Ah, right. And the boards of directors making combined billions of dollars wouldn’t have undue influence over the federal oversight meant to watch them. I mean, just look at the rock solid health of our financial system! They must be doing something right.
I wasn’t around then, so I can’t say for sure, but it seems that companies in the 60s acted more in their own long term interest, and seemed to have some sort of ethics in regards to the treatment of their workers. The idea that you should cut good workers to get your quarterly profit stats up so you can cash in on your stock options seems to be a relatively recent trend.
The 60s are just the example I used because I knew about the 40x ratio, but for most of the century CEO pay has been some very small fraction what it is now, relative to the average workers. The 60s also serve as a good example since they are probably the best economic times in American history.
But you’re essentially just confirming my point - you don’t know what anyone deserves to make, but you trust the market has set the correct rate. You fail to acknowledge that there are mechanisms that can distort true market value.
What made the US economy so great in the 60s is exactly why they are a bad model to use for today. The conditions were very different as the US had many fewer competitors. We were still living off the great luck of being the only industrialized nation not torn to bits in WWII.
And you do? How did you come upon this wisdom?
No, I did not. If you want to eliminate any of these distortions, knock yourself out trying. There is no guarantee that that will result in the change in CEO pay that you expect.
You can’t blame them for something they are pressured to do in a competitive market place. I’m not saying they are angels, but blaming them is like calling the contestants in Running Man murderers: they are, but that’s missing the point entirely. In a competitive environment, you have to compete. If someone else influences oversight, then you have to also in order to compete. If you don’t, you will be fired and someone else who will will be put in your place who will. It’s entirely a faceless impersonal process, separate from questions of individual ethics; it’s the job of corporations to make money, and the job of the overseers to keep a level playing field. If oversight is corrupt, then that needs to be fixed. It is pointless to focus on the competitors. It’s like focusing on the basketbal/soccer/football players who foul their opponents. The ref needs to do a better job; if he doesn’t, the pressure on teams to win is too great regardless of their ethics, players will starting fouling more, and in order to compete other players must foul. That is why there are referees at all, because in competitive environments you cannot be so naive as to focus on personal ethics. The focus needs to be on the oversight.
Actually, it’s more plausible to conclude that the various mechanisms forcing accountability on CEOs have broken down during the past few decades – people en masse don’t get smarter or stupider over that timescale, but institutions do.
You mean when the guy in the mailroom gets either a multimillion dollar bonus when the company prospers or a multimillion dollar golden parachute when the company crashes and burns? I’m sure the guy in the mailroom would be OK with that.
Of course such things can exist. But you seem to take it as a given that this is what is rampant in our economy; it’s not merely a notion you want people to acknowledge as possible, you want people to admit that this is the de facto model.
Do you have a cite, or should we just take your word for it? Do you dismiss the firms that don’t fail, that are profitable, even when factoring in the CEO’s pay? In the absence of evidence, I see no reason to assume that it’s anything other than market forces. Why would shareholders work against their best interests, over and over, time and time again, when there are mechanisms to stop such excesses in their tracks?
If there are abuses in the economy, we should guard against them and minimize them. But I agree with John. That’s how our economy works, with certain limitations and exceptions. How much are you worth (economically speaking)? That’s easy. You’re worth what someone is willing to pay you.
You can disagree with his position (I’m not saying I do or I don’t), but he’s not suggesting “poor people” are a new phenomenon. He attributes it to an entitled generation, a new sort of perspective where privilege is a function of simply being alive and not a result of hard work; one that has been carefully cultivated through raising kids as special, deserving little flowers, where that entitlement need not bear any relationship to, well, anything.
If Carolla thinks that a few extra trophies in Little League has shaped the views of a generation, let me offer the following hypothesis. For the last few decades, the 99% have been working harder, putting in more hours, educating themselves more, and being more productive than in years past, and yet seeing no real increase in their standard of living. That was always the bargain, wasn’t it; everybody works their asses off to make the pie bigger and everybody gets a bigger piece? Carolla thinks they’re acting entitled to something they didn’t earn. I think they’re tired of working to earn something and not getting it.
The people at OWS aren’t “the 99%”, they’re the bottom of the top quartile who grew up on third base and are angry at the world that they haven’t hit a home run. They’re people whose parents put them through elite colleges, who expected to have these do-nothing banker jobs, who are angry that they were born just a few years too late to be on the other side of the protest line. Real poor people don’t have iPads to tweet their political opinions on, and more importantly, real poor people have to go to their shitty jobs or the shitty unemployment office to get by, they don’t have the luxury of leaving their parents’ houses for a few weeks to chill out in the drum circle at Protestor Fantasy Camp.
I’m really disappointed at the level of discourse in this thread, it looks more like a Youtube thread than a Straight Dope thread.
Cenk Uygur of the Young Turks (coincidentally, available on Youtube) takes a much better approach than any of you do, by making meaningful distinctions based on reality. He points out that none of the OWS folks are criticizing Steve Jobs or Bill Gates or similar innovative types. They are criticizing WALL STREET, the people who got wealthy thorugh massive fraud. Uygur cites a specific example: Hank Paulson giving a dozen or so hedge fund managers inside information about the forthcoming Fed takeover of Fannie Mae and Freddie Mac weeks before it happened. It was a clear case of insider trading: people should be in jail for it. This was not brilliant and incisive economic analysis, this was just plain old cheating the system. The OWS people are targetting EXACTLY the right people, idiots like Corolla are not able to make a distinction between them and Steve Jobs.
Really, people. Level up, here. You’re making me ashamed.
Exactly. And not only did they “not hit a home run”. A lot of them barely showed up to batting practice. Or they found out their “do-nothing banker job” meant working 100 hours a week, which was too much of a drag, man.
The trophies are a metaphor.
I think the point is there was never a “bargain”. Everyone has to make their way in the world the best they can. I’m not sure who it is you people think are supposed to assign these permenant jobs with just and fair salaries?
FWIW, this spirit of “entitlement” is pervasive accross all economic lines.
The hedge fund managers made trades, probably hedges against Fannie Mae and Freddie Mac securities. It’s the sort of thing the prosecutors at the justice department should be investigating, but are not.
Carolla lamented “participation trophies” and preferential treatment in his rant. So does OWS.
TARP was the ultimate loser’s trophy.
To be on the verge of failure like Citi and Bank of America and to be handed a $45 billion check from the taxpayer’s is the ultimate definition of “government handout”.
(yes, I know both banks repaid in full + interest)
So, you don’t have any specific names nor do you have any specific trades.
If you’ve got a cite, let’s see it. Don’t make us watch some video, especially after that chest pounding you just did about being soooooo above what you called a “Youtube thread”.
But I’ll give you a hint. I know about this story, and there is no evidence to indict anyone for insider trading.
Congress is subject to insider trading laws on CORPORATE information.
Its silly to call public policy “insider” info.
This could get ridiculous, a SCOTUS judge is in a far better situation to profit from a legal ruling than Congress is legislative action.
When the Exxon Valdez case was thrown did a justice buy Exxon stock?