was legally obligated to honor its employment contracts. Many across the nation disagreed—and took it personally, since the company had received almost US$200 billion in federal bailout funds courtesy of the American taxpayer.

2/ John Thain
John Thain, then the chief executive of Merrill Lynch, pushed through US$3.62 billion in bonuses for his executives last December, rather than waiting until January as usual, just as the company was being taken over by Bank of America. Then in January, Bank of America revealed that Merrill had lost US$15.3 billion in the fourth quarter of 2008. That bonus push just made Thain’s ill-starred captaincy of Merrill, which had begun with his million-dollar renovation of his office a year before, look even worse than before. Less than a week later Kenneth Lewis, the CEO of Bank of America, forced Thain out of his job.

1/ Lloyd Blankfein
And last but not least: the divine Lloyd Blankfein (No. 1), chairman and chief executive officer of Goldman Sachs. Despite bearing scant resemblance to, say, Mother Theresa, the Pope or the Dalai Lama, Blankfein told the Sunday Times of London in November that he was just a banker doing “God’s work.” He later said he meant it as a joke, but he certainly pays himself as if he were accomplishing something greater than human: In 2007 he made US$73 million, according to Forbes, and only $25 million in 2008, as the economy tanked, but look for a recovery in his compensation this year as Goldman Sachs has recovered far ahead of the economy as a whole. In honor of the modesty of his pronouncement, we lift him to the celestial height of No. 1 on our list of CEO outrages of 2009.

So, do you agree with my post? Is greed acceptable to you to some degree? Do you agree with me now that greed and corruption really happens in the West rather than in poorer countries? Have your say in the comment field below.

Check out the slides of these greedy CEOs:
In Pictures: The Most Outrageous CEOs Of 2009

Highest-Paid CEOs For 2008: AP’s Top 10 List:
Highest-Paid CEOs For 2008: AP’s Top 10 List

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My next blog entry will be on Thursday December 17, 2009.

Mullkam Samint!