The top 1% is not a stable group.....

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141

<p>“But do you really think you should be making this decision for all those with a lot of money?”</p>

<p>Yes, indeed. That’s what democracy is. We create the opportunity and provide the resources upon which fortunes are made, in return for deciding what degree of inequality makes sense before the bonds of community that make democracy possible are shattered.</p>

<p>As I’ve said, I have no problem with wealth accumulation (other than an ecological one). I subscribe to Rawls, though - a society is just if, under a change of circumstances, the richest person in the society would feel s/he had been treated justly if occupying the position of the lowest.</p>

<p>No man is an island.</p>

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<p>Why do I care about executive pay? Because an unjust society is not a stable society. There will always be gaps between the very top and the very bottom. However, where there is a huge disparity between the very top and the middle class, society is not sustainable over time. I have an interest, for myself and my children, in living in a safe and stable society. </p>

<p>The trend I see developing is 1) aggregation of accumulated wealth in the hands of a few; 2) a move by the few to increase the impact and power of corporate money on government via lobbyists and no caps on political donations; 3) legal attacks on the ability of workers to band together to counter balance corporate interests (a la Ohio and Wisconsin); 4) constant attacks on estate taxes, which if successful, would over time create total disparity of wealth; 5) tax codes that favor and encourage these trends; and 6) attempts to discourage from voting those groups who are likely to vote against any of the above legal moves.</p>

<p>Money is power. The Citizens United ruling made both corporations and wealthy individuals much more powerful. We get the government we pay for. I want the next guy’s dollar to count as much as mine, no more and no less.</p>

<p>I’m not against people earning a great wage, and the government should not tell corporations what they pay their employees. But have you taken a look at how corporate votes are done? All you folks who talk about stockholders including so many middle class people - have you noticed how many of the proxy laws are controlled by the corporations themselves? Individual stockholders couldn’t vote the board out if they tried. And why is a hedge fund manager’s income taxed at the low capital gains rate, instead of normal salary (note, my salary comes from a corporation that has real estate - does my salary get treated as a real estate deal?)</p>

<p>All this talk about “oh, you’re just envious”, or “it’s unbecoming” is pretty far off base. Please stop trying to personalize or categorize the people who are concerned about this, and take a look at the facts instead. You’re missing the big picture as it is forming under our noses. If this keeps up, sure, we’ll probably be fine for the next 20-30 years. OWS will pack up their tents. But take a look over the horizon to see where this trend, if it continues, will end.</p>

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<p>"I guess I don’t understand what drives people to scrutinize the compensation of executives at private corporations. What business is it of ours what companies want to pay their employees? Are you suggesting that we pass laws to “regulate” this?</p>

<p>The reason people are concerned is because it affects their lives, and it is a lot more then shareholders. Thanks to so called conservatives and the whole Ayn Rand based ‘stockholder value’ nonsense, the whole idea of stock price and value has been turned upside down. They used to teach in graduate management school the concept of ‘stakeholder value’, that companies had stakeholders, including countries, employees, towns, etc, but today the only stakeholder is shareholders,and more importantly, the big shareholders, which includes executives. The problem with this is as others points out, it leads to what we have seen today even more then in the past (no, this is nothing new, wall st has never been known for being farsighted), which is everything is pumping up share price, and that is the big problem. Today, the typical CEO pay is well above 300 times the average worker, and that gap is growing (in the past year, a horrible year economically, median CEO pay increased 28%, that one was in the Wall st Journal as well as other places). </p>

<p>Once upon a time CEO’s got cash pay and bonuses based on what the company produced, not on stock price, and the problem is that has introduced a layer of fantasy into the equation.It is why CEO’s can run a company into the ground and make 10 million, it is also why a successful company will lay off 10,000 workers or send those jobs to China, because when stock analysts see that they pump the stock. When CEO pay is based in stock grants and options (more the former then the latter), and we are talking high stakes, does the CEO have an interest in long term solidity? Does he have long term interest in developing jobs, or does he have a short term interest in pumping the stock price?
What makes this particularly bad is a lot of this CEO compensation is not long term, it isn’t for long term performance, many of the options and stocks they get have an expiry of 1 year, which even more puts all the weight on boosting stock price. When a CEO is judged on profitablity, on new introductions of products that promise future revenue streams, that is healthy, when everything is his/her own bottom line, it is dangerous. </p>

<p>And save me the harangs about how people through pension plans and mutual funds benefits from this, the problem with that is to be able to do those things one needs to have a decent job first, to pay the bills and yes be able to invest…the other problem is that the income from investments like stock, even if you factor in mutual funds and pensions and such, is heavily, heavily weighted to the very relatively small few in the top percentages of the income scale. </p>

<p>And why should we care what private companies are paying their employees? Because private companies don’t operate in a vacuum as they claim, they operate in a real world with real people, and the decisions they make impacts a lot more then their own employees. Sorry, corporations are not their own country (though these days they pretty much are), and they can try ad duck the consequences of their actions, but they cannot. </p>

<p>This isn’t envy (btw, statistically, I am probably considered one of the more well off people around, am paid pretty well, and I work in the financial industry so I am speaking as an insider), it is about a healthy and stable country. In the past 30 years the concentration of wealth in this country has moved upwards at a rapid clip, in large part because of globalization and also the changes in tax code over the past 30 years, and it isn’t healthy, economists at both ends are worried about it. The top 1% used to have 9% of income, today they control about 24% (and I believe that doesn’t even include investment returns, though I am not sure), that 15% didn’t come from nowhere, it came from everyone else. Likewise, the wealth in the upper 1% has reached levels higher then at the time of the 1929 market crash, and the concentration of wealth and income was one of the factors that caused the Great Depression, along with speculation and banks lending money to speculators (sound familiar)? </p>

<p>As a shareholder, I question CEO pay on basic economic grounds, as basic as it comes. Pay increases are supposed to come out of the value an employee brings to the firm, and in large part this comes out of how efficient the worker is, how productive they are, and wage gains are generally driven by this. The problem with CEO pay is how fast it has grown, it has grown anywhere from 10 to 20 times depending on who you talk to over the past 30 years, whereas 30 years ago a CEO might make a million bucks, today that number is now 15, 20 milllion or more a year. Have CEO’s become that much more efficient? Have they grown their companies that much? Have they created more then they used to? Or have they and their boards simply found a better way to shovel in the compensation faster?
There have been actual studies on CEO effficiency and productivity, and want to know a dirty little secret? It hasn’t grown any more then it has for typical workers, the TFP (total factor productivity) of a ceo grows at a couple of percent a year…so where did this come from?</p>

<p>No, the government can’t set pay, but it can do a ot to reign in the way CEO’s are being paid</p>

<p>-Change the accounting rules on options and stock grants, so that companies can write it off on their taxes but not have to report it as cost on a 10k, as they do with cash bonuses. It is tax code incentivizing the kind of land grab we are talking about, since if we pay a CEO with stock, it in effect costs us nothing and is subsidized by the government (I could be wrong about this, but I don’t think so, I don’t think they ever made reporting grants and options as costs on a 10k filing mandatory). </p>

<p>-We also could change the tax code that if an employee gets stock options or grants that are fully vested in a year, that there is a tax hit for doing this, to encourage long term rewards and disincentivize short term stock pumping. Among other things, depending on how the grants are written, the CEO can claim the stock was granted a year before and claim it as long term capital gains at 15%, disallow that in this case (in traditional long term plans, employees get taxed as ordinary income when stocks vest that were granted as incentives)</p>

<p>-Change SEC requirements for public companies, and make it mandatory that CEO pay has to be vetted and approved by stockholders, not just granted by the board of directors. Either that, or break up the board system, and require that the CEO of one company cannot sit on the board of any company that a member of his own board is an executive at (thus the head of Boeing cannot sit, for example, on the board of Monsanto, if the CEO or top level execs of Monsanto are on Boeings board). One of the problems with CEO compensation is that it is often a closed system, a relatively small group of people setting each others salary, it isn’t healthy.</p>

<p>I am tired of hearing this is ‘class envy’ or ‘class warfare’, especially in the face of the relentless attacks that the problem with US workers are lazy, they want something for nothing, we hear blame about how the workers destroyed the US auto industry, and people pointed out autoworker salaries, yet no one, mysteriously, pointed out someone like Rick Waggoner of GM who saw the company’s market share slip from 40% to 24%, bleed 10 billion dollars, and yet collect 10 million+ a year as CEO… I don’t think people are envious, I think people are seeing the decline in living standards, thanks to globalization and yes, greed, they see themselves working harder then almost any workers in the world in terms of hours, and then see themselves falling further behind. What we are seeing to me is the obvious answer, with things like tax cuts for well off ‘job creators’, with being told that if we float the boat of the very well off, it will float the boats of all, people are asking “where is my piece of this”?</p>

<p>And we should care, for years we have seen the kind of instability in places like South America, where the well off live in gated away communities and fear kidnap and so forth, or in the middle east where economic injustice is fueling both the Arab Spring movements and terrorism, and if people would stop buying the myths of those who talk about the Great Depression and say “it was a tough time, but people pulled together” or say “it wasn’t so bad”, it was. Someone mentioned Huey Long, we had people like him, like Charles Coughlan, we also had a big communist movement, and there was quite a bit of violence as well, followers of Coughlan and Long often got into bloody fights with people opposing them, and farmers, normally the most conservative of people, we outright in revolt, and more then a few sherriffs and bailiffs were shot dead on their way to auction off someone’s farm… more importantly, places like South America and the middle east didn’t even have anything to compare things to, what is going to happen in this country when people who have for a couple of generations believed the next generation are going to have it better, stop believing that, which is already going on? All the lying, all the class warfare against US workers by those at the top, eventually that is all going to fail, and then what is going to happen? A country that rewards the relative few with luxury and a not very well off standard of living for everyone else is going to have major problems.</p>

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But that doesn’t mean it doesn’t exist. I think it does and it’s leveraged by certain groups and we’re seeing some of the results of that with the protesters. I think they’d be better served to try to work their own way to those higher income positions, if a higher income is what they want, rather than worrying so much about the income of someone else but I guess they’re not going to accomplish that if they’re camped out in a city park rather than trying to work. </p>

<p>Hopefully those who feel they’re not paying enough taxes will literally put their money where their mouth is and do what they can to maximize their own tax payments as opposed to their tax deductions. Personally I don’t think this will solve any issues in the long run but it at least would mean those people wouldn’t be speaking from a position of hypocrisy and they can at least make themselves feel good.</p>

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<p>Not now. But that does not mean that we (including the wealthy) should be unconcerned if the state of the economy keeps moving in that direction.</p>

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<p>musicprnt,</p>

<p>I’m so sorry but the sheer length of your posts just puts me off. Can you not possibly condense your thought to a shorter post? I would like to read them but I cannot read a treatise here.</p>

<p>mini, you posted this:</p>

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<p>You lose me with the second sentence. Who is “we” and what is this about resources upon which fortunes are made? Are you talking about the beloved infrastructure, public education, the armed forces? Okay. But no, we are “created equal”, dear mini, and all have those resources at our disposal. None of us in this country starve or die of hypothermia unless we are severely mentally ill or the offspring of an abuser. This notion that the earnings of the more motivated, talented and perhaps lucky among us are at our collective disposal to disperse in ways that the collective “we” (meaning those, I suspect who agree with you!) is absolutely not what the founders of this nation would have encouraged. They were about equality of opportunity but not equal distribution of the collective earnings.</p>

<p>It’s a rough time right now in the country. People voted in a certain direction they saw as a panacea and it has turned our rather badly and that leaves nowhere to go really except to find witches to burn. And wall street is a good target. CEOs. The mob rages. </p>

<p>If that’s your thing and you want to be part of it then have fun. I would caution that in the end our kids are watching us and expecting us to act like adults, not angry children, raging in some sort of inchoate disappointment that others are rich and we are not.</p>

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<p>Yes, and when people perceive that opportunity is no longer there, the social unrest that results can be detrimental to all.</p>

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<p>You understand things a bit too well, I fear. </p>

<p>Most of the protests are modern versions of the old lunchroom theme of “gimme a quarter”.</p>

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<p>And that perception is being gleefully pushed by the not-so-closeted commies and socialists who pass themselves off as honest brokers. I listen to America Left radio to attempt to gain some understanding of what people think, and I can only say that there are a bunch of jokers out there who are in the “you’re not going to vote your way out of this” mode. They are reprehensible. But they are probably right that the electorate is far too rational for them to achieve their objectives at the ballot box.</p>

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<p>Free k-12 education with virtually free college for kids who actually try hard is pretty good opportunity in terms of the global baseline.</p>

<p>The worst sort of anger is when it dawns on us that perhaps there’s no real target to blame for our situation. I personally think that is where America is at the moment. I"m optimistic that we will move thru the rough patch. I think the raging and the socialist nonsense are mildly worrisome but not really. What will save us is our immigrants, oddly. They are a fiercely entrepreneurial and materialistic crowd and they will keep America on course.</p>

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<p>^^are you going to ignore #142 as well as #143?</p>

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<p>"This notion that the earnings of the more motivated, talented and perhaps lucky among us are at our collective disposal to disperse in ways that the collective “we” (meaning those, I suspect who agree with you!) is absolutely not what the founders of this nation would have encouraged. "</p>

<p>“No man ought to own more property than needed for his livelihood; the rest, by right, belongs to the state.” – Benjamin Franklin</p>

<p>That doesn’t at all mean that it should be distributed “equally”, nor that I believe (or Franklin believed) it should be. I’ve told you my principle of income distribution more than enough times.</p>

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<p>Richard Herman?</p>

<p><a href=“http://www.amazon.com/Immigrant-Inc-Entrepreneurs-Driving-American/dp/0470455713[/url]”>http://www.amazon.com/Immigrant-Inc-Entrepreneurs-Driving-American/dp/0470455713&lt;/a&gt;&lt;/p&gt;

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<p>re #150
of course she is! too much reading required…</p>

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<p>^ if you mean me, then I’m not ignoring them. I am worried about the gulf between those earning a lot and those not. As I’ve stated in other posts, I think part of the cause is our education system which is more of an indoctrination system then an education system, imo. Then I think we are in the midst of a huge global transformation that kids a century from now will read about as we did the Bronze Age or the Gideon Bible or the Industrial Revolution. It is way bigger than America’s tax structure. We are at risk of not emerging from this time of upheaval not because of our taxes or our wealthy but because of how badly our education system has failed us. That’s my take anyway. But I’m optimistic, nonetheless. I think the US will prevail and come through on top. Mainly because there is a deeply ingrained entrepreneurial and materialist ethos here. Ugly as many may find it, I think it will get us through this.</p>

<p>And Ben was sort of an odd ball, mini. But certainly right on slavery. Too bad he didn’t prevail on that. But look at pictures of the guy. An odd dude.He’d be with Ron Paul today . . . a hopeless scold.</p>

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<p>^^you are discounting Franklin, one of your “founders”, based on his appearance?</p>

<p>well, okay,
if you have links for some of these lasts posts you’ve made I would be interested to read them</p>

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<p>Being facetious, alh. Wasn’t Ben a Quaker? My admittedly limited reading about our founders has me of the impression that they were, by and large, quite fixated on private property rights, freedom from taxation, liberty and not wealth redistribution.</p>

<p>But I sound like a “strict constitutionalist” and I’m actually a little leery of that crowd. Everything has to evolve.</p>

<p>Good night, all.</p>

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<p>Well…I liked posts 142 and 143…</p>

<p>I found dadx’s post ridiculous…</p>

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<p>“And that perception is being gleefully pushed by the not-so-closeted commies and socialists who pass themselves off as honest brokers. I listen to America Left radio to attempt to gain some understanding of what people think”</p>

<p>I guess the right wing is still miserable the cold war is over, they lost everything when the cold war ended. Red baiting, anything that differed from some sort of ‘norm’ was communism…and the right is very good at declaring anything not their agenda “socialist”.</p>

<p>We used to have in this country the idea that you earned into relation to the work you did, that hard work and perseverence was rewarded in kind. Sorry, but there is no one who can prove that the dramatic rise in income for the CEO class is anything but what it was, they saw an opportunity to make a massive grab at income and they took it, pure and simple. Tax policy designed to spur capital investment instead became an engine fueling speculative transactions based on blips on a screen, not on real world building of things. Instead of policies supporting small businesses and entrepeneurs, we built incentives for massive global corporations who frankly neither innovate or create things, and we built a support mechanism through tax code and other things to alllow companies to, in the name of ‘globalization’, exploit scads of dirt cheap labor (and I laugh when the tea party dingbats tell me that is because of worker greed, when the reality is that China and India et al have huge populations of dirt poor people, and they aren’t being paid living wages, meanwhile, the CEO’s who have immensly prospered by exploiting dirt cheap labor, are not greedy, they are ‘getting their rewards’.</p>

<p>Sorry, Sew, I can’t condense my post, you and your buddies on here are throwing off sound bites, slogans, as empty as they come, and this is a subject that requires real discussion, not throwing out “class warfare” , Socialist and so forth. It is like the right wing talk radio cranks, many of them working class, who throw out “liberal” like a curse, who demonize unions, when most of them have a decent living because of Unions, and I really fear for them, because they and their kids are in for a rude awakening one of these days when time and again, the people they are suppoting kick them in the teeth. Class warfare as a term is a blanket term designed to denigrate what people are saying, and it is as childish as the school yard argument "It is’ "no it isn’t’ “it is”, etc…yes, I am sure there are some people who are envious of CEO pay, there are others, including myself, who actually care about the country and don’t believe the bs that is thrown out on Fox News or by corporate propoganda, either…and for the record, I technically am ‘one of the elite’, I have done pretty well, have education and skills, but I am no disciple of Ayn Rand, I happen to care what happens to other people, too…and while I admire entrepeneurs, people like Gates and Jobs who created something, I have no respect for finance guys and beancounter CEO’s whose only mantra is “me, myself and I”</p>

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<p>re post 157
ditto…</p>

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<p>142, 143, 158 - thank you for taking the time to write those posts.</p>

<p>and thanks to mini too</p>

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