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  1. #21
    Senior Member ZiL's Avatar
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    Quote Originally Posted by Lateralus View Post

    Define 'truly earned'.
    Forget I said that, it was badly qualified.

    As for competition, I agree that it's necessary for progress, within reason (i.e. not to the point of exploitation). Is a nation having a social conscious (reasonable aid to those who simply cannot compete) not progressive, not in some way more evolved?

    We're talking apples and oranges. You're in support of a particular economic system - having work be valued based upon the demand for it - and everything that I say will be viewed within the framework of that particular economic system. So I guess I can't say much.

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    Quote Originally Posted by ZiL View Post
    Forget I said that, it was badly qualified.

    As for competition, I agree that it's necessary for progress, within reason (i.e. not to the point of exploitation). Is a nation having a social conscious (reasonable aid to those who simply cannot compete) not progressive, not in some way more evolved?

    We're talking apples and oranges. You're in support of a particular economic system - having work be valued based upon the demand for it - and everything that I say will be viewed within the framework of that particular economic system. So I guess I can't say much.
    I'd still like to hear more of your thoughts, ZiL.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  3. #23
    Senior Member ZiL's Avatar
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    Well that's nice of you.

    I guess my main issue isn't about how much we allow people to earn, it's how little do we allow people to earn when compared with the top salaries.

    I found some interesting data on this page Who Rules America: Wealth, Income, and Power having to do with changes in CEO vs. production workers earnings over the years:

    "Another way that income can be used as a power indicator is by comparing average CEO annual pay to average factory worker pay, something that Business Week has been doing for many years now. The ratio of CEO pay to factory worker pay rose from 42:1 in 1960 to as high as 531:1 in 2000, at the height of the stock market bubble, when CEOs were cashing in big stock options;. It was at 411:1 in 2005. By way of comparison, the same ratio is about 25:1 in Europe.

    It's even more revealing to compare the actual rates of increase of the salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs' pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account. "


    The article continues on:

    "If you wonder how such a large gap could develop, the proximate, or most immediate, factor involves the way in which CEOs now are able to rig things so that the board of directors, which they help select -- and which includes some fellow CEOs on whose boards they sit -- gives them the pay they want. The trick is in hiring outside experts, called compensation consultants, who give the process a thin veneer of economic respectability.

    The process has been explained in detail by a retired CEO of DuPont, Edgar S. Woolard, Jr., who is now chair of the New York Stock Exchange's executive compensation committee. His experience suggests that he knows whereof he speaks, and he speaks because he's concerned that corporate leaders are losing respect in the public mind. He says that the business page chatter about CEO salaries being set by the competition for their services in the executive labor market is "bull." As to the claim that CEOs deserve ever higher salaries because they "create wealth," he describes that rationale as a "joke," says the New York Times (Morgenson, 2005, Section 3, p. 1).

    Here's how it works, according to Woolard:

    The compensation committee [of the board of directors] talks to an outside consultant who has surveys you could drive a truck through and pay anything you want to pay, to be perfectly honest. The outside consultant talks to the human resources vice president, who talks to the CEO. The CEO says what he'd like to receive. It gets to the human resources person who tells the outside consultant. And it pretty well works out that the CEO gets what he's implied he thinks he deserves, so he will be respected by his peers. (Morgenson, 2005.)

    The board of directors buys into what the CEO asks for because the outside consultant is an "expert" on such matters. Furthermore, handing out only modest salary increases might give the wrong impression about how highly the board values the CEO. And if someone on the board should object, there are the three or four CEOs from other companies who will make sure it happens. It is a process with a built-in escalator.

    As for why the consultants go along with this scam, they know which side their bread is buttered on. They realize the CEO has a big say-so on whether or not they are hired again. So they suggest a package of salaries, stock options and other goodies that they think will please the CEO, and they, too, get rich in the process. And certainly the top executives just below the CEO don't mind hearing about the boss's raise. They know it will mean pay increases for them, too. (For an excellent detailed article on the main consulting firm that helps CEOs and other corporate executives raise their pay, check out the New York Times article entitled "America's Corporate Pay Pal", which supports everything Woolard of DuPont claims and adds new information.)"


    Make of the article what you will, the guy has his own point that he's trying to push; the statistics are the important part. The problem is that, as CEO and other high earners' salaries spiral higher and higher, a large percentage of the population remains in poverty. We've got a federal minimum wage that won't cut it. Though competition in general aids in progress, should we go all Social Darwinistic and continue to use the "competition" argument as a smokescreen for allowing a select few to earn millions while the reality is, well, that that dream just isn't reality for effectively everyone? Is there a limit? Sure, we can let wages get high, but...how low do they go?

  4. #24
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    Quote Originally Posted by ZiL View Post
    I guess my main issue isn't about how much we allow people to earn, it's how little do we allow people to earn when compared with the top salaries.
    Class envy.

    I quit reading right there.

  5. #25
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    Quote Originally Posted by ZiL View Post
    Well that's nice of you.

    I guess my main issue isn't about how much we allow people to earn, it's how little do we allow people to earn when compared with the top salaries.

    I found some interesting data on this page Who Rules America: Wealth, Income, and Power having to do with changes in CEO vs. production workers earnings over the years:

    "Another way that income can be used as a power indicator is by comparing average CEO annual pay to average factory worker pay, something that Business Week has been doing for many years now. The ratio of CEO pay to factory worker pay rose from 42:1 in 1960 to as high as 531:1 in 2000, at the height of the stock market bubble, when CEOs were cashing in big stock options;. It was at 411:1 in 2005. By way of comparison, the same ratio is about 25:1 in Europe.

    It's even more revealing to compare the actual rates of increase of the salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs' pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account. "


    The article continues on:

    "If you wonder how such a large gap could develop, the proximate, or most immediate, factor involves the way in which CEOs now are able to rig things so that the board of directors, which they help select -- and which includes some fellow CEOs on whose boards they sit -- gives them the pay they want. The trick is in hiring outside experts, called compensation consultants, who give the process a thin veneer of economic respectability.

    The process has been explained in detail by a retired CEO of DuPont, Edgar S. Woolard, Jr., who is now chair of the New York Stock Exchange's executive compensation committee. His experience suggests that he knows whereof he speaks, and he speaks because he's concerned that corporate leaders are losing respect in the public mind. He says that the business page chatter about CEO salaries being set by the competition for their services in the executive labor market is "bull." As to the claim that CEOs deserve ever higher salaries because they "create wealth," he describes that rationale as a "joke," says the New York Times (Morgenson, 2005, Section 3, p. 1).

    Here's how it works, according to Woolard:

    The compensation committee [of the board of directors] talks to an outside consultant who has surveys you could drive a truck through and pay anything you want to pay, to be perfectly honest. The outside consultant talks to the human resources vice president, who talks to the CEO. The CEO says what he'd like to receive. It gets to the human resources person who tells the outside consultant. And it pretty well works out that the CEO gets what he's implied he thinks he deserves, so he will be respected by his peers. (Morgenson, 2005.)

    The board of directors buys into what the CEO asks for because the outside consultant is an "expert" on such matters. Furthermore, handing out only modest salary increases might give the wrong impression about how highly the board values the CEO. And if someone on the board should object, there are the three or four CEOs from other companies who will make sure it happens. It is a process with a built-in escalator.

    As for why the consultants go along with this scam, they know which side their bread is buttered on. They realize the CEO has a big say-so on whether or not they are hired again. So they suggest a package of salaries, stock options and other goodies that they think will please the CEO, and they, too, get rich in the process. And certainly the top executives just below the CEO don't mind hearing about the boss's raise. They know it will mean pay increases for them, too. (For an excellent detailed article on the main consulting firm that helps CEOs and other corporate executives raise their pay, check out the New York Times article entitled "America's Corporate Pay Pal", which supports everything Woolard of DuPont claims and adds new information.)"


    Make of the article what you will, the guy has his own point that he's trying to push; the statistics are the important part. The problem is that, as CEO and other high earners' salaries spiral higher and higher, a large percentage of the population remains in poverty. We've got a federal minimum wage that won't cut it. Though competition in general aids in progress, should we go all Social Darwinistic and continue to use the "competition" argument as a smokescreen for allowing a select few to earn millions while the reality is, well, that that dream just isn't reality for effectively everyone? Is there a limit? Sure, we can let wages get high, but...how low do they go?
    Well, relative poverty is still a problem in the United States, but absolute poverty is not. A better education system would be a good start. Cutting both taxes and spending on nonessential government activities would be another (letting people take more of their income home would help everyone, and businesses would have more capital to reinvest). Also, I am not sure if you're familiar with the concept of a negative income tax, but it's an interesting idea (and a lot more palatable to me than the federal minimum wage, which doesn't help many people). Also, we have to stop thinking about the economy as if it were a pie that some take huge slices from, and other get scraps. That is an inaccurate metaphor. Also, it's not a "select few" that have millions. There are over four million millionaires in this country. We're really really rich. Even the working poor are quite rich by world standards. We need to refocus our efforts into making the entire world wealthier, not to be pissed at Warren Buffett and Bill Gates having tens of billions.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  6. #26
    Senior Member ZiL's Avatar
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    Quote Originally Posted by oberon View Post
    Class envy.

    I quit reading right there.
    Are you being serious? Because I'm not trying to be argumentative, I'm trying to have a constructive conversation. If it is your goal to stymie any discussion on a worthwhile topic, then why bother posting.

  7. #27
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    Quote Originally Posted by ZiL View Post
    Are you being serious? Because I'm not trying to be argumentative, I'm trying to have a constructive conversation. If it is your goal to stymie any discussion on a worthwhile topic, then why bother posting.
    This conversation can continue without the participation of one person who finds it distasteful. Let Oberon go, and get back to what you think about the subject.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  8. #28
    Senior Member ZiL's Avatar
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    Quote Originally Posted by pure_mercury View Post
    Well, relative poverty is still a problem in the United States, but absolute poverty is not. A better education system would be a good start. Cutting both taxes and spending on nonessential government activities would be another (letting people take more of their income home would help everyone, and businesses would have more capital to reinvest). Also, I am not sure if you're familiar with the concept of a negative income tax, but it's an interesting idea (and a lot more palatable to me than the federal minimum wage, which doesn't help many people). Also, we have to stop thinking about the economy as if it were a pie that some take huge slices from, and other get scraps. That is an inaccurate metaphor. Also, it's not a "select few" that have millions. There are over four million millionaires in this country. We're really really rich. Even the working poor are quite rich by world standards. We need to refocus our efforts into making the entire world wealthier, not to be pissed at Warren Buffett and Bill Gates having tens of billions.
    Well I am not pissed at Warren Buffet and Bill Gates for having tens of billions. I do, however, do not understand the free-market rhetoric that's constantly put forth as the solution to everything, as if every major corporation got where it did without some protectionistic aid from the government, or without depressing the wages/benefits of its employees unnecessarily in the name of the bottom line. I agree with you that improvements in education would go a long way, and I'll read up on the negative income tax.
    4 million isn't exactly a large porportion of our population, though.
    Either way, I'm going to keep my eye on this thread, these topics are very interesting and these different economic theories are only something I'm just beginning to teach myself about. Which is why I don't want to get into any kind of idealogy battles, as I'm only beginning to learn about this stuff. High school government and economics classes were pretty fruitless, you see.
    And if I come across as "classist," it's not intended, I'm just trying to understand your views better working from (currently) limited economic knowledge.

  9. #29
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    Quote Originally Posted by ZiL View Post
    Well I am not pissed at Warren Buffet and Bill Gates for having tens of billions. I do, however, do not understand the free-market rhetoric that's constantly put forth as the solution to everything, as if every major corporation got where it did without some protectionistic aid from the government, or without depressing the wages/benefits of its employees unnecessarily in the name of the bottom line. I agree with you that improvements in education would go a long way, and I'll read up on the negative income tax.
    4 million isn't exactly a large porportion of our population, though.
    Either way, I'm going to keep my eye on this thread, these topics are very interesting and these different economic theories are only something I'm just beginning to teach myself about. Which is why I don't want to get into any kind of idealogy battles, as I'm only beginning to learn about this stuff. High school government and economics classes were pretty fruitless, you see.
    And if I come across as "classist," it's not intended, I'm just trying to understand your views better working from (currently) limited economic knowledge.
    You're not wrong about corporations benefiting from government largesse. You should read some of Gabriel Kolko's stuff. He wrote a lot about how the Progressive Era actually was conservative in its mindset, and that Corporate America seeded some of its autonomy to government in exchange for rationalization and friendly regulations and a "seat at the table" when it comes to legislation. Being pro-free market does not equal being pro-business. The free market destroys a lot of businesses in its day-to-day function. The rhetoric has been co-opted.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  10. #30
    Senior Member ZiL's Avatar
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    Quote Originally Posted by pure_mercury View Post
    You're not wrong about corporations benefiting from government largesse. You should read some of Gabriel Kolko's stuff. He wrote a lot about how the Progressive Era actually was conservative in its mindset, and that Corporate America seeded some of its autonomy to government in exchange for rationalization and friendly regulations and a "seat at the table" when it comes to legislation. Being pro-free market does not equal being pro-business. The free market destroys a lot of businesses in its day-to-day function. The rhetoric has been co-opted.
    True, that's something I, as many people often forget, that free-market rhetoric does not necessarily equate with de facto practice. That's where problems arise for me. How do we know if a business or person has become successful purely due to their honest ability to beat the competition? Without the aid of government protection, or monopolistic alliances between competing corporations trying to ensure no threat from those below? Who is a model businessperson/business that can be looked up to who hasn't changed their economic rhetoric to suit their own changing needs, flying in the face of free-market ideals to suit their own shifting self-interests? And don't get me wrong, I'm not trying to say these model businesses/businesspeople do not exist, I'm just saying, how do we know who they are?

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