"Why is it assumed that the interests of a company's shareholders and those of its employees are mutually exclusive?"
Because they often are.
Shareholders want quick returns. Employees want a stable work environment. Quick returns for shareholders often translates to short-term strategic thinking at the top, e.g. divesting the company of R&D costs to help improve the bottom line next year.
The guys who come up with these great schemes protect themselves from the fallouts, in ways their employees often cannot.
@Wnderer.....we ARE on the same page. Although I don't hold with huge CEO salaries I don't for one minute think you should distribute it to the workers - it would amount to a few hundred dollars each at most. But there has to be a fairer way of doing things.
Hi Dave, What I mean by 'wealth inequality crap' is that the left is abusing the publics misconceptions about money in order to advance a raise taxes and expand government agenda. This misconception is the belief that you can take the monetary value of things on paper and shift them around on a macro-economic scale. The wealth of the 1% is the ownership of the corporations, businesses, the places we go to work that produce the goods and services we use. You can't sell that off and distribute it to the masses. The left is promoting this idea that we can take money from the rich and give it to the poor to spend, when the reason there is wealth inequality is that we are spending too much and saving too little.
Look, it's like that idea that a $100,000 car is wasteful and that the money should be used to help the poor. If you sell the car, the value of the car stays with the car. You don't get any money for it if you blow up the car. The same thing with the CEOs stock options. You can't just take the monetary value of the stock. Somebody has got to own the stock. Now if this wealth inequality stuff was about increasing savings and having more people own stock, I'd be on board.
Obviously this is a topic that really strikes a chord with peopole. I wonder if there is any data on inequality of pay and whether its gone up in the past thirty years beyond the CEO level to other executives relative to average employees. That may give us a better sense of whether there is in fact a growing trend of inequality in the corporation today, rather than relying on a figure that only relates to one individual within each company.
I can agree with much of what you say of course. But I take issue with some points, if you don't mind.
"These programs don't lift people out of poverty. They entomb them in it."
Can you give some examples and data? You paint a broad brush there with "cradle to grave" government programs, but what actually do you mean?
"wealth inequality crap"
Executive pay has risen relative to average pay within the same organisation in the last three decades and are broadly correlated to what the board of directors decide to pay CEOs. Board of directors are dominate by former executives. The whole system of checks and balances are, unfortuantely, peopled by individuals from the same pool of talent and thus prone to their own bias towards positive feedback.
There IS something wrong with the system. Perhaps legislation isn't the way to solve this, but it is most certainly not crap.
I urge you to look beyond the broad strokes you've painted and put some time into scrutinising the data on pay inequality and base your judgements on that.
Executives make high risk decisions and if remuneration matches that responsibility, then fine. But there is always a possibility that this remuneration may be over or below what is optimum, whatever we wish to think about sanitised, high-level economic abstractions. It works like any other complex system.
Hi Wnderer....gotta take issue with your comment ".....the agenda of this wealth inequality crap...." The wealth inequality is not crap, it's a fact, but I actually think we are on the same page here. The current agenda is crap, I will agree.
> "Yes we have a growing inequality in the ownership of assets"
Which allowing employees to have share options and bonuses at the same rate as the CEO would go some way towards solving.
> "the redistribution of wealth through universal, mandatory, cradle to grave government programs....These programs don't lift people out of poverty. They entomb them in it. "
I totally agree. You don't give a man a fish. you teach him to fish. If a company is dong well and ALL the employees AND the CEO and shareholders do well out of it, no one can complain, can they? But greedy CEOs who exhibit no responsibility towards the employees don't solve this problem.
The way we are doing things is wrong, I think we agree, but you won't change it with carrots, some stick is necessary.
DMcCunney said, "Something is worth what someone else will pay for it. That includes the worker's labor."
Yes but (for example) in the electronics industry, companies that belong to certain trade groups (used to be American Electronics Association, not sure who right now) are asked to report regularly (again, it used to be weekly) to others in their general area what they're paying for each "standard category" of worker, and the purpose of this is specifically to prevent the "social embarrassment" to the CEO of the "horrid disease" of worker wage inflation (yeah I'm having a little fun with the words here). On the other hand the cross-pollination of boards of directors is set up to deliberately PREVENT such comparisons from having any meaningful effect (see "interlocking boards" in your civics text, it's been going on for way more than a century now). So for the worker the standard for setting compensation makes it HARDER to improve pay than a "free market", for the CEO it becomes EASIER. And you're telling us the systems are in balance? Don't think so!
Look at that graph. The primary increase is in assets. Because of the Fed's QE purchases we've seen an increase in the value of assets. And by assets I mean stocks, bonds, etc: the owning of the means of production. Karl Marx wanted the government to own the means of production. The modern leftist wants to sell off the means of production and spend the money on something else. That's just stupid. You can't eat the seed corn.
Yes we have a growing inequality in the ownership of assets. We should have a more distibuted capitalist system. You can have a greater share of the wealth but you can't spend the money. You can use it to add stability and security to peoples lives through greater participation in 401Ks and healthcare saving accounts.
When you look at money that actually gets spent and not invested, you are looking at consumption inequality. Is our economic system, primarily producing goods and services for the rich or is there a reasonably fair distibution of goods and services? I don't see any evidence of a problem here.
Liberalism at its best sees itself as a partner with the free market system; providing regulation to keep the system fair, education and training so people can get jobs and achieve their potential and a safety net to protect people from the temporary down turns and disasters of life.
At its worst, liberalism believes there is something fundementally flawed with capitalism that requires the redistribution of wealth through universal, mandatory, cradle to grave government programs that makes us all wards of the state. These programs don't lift people out of poverty. They entomb them in it. The only cure for poverty is a good job.
It's this latter type of liberalism that has taken over the Democratic party and is the agenda of this wealth inequality crap that this article is supporting.
January 2016 Cartoon Caption ContestBob's punishment for missing his deadline was to be tied to his chair tantalizingly close to a disconnected cable, with one hand superglued to his desk and another to his chin, while the pages from his wall calendar were slowly torn away.122 comments