But not extreme exec salaries and perks. They take money out of the company in grand style. They hurt everything but an execs pocketbook.
Oh you mean regulations like Sarbanes Oxley? Maybe counterbalances like the SEC? Do you know that every year, all public companies have to go through an audid? And if those firms sign off on a company that is guilty of corruption, they too can suffer serious consequences? Did you know that there are dozens, if not hundreds, of law firms that would love nothing more than to be involved in some kind of lawsuit against any major corporation? Companies get sued and indicted all the time for violating the “counterbalances”.
If you want to assign blame, blame the unions for the demise of manufacturing in the US.
Total employees prior to Bill Gates? Zero
Current number of full time employees with Bill Gates - 71,000
Market capitalization (value of all outstanding shares of stock) of Microsoft before Bill Gates? Zero
Current market cap with Bill Gates - $295 BILLION
Current worth of Bill Gates - approximately $25 billion, mostly in MSFT stock
I’m sorry, I forgot the point of your argument. Was it that Bill Gates is rich?
Seems to me that I don’t give a shit how rich he is because over 30 years he managed to create over a quarter of a trillion dollars worth of wealth and employ probably over a total of 100,000 employees where there was nothing. And that doesn’t even consider the companies that do business with Microsoft or the wealth generated by the use of their products.
Oh you mean regulations like Sarbanes Oxley? Maybe counterbalances like the SEC? Do you know that every year, all public companies have to go through an audid? And if those firms sign off on a company that is guilty of corruption, they too can suffer serious consequences? Did you know that there are dozens, if not hundreds, of law firms that would love nothing more than to be involved in some kind of lawsuit against any major corporation? Companies get sued and indicted all the time for violating the “counterbalances”.
If you want to assign blame, blame the unions for the demise of manufacturing in the US.
Total employees prior to Bill Gates? Zero
Current number of full time employees with Bill Gates - 71,000
Market capitalization (value of all outstanding shares of stock) of Microsoft before Bill Gates? Zero
Current market cap with Bill Gates - $295 BILLION
Current worth of Bill Gates - approximately $25 billion, mostly in MSFT stock
I’m sorry, I forgot the point of your argument. Was it that Bill Gates is rich?
Seems to me that I don’t give a shit how rich he is because over 30 years he managed to create over a quarter of a trillion dollars worth of wealth and employ probably over a total of 100,000 employees where there was nothing. And that doesn’t even consider the companies that do business with Microsoft or the wealth generated by the use of their products.
No, I don’t QUITE mean profit. I was saying that if we make it so there’s a million dollar cap that’s the maximum that anyone can get paid, what happens to the rest of that would be Jack Welch’s salary?
It gets invested with the rest of GE’s profits. They’re only going to pay their MW workers more if the market demands it (assuming they even have any MW workers).
One other thing. That even assumes you can get a Jack Welch type CEO at that level. Why would he work for a public company when he can work for a company he starts and owns that stays private? In a private company that he owns, he litterally can keep all the profits for himself if he wants-- in the form of stock or dividends or whatever arrangement he makes.
There is no way I would do a job like that for $1 million. My boss probably makes that in profit, and she only has 2 employees to worry about…you are right, why would anyone take on all of that additional responsibility & headache when they could make just as much running their own business? Some folks might, just for the prestige, but I’ll bet the pool would be a lot smaller.
And you are dead right on your other point, as well…jobs pay what the market demands. Even if you only paid the CEO a dollar, there would be nothing to drive the company to pay low-level workers any more than what they already are being paid. The company is going to put the money where they think it will do the most good for the business, and that’s the bottom line.
The major problem is that the money is not being spent or invested in the local economy – its being used in the global economy which allows for the ease of exchange for goods and capital – but not labor.
And the ‘trickle-down effect’ has not been so effective at trickling in the ‘right’ direction so well these days. And I believe that’s do to the lack of velocity* in money which happens when its concentrated in a few hands than in the hands of many. The number of transactions decreases, and those are skewed in the direction of the rich. Which increases demand? A thousand people with a thousand dollars or one person with a million dollars?
- I know the Austrian school disparages the concept. I humbly disagree with their conclusions. There is little empirical research on the relationship between velocity and level of transactions, which I believe has a positive correlation, and their effects on the economy. The standard model holds one or the other constant, leading to inflation or deflation. I do not find the reasons for doing so convincing.
Please avoid red herrings. Where have I advocated for the hoarding of money?
The same people who provide the millions of dollars currently – banks, mutual funds, pension funds. And those funds are the conglomeration of thousands of accounts. It does not require one individual to have a massive income to spur investment. You make the same point – the money will be spent regardless of how many owners it has. Yet how is only fewer owners more beneficial than many? All corporations should only be owned by a few shareholders? Compare the difference between blue chips and penny stocks – which has the large range of ownership which enables a securities market?
Another red herring – where did I mention competition? But since you mentioned it, competition is only possible when there are more than one player in the market. Which fosters greater competition – businesses chasing after one buyer or a thousand? Which economy allows greater specialization of labor and increased productivity?
Hmmm, lets break this down: “I am against excessive income at the top.” I – meaning myself, I make no claims for anyone else. *Am against * – self-explanatory I hope. Excessive – meaning more than is just – either according to the market, ethics, or whatever combination of the two. Income – the amount one is paid in compensation for doing ones job. I have not advocated against excessive wealth. The whole point of modern economics is to increase the size of the pie. I am completely for that – its partly what I am going to college for. I am against those who take a slice of that pie far greater than what they have earned. *At the top * – those in control of the pie. The owners, the oligarchs (this point is part of the new thread.) The opportunities for those at the bottom to receive an excessive income are slim to none. I am against it in principle also. And its only in principle since I have not been convinced that it occurs in practice enough to skew the market the way the manipulation at the top has done so.
Living wage and excessive income are separate though related arguments. Advocating one often does involve advocating the other since excessive incomes are a main reason why living wages are so difficult to obtain. And this is somehow disingenous?
There isnt a limited amount of wealth? Then where is my castle and pony? Whether the rich are hoarding that wealth is another issue. But again, I am not talking about wealth (for which at any given moment is limited, but does have a very large capacity for growth that we have only begun to embrace.)
Who am I? I am a citizen of a democratic republic. With hopefully the equal opportunity to influence, campaign and argue the same as all citizens. I am also a consumer and participant in the ‘holy’ market. Both of which enable me to support those that think the same as I do. Yet I do not impose any decisions. I merely advocate a position. Nor I am dogmatic about it. I do not say “You should be against excessive income. You should be for income redistributions.”
Cite please?
Huh?
Then futures contracts, supplier contracts, price hedging and other manipulations of the market should be illegal? Everything should be purchased at the spot price then?
Continued in new thread. See below.
It is now hubris to merely advocate what my own personal judgments are? On a message board forum which supposedly seeks debate on those judgments? ANd the whole system is composed of individual value-based judgments. That is reality of the highest order. I also know I am part of the fortunate few in that I can have a voice in the system and that my judgments may help influence others. One of the reasons I am here. I suppose I could just go to a shack in Montana and start my manifesto, but my hubris is not quite that high yet.
Almost. But not quite. Intrinsic is what the object’s true worth is. It might be what I think it is. It might not. It’s generally what the best use of the object is. And that generally depends on the owner. And it might match the extrinsic value. It might not. Neither one relates to what I am discussing which is the transactional value. And that is the price you paid for it – regardless of extrinsic or intrinsic value. The transactional value is the one you list on your books. The one you present to the banker, the accountant, the auditor and the revenue agent. I think that value is the most relevant, not the market value. But this really has become a meaningless (worthless?) hijack, so I’ll let it go.
We are obviously working from different definitions of ‘revalue’, so I’ll let this go too.
Nice theory. Very Austrian, yes? I disagree with many aspects of it, but it requires more study and a better answer than I can provide here. But I do want to ask is how union manipulation of wages any different than executive manipulation of compensation? And how do you reconcile the fact that the middle class eroded when the ‘minimum’ on labor was still higher higher than minimum required by law? We gravitated to the lowest wage that society would allow, not the lowest that was legally possible. By the above theory we should have, yes?.
The middle class – those earning the median wage (usually defined as 80% - 120% of that median.) And most objective* sources I have seen shows a shrinking of the that group in America. Brookings Study (PDF). EPI. (Fortunately it is growing very well in India and China.) Do you have any cites otherwise?
*Do they lean left? Yes. But their data is solid.
And the level of underemployment is even more relevant to the issue. Good luck finding decent statistics though. Wonder why that is…because those stats might shed real light on the real problem?
But just to be clear, sometimes putting the money into better pay for workers is the best thing for the bottome line. The thing is, that’s something the businesses have to determine, not government. The government has other considerations besides the bottom line to consider-- and that’s why the government (ie, the people) should fund any social progams that our society (ie, the people) thinks we should have.
That’s assuming that such a hypothetical cap even exists, and if that were the case, private or public, there’d be a cap. I didn’t specify such things, so it’s my fault.
See, I’m not JUST arguing for minimum wage earners, although I believe they need the most arguing-for. It doesn’t matter to me if GE has ANY minimum wage workers, so long as the rest of that hypothetical amount past a million gets circulated back to the workers.
You are right that there are various ways that a company could use that extra capital in terms of investment. Better pay for workers may be what is in their best interest, but that’s probably still driven partly by the market…better pay would probably translate to better workers. I was thinking that what is probably more likely to happen is that the money is invested to make the business larger, and thereby employ more people, which would certainly be a positive effect as well.
Regarding “Communism”:
There is a radical difference between total state ownership (stereotypical “Communism”), & egalitarian socialism or ownership-society socialism. The first puts the means of production in the hands of the state, which makes it the old familiar absolutism that most large “builder” societies have used for thousands of years; the second really does put at least some capital in the hands of the workers, if not always as much as Marx wanted. And some of the most nearly successful stabs at that kind of “Communism” (actually socialism) have been in countries that never had a full Leninist revolution, but had not-quite-Marxist labor movements that achieved benefits for their members. So if paying people what they “deserve” as human beings is “Communism,” the United States has been “Communist”–& richer than Croesus–since before my parents were born.
Repeat after me: Wage & price controls are not gulags. They’re not even forced collectivization.
Now, should every worker “be paid enough to live on”? Umm, yeah. Obviously, there are going to volunteers, interns, & the like (as there are now). But if this is what you do to keep the wolf from the door then you should be paid enough to keep that frickin’ wolf from that frickin’ door without going into debt, or enough to get the hell out of whatever hellhole you’re in that you really can’t. Do I expect the federal government or a UN Resolution to do this? Actually, no. I think collective bargaining works better. Workers need to stand up for themselves, while armed if necessary.
Ah, yes, the magic start-up competitor, perhaps funded by capital found in a 3-year-old’s ear. In the real world, John, both companies would have a tough time for a while, as they have to split the customer base. And there might be more than two companies trying some variation of it (as indeed companies do).
I don’t see how it makes any difference if it gets spent in the global economy or the local one - in both cases it is invested, not hoarded, and thus goes back into circulation. Unless you are advocating protectionism of one sort or another, which is another thread entirely.
Do you have a cite that it is one or the other?
Especially as you go on to post the following -
How is it different, IOW, to have one account with a million dollars or a thousand people with a thousand each? Why doesn’t demand shrink because money is concentrated in one pension fund, just as you seem to believe it would do if it was concentrated in one individual’s investment fund?
I assume you have heard of, for instance, mutual funds.
I think the argument is that living wage and “excessive incomes” are both functions of the market - attempting to limit one by fiat is just as likely to fail as the other. As has been mentioned, simply passing a law that Joe Success cannot make more than a million a year is no guarantee that he will then spend the excess on his workers - just the opposite, in fact. Joe has received a disincentive to build his business anywhere beyond the point that he will receive a million a year from it, and thus is discouraged from expanding and hiring new people or seeking new markets.
Suppose Joe is a surgeon. He can make a million a year doing, say, a hundred operations a year. Suppose he develops a surgical procedure that can be done more easily than the one he does now, and thus can be done in an hour instead of two hours. Why should he bother to switch to the new procedure? He gains nothing except twice as much work.
I think that is the basic problem with much of the thinking behind a LW. There is no such thing as “intrinsic worth”, of labor or anything else.
No, it depends on the market.
Think about it this way. What is the “intrinsic worth” of an ounce of gold? Is it $100? $200? Nothing?
What if you are trapped on a desert island? Has the worth changed? The owner hasn’t - I own the gold, so I should be able to set the intrinsic worth.
It is not exactly a quibble - do you have a cite that shows that the middle class is shrinking because its members are sinking to the lower socio-economic classes in constant terms?
I do not mean as a percentage of total wealth, or in terms of a gap between richest and poorest. I would like to see evidence that the middle class is getting poorer, not that the middle class is getting rich faster than can be replaced by the lower classes getting rich as well.
Well, at least you are not going to dismiss counter-evidence out of hand because it comes from right-leaning sources, as other dishonest Dopers tend to do. 
Or - perhaps - the actual existence of something real that can be called “under” employment has not been established.
Do you mean that people would like to earn more than they do? That certainly exists. Do you mean that poor people especially would like to live as they see people do on TV? That is certainly real as well.
Does it mean that there is some level of income that exists independent of what a person’s labor can bring on the open market? Sorry, no such.
Regards,
Shodan
You have taken a series of quotes from me out of context, so I’m not going to respond since most of these points have already been discussed earlier in the thread. It’s too bad you weren’t participating earlier, but I’m not going to rehash this stuff-- especially since all you’ve offered is sarcastic comments.
And not even very interesting or particularly insightful ones at that. It constantly amazes me the folks who try and debate this subject without seemingly having a clue as to how business actually works, what the market is (and is not), how economies actually funtion…or the myriad other issues involved.
-XT
Why is we idiots can not get it through our thick heads ,that wasting many millions on overpaid executives is a good way to grow a business. Probably because it is not. When the money goes into equipment and expansion ,thats good.
A better question would be…why is it that some folks can’t understand that its not a waste of money at all, that the money isn’t being thrown away, and that by and large those CEO type executives are not overpaid…not considering what they actually do? At a guess, its because folks don’t actually understand what a CEO actually does (this is evident in Evil’s thread about how upper management is worthless and actually doesn’t do anything), don’t understand how or what the market is or how it works (and how it does not work), nor understand how business works?
As for the money going into equipment and expansion…you do realize, I trust, that successful companies DO invest heavily in new equipment, expansion, aquisition, etc…right? Of course you realize this… :dubious:
-XT
Kinda says it all right there. 
Because you can’t grasp that money is not wealth. As someone pointed out earlier, there is not a fixed amount of wealth on the planet to distribute. It’s not infinite obviously because the Earth is finite, but it’s not fixed. Advancements and innovation allow wealth to be created by utilizing raw materials in new ways.
Money is simply a medium of exchange and an expression of relative value. That’s why there is no inherent value to a persons labor or any other good or service. It doesn’t matter if you raise Bob the Dishwashers salary and put a cap on Mortimer P Moneyworth III’s CEO salary. Bob is still at the relative bottom and Mortimer is still at the top. The markets for the products and services they buy will react accordingly so that Bob will STILL be struggling to make ends meet, Mortimer will still be living at a much higher standard of living and all the pro-LW folks will be sitting around scratching their heads saying “what the fuck?”.
Its about values, isn’t it? The actual economic impact of wildly overcompensated executives is probably negligible, I offer it as relevent only in what it says about how we value work, how the “free market” standard is, by definition, devoid of such values.
Take teachers, for instance. Few would deny the value of good teachers to our society, even to our species. I imagine almost all of us could personally identify at least one teacher who struck that sacred spark of curiosity. Teaching used to be one of those professions that was compensated mainly with respect, a social recognition of the value of work. Nowadays, teachers are better compensated financially, and I applaud that. But I suggest to you that a “system” that compensates a talented businessman *a thousand times * over a talented teacher is breathtakingly corrupt and cynical.
And just in passing…you know, when you posit the argument that your opponents view is founded entirely on ignorance…well, lets just say that that sort of contempt of other’s intelligence if offensive. For you own good, I want to point out that that’s just the sort of thing that is why you never win any elections.