Class warfare

Let's pretend you're an upper-level staffer in an IT company.

Over the course of a year, you take some risks that look promising. If things go well, your employer will benefit immensely. There might even be some good PR in it. There are some initial costs - but you and your colleagues are convinced it is the right course.

At first, things do not go well.

The initial expenditure is gone - and people start asking about the eventual payoff. Where is it?

They aren't interested in waiting - they don't get it. It's going to take awhile. Be patient, you say. Your colleagues back you up.

Similar opportunities open up - you take those as well. The owners aren't consulted - it would just cause problems. When you show them the payoff is bigger than you promised - they won't care.

They do notice the new outlays of cash though, and it's the same handwringing all over again. You explain until your blue in the face - it doesn't help. The PR has been bad, and its getting worse. The owners are wondering what kind of decisions you are making.

Then, the payoff gets delayed.

You meet with your colleagues and decide on a blanket statement. Things are fine. Do not panic. This will all work out.

This would work, normally. But the bad PR has really gotten out there. Lots of other companies are hurting - there's this gloom and doom mentality - and you can't get people to trust anything you say.

Then things go wrong. The payoff isn't delayed - it's not happening. You'll be lucky to break even.

The owners freak, and start saving themselves. Now it looks like your employer could go under. If the owners would just be calm this would...

Your employer needed that money to do well - and it hasn't. The owners are pulling the rug out from under you and you and your colleagues are going to be left holding the bag.

The Feds are stepping in to see what you've done. Because they want to help. You and your colleagues have been running the show - now the show is under new management- and new management has police powers.

They have some questions for you. What decisions did you make? Why did you make them?

[Pause]

So, what happens next?

[Resume]

• First, a bunch of guys show up and grab all your paperwork - take your hard drive, and begin chatting with you.  Your job is at stake. You might want an attorney. No bonus this year.
• Next, you're fired. What? You're surprised? You ran this ship aground - took big risks and didn't tell people. Nice knowing you.
• No paycheck and lots of spare time. Good thing, because your new hobby is testifying in court.

The owners and your employer are fighting over who gets to sue you first.

You remember how this all got started and think: Ain't that a bitch?

[Pause]

Let's change gears a bit.

[Rewind]

Now lets re-do that scenario and pretend you are a chief executive at Freddie Mac. What's the endgame look like now?

As before, the Fed shows up - and agrees to shore up your employer's finances....

[Resume]

• The Fed has questions about your decisions - you don't answer.
• They want to see your books? You say no.
• You keep your papers, keep managing your books the same way you've always done.
• Hell, you keep your job.
• Your salary is unaffected - you get all your bonuses, keep your golden parachute.

No litigation as far as the eye can see. The Fed's got your back.

You look back on the past year and think: Ain't that something?