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Your points are well thought out but I believe CEO salaries are so out-of-line because of cronyism and greed, not because these individuals possess some kind of extraordinary abilities. Agreed in this sense. There is not perfect system and capitalism has its flaws. You compound this with human nature and the things you mention do happen. I am saying that in the overall scheme of thing it is very subjective to say who should earn how much.
Last year many companies posted record earnings, not because CEOs were so ultra-skilled and smart but because of an economic recovery that is the product of much larger macro-forces than any one CEO's abilities. The economic recovery? Perhaps it has to do with that but I do not agree with your total dismissing CEOs. As in anything some may have done great and others not so even with an economic recovery. My whole point was that for someone to say they get paid a lot more is not necessarily true by someone from the outside of a company. Only that corporation know what they think is best to pay a CEO. Is that the right or wrong decision? In some cases they ended up paying the price with the CEO choice they made and in some cases they do not. Business is not an exact science so good and bad decision come into play in a risky field like running a simple store or a large corporation.
The fruits of those record earnings went to CEOs and top management, not to the workers. Whereas I believe that MORE should share in the bounty more equally, not just a few lucky ones at the top.
Again, the worth of every individual in any business is in how much his/her skills are worth in producing results. Also, the distribution of wealth is actually distributed in this form.
Example: A company needs to produce 1000 widgets a day to stay afloat and competitive. How many people can do the actual work to produce them? Let us say 50. Now, how many are needed to maintain the equipment to produce them? Let is say 5. Next, how many administrative personnel is needed to support the technicians and the assembly line workers? Let us say 10. Next, how many people are needed to decide the direction of the company, study the companies around the world that produce the same commodity, decide how much money to invest in the company, etc.
Now, as cold as it may sound, how easy is to find people to be in assembly line screwing the widgets? What type of skills are needed for that?
Next, how easy is it to find trained technicians to fix the equipment?
Next, how easy is it to find trained personnel to do admin functions?
Last, how easy is it to find trained personnel to do the top company decisions?
From the top of the list to the bottom the more and more difficult to find the people to thos their trasks. That is the reality. It is not diferent when you compary stones. The more difficult to get a certain type of stone the more valuable it is and people pay more for it. The same with skill and abilities.
You may complain about CEOs. Now, do you complain about the mechanic that gets paid more than the assembly line worker? I venture to guess you would not as I notice no one makes that types of comparisons. After all the electrician at a production plant does work hard as the assembly line worker. The difference? Skills and abilities. That is the bottom line. So CEOs as a group do have a certain degree of abilities and skill that you cannot find as easily like looking for an individual that is needed to screw two parts together. That is reality and that is the real world.
I am not advocting treating people as simply manchine parts that have not feelings. That is a different point. The reality is that a company that needs to stay alive does look for individuals that can do the job they are needed to do and some positions do require to pay higher than others. Take care
I'm in favor of redistribution of wealth to a greater degree than we have now because the pie-chart below shows how wealth is distributed currently.
Wealth accumulation has little to do with income. High salary earners go bankrupt, and middle class earners become millionaires. Read The Millionaire Next Door. The Millionaire Next Door
Why should wealth be taken from those who earned it and made wise life and financial decisions only to be given to those who make poor decisions and cause many of their own problems?
No, the salaries are high because that's what it takes to get the guy to work for your company instead of someone else's company.
Amazing how liberals don't understand this most basic of economic principles.
Though I guess I shouldn't be surprised. If they understood basic economic principles, they wouldn't be liberals.
No that is not the case. And don't believe me. Believe Warren Buffet. Even he admits that:
"Outlandish ‘goodies’ are showered upon CEOs simply because of a corporate version of the argument we all used when children: ‘But, Mom, all the other kids have one,’”
Read this article on why "cozy relationships" and keeping up with the Jones' have sent CEO salaries spiraling ever upwards.
"A chief executive’s pay is more influenced by what his or her “peers” earn than by the company’s recent performance for shareholders. The practice has persisted because corporate board members, many of whom have personal or business relationships with the chief executive, have been unwilling to abandon the practice."
Example from 2011:
Shareholders at Amgen, one of the largest Biotech firms, lost 3 percent on their investment in 2010 and 7 percent over the past five years. The company has been forced to close or shrink plants, trimming the workforce from 20,100 to 17,400.
Amgen's CEO was earning $15 million, plus such perks as two corporate jets. In 2011 the board decided to give him more. It boosted his compensation to $21 million annually, a 37 percent increase. Show me any other job in America where the project you are in charge of loses millions, and costs 3000 Americans their jobs, and you are rewarded with nearly a 40 % raise.
Why? Because that's what all the other guys were making. Then the next biotech firm looks at Amgen CEO's salary and thinks they won't be outdone and gives their CEO an even larger salary, and so on and so on and so on.....
No that is not the case. And don't believe me. Believe Warren Buffet. Even he admits that:
"Outlandish ‘goodies’ are showered upon CEOs simply because of a corporate version of the argument we all used when children: ‘But, Mom, all the other kids have one,’â€
Read this article on why "cozy relationships" and keeping up with the Jones' have sent CEO salaries spiraling ever upwards.
"A chief executive’s pay is more influenced by what his or her “peers†earn than by the company’s recent performance for shareholders. The practice has persisted because corporate board members, many of whom have personal or business relationships with the chief executive, have been unwilling to abandon the practice."
Example from 2011:
Shareholders at Amgen, one of the largest Biotech firms, lost 3 percent on their investment in 2010 and 7 percent over the past five years. The company has been forced to close or shrink plants, trimming the workforce from 20,100 to 17,400.
Amgen's CEO was earning $15 million, plus such perks as two corporate jets. In 2011 the board decided to give him more. It boosted his compensation to $21 million annually, a 37 percent increase.
Why? Because that's what all the other guys were making. Then the next biotech firm looks at Amgen CEO's salary and thinks they won't be outdone and gives their CEO an even larger salary, and so on and so on and so on.....
And how much money has Warren Buffet agreed for CEOs to pay in his business? I wonder. Tell me how much? Do you think he is paying the same as the lowest worker in the line? I truly doubt it. Take care.
"Redistribution" by its very definition means that by someone's judgment (whose judgment??), one person has too much. Too much house, too much land, too much money, etc. The concept is socialism, but couched as "fairness". Of course it's not right that someone has more than someone else, they say.
By what standards? Who is to say what is too much, or enough? Obama said that "at some point you've made enough" money.
Who does he think he is? There's nothing in the Constitution that allows him to make that call.
There's nothing wrong in principle with government taxing the rich to help the poor. There, I said it.
Voters have realized that government has moved into the business of favoring one group over another, and imposing its rules and restrictions based not on the complete equality demanded by the Constitution, but on constantly-changing standards of "deserving", such as whether they are minorities, whether they are in unions, whether they own land where the snail darter or spotted owl lives, etc. (Needless to say, people who have earned and saved a lot of money, are at the bottom of this list.)
So many of those voters have inserted another qualification on whom they will vote for, for President. Their preferred candidate must be one who will favor them above others. Since such selfish (and even larcenous) desires are not socially acceptable, they couch it in innocent-sounding phrases such as "I want a candidate who understands me", or "I want a candidate who sympathizes with the problems I am facing".
Back when government's only functions were national defense, coining money, setting standards, dealing with foreign nations, prosecuting certain crimes etc., such "sympathizing" was unnecessary. People tended to vote for the candidate they thought could handle the actual, legitimate functions of government better. And they tended to vote for stern, fatherly figures such as George Washington, Andrew Jackson, Abraham Lincoln, Grover Cleveland etc. whom they thought would enforce the laws impartially and deal with challenges sternly and with some degree of integrity.
But now that government's main function has become to relieve you of the everyday problems in your own personal life (distributing health care, controlling the people around you and regulating what they built, what they sold you, what they said in your hearing, planning your retirement savings for you, deciding for you what your children could eat in school, and generally saving you from your own follies and mistakes), more and more voters have now decided that it is more important to have a President they can count on to favor them more than they favor people not like them.
Thus do candidates who fight to "give" them health care based on how much they need rather than how hard they work to pay for what they get, and who favor those who "need more" over those who managed to provide their own without the assistance of government, get voted for more often than candidates who promise to make sure nobody stops you from earning enough to pay for your own health care. Same for candidates who promise to get you into college due to your skin color or national origin, over candidates who promise to make sure you have the same (and no more) chance to get into college regardless of your skin color... but leave it up to you to pay for it yourself.
Back when such matter were none of government's business, there was no point in voting for the more "sympathetic" candidate... and people would even wonder what kind of slippery trick you were trying to pull if you wanted someone who promised to make sure a pound of grain would weigh more at your mill than at the next town's mill... weights and measures being one of the few legitimate functions of government the candidate would actually be able to influence, in obedience to the Constitution.
And in the timeless response to socialistic governments throughout history (including govts with those characteristics long before the term "socialism" was invented), even the people who wanted to stick to the old rules of actual fairness and impartiality, have started to see that it is now a losing gambit. If they don't try to sway government into favoring them more than their neighbor, they will simply find government favoring them far less and oppressing them even more.
And so, one by one, they gradually release their fealty toward stern, impartial govenment that stays out of their lives, and throw in their lot with the people already trying to cadge more favors from government, whether in the name of "making reparations for the wrongs done by previous generations" or "providing health care to those who don't have it (itself a misleading lie)". And they do their best to vote for the candidate who (they will righteously tell you) "understands my own plight a little better" or "sympathizes for people in my particular position" - both phrases that boil down to "he will do more good things for me, and relax the regulations a little more for me, than he will for that guy over there."
Some people wonder why politicians pushing such favoritism, get so many votes. One explanation sometimes offered, is "voter fraud".
But in a sense, voter fraud isn't just fraud perpetrated AGAINST voters. There's another kind: The subtle fraud perpetrated BY voters against their fellow men, in an attempt to get government "on my side and not on your side".
And though subtle, this other kind of fraud is the most pernicious in the long run, since it causes the remaining fair, upright voters to abandon, one by one, their dedication to truly impartial government, and go over to supporting corruptible, me-over-you government.
And the more people who go over to this corruptible, me-over-you government, the more pressure this puts on the remaining (and now dwindling) individual citizens who desire stern-but-impartial government, to give up that desire, and follow.
^^^ Voters vote their pockets, for the most part. Fewer will vote for principle if it costs them something.
....which is why the Framers designed a govt that was forbidden to have much to do with the ordinary poblems and affairs of people's lives. They knew if govt had the authority to regulate every little thing, it would start a "race to the bottom" amopng people pushing and shoving to get govt to favor them more than the other guy.
Today's liberals (in both parties) are doing their best to get around or ignore those bans. And people are voting accordingly, just as the Framers feared.
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