China Takes Delivery of Its 2,000th Boeing Aircraft

The Points Guy ^ | 12/01/18 | J. Scott Clark

[spetznaz]

Exactly. They are absolutely willing to do that, and it is one of the best examples of moral hazard around. If they focus on the short term, they will have great quarters (in the short term) and will receive attractive bonuses. When it is time to pay the piper, the worst that will happen is either (I) it will be far enough in the future that they will no longer be at the company, or (II) they are told to leave (and get to keep their bonuses plus receive an attractive golden parachute).

Sure, there are some C-suite staff who look at the overall health of the company, but they’re not many. Why? Not because they are greedy (although most are), but partly because of survival. Take the credit crisis ten years ago ...if a CEO of a major bank was not feeding at the trough of bad mortgages 12-13 years ago, he/she would have been FIRED for not posting the great returns that other banks were showing. Yes - partaking in NINJA loans, crazy CDOs and even crazier CDS’ would eventually result in hell 2 years later, any companies like AIG, Lehman and Countrywide paid the piper in full ...but if they had not participated in the madness two or three years later (actually, even before say from 2002 even) they would have been fired.

Same thing for Boeing. If the CEO decided he did not want to sell to China, Airbus would fill the orders. And his own shareholders would demand for his head when his numbers lagged behind Airbus’.

It’s a devilish bargain. Win now, and lose in the future. Or lose now, get replaced with someone more willing to win now, and still lose in the future.

Some of the decisions made are due to greed. Many even. However, a good number of them are due to game theory. It’s a devilish bargain, and many FReepers who as CEOs would have ‘done good for the company and country’ would have not lasted six quarters. Sad, but true.

[spetznaz]

Some spelling and other mistakes in my post. Mea culpa.