Hey, Busyman...

[j2k4]

...if you're not too, um......busy, could you enlighten me as to whether the following is "spin" or not.

So as to satisfy your previously stated demand for qualification, I hereby avow my concurrence with the ideas, sentiments, and logic contained therein.

A MINORITY VIEW - BY WALTER E. WILLIAMS - WEDNESDAY, JANUARY 2, 2008

Greed, Need and Money

Demagoguery about greedy rich people or greedy corporate executives being paid 100 or 200 times their workers' salaries is a key weapon in the politics of envy. Let's talk about greed, starting off with Merriam-Webster's definition: "a selfish and excessive desire for more of something (as money) than is needed."

That definition is a bit worrisome because how does one know what a person really needs? It's something my economics students and I spend a bit of time on in the first lecture. For example, does a family really need one, two, three or four telephones? What about a dishwasher or a microwave oven? Are these excessive desires? If you say these goods are really needed, then I ask, how in the world did your great-grandmother and possibly your grandmother, not to mention most of today's world population, make it without telephones, dishwashers and microwave ovens? "Need" is a nice emotional term, but analytically, it is vacuous.

"Selfish" is a bit more useful term, and it's the human motivation that gets wonderful things done. For example, I think it's wonderful that Alaskan king crab fishermen take the time and effort, often risking their lives in the cold Bering Sea, to catch king crabs that I enjoy. Do you think they make that sacrifice because they care about me? I'm betting they don't give a hoot about me. They make it possible for me to enjoy king crab legs because they want more money for themselves. How much king crab would I, and millions of others, enjoy if it all depended on human love and kindness?

What about complaints about CEOs earning so much more than the average worker? Before looking at CEOs, let's look at another area of huge pay differences. According to Forbes' Celebrity 100 list, Oprah Winfrey earned $260 million. Even if her makeup person or cameraman earned $100,000, she earns thousands of times what they earn. Among the celebrities earning hundreds or thousands of times more than the people who work with them are: Steven Spielberg ($110 million), Tiger Woods ($100 million), Jay Leno ($32 million) and Dr. Phil ($30 million). According to Forbes, the top 10 celebrities and athletes earned an average of $116 million in 2004 compared to an average of $59 million earned by the top 10 corporate CEOs.

When Jack Welch became General Electric's CEO in 1981, the company was worth about $14 billion. Through hiring and firing, buying and selling decisions, Welch turned the company around and when he retired 20 years later, GE was worth nearly $500 billion. What's a CEO worth for such an achievement? If Welch was paid a measly one-half of a percent of GE's increase in value, his total compensation would have come to nearly $2.5 billion, instead of the few hundred million that he actually received.

If a corporate board of directors could buy a $1,000 computer that could do what a CEO does, it wouldn't pay him millions of dollars. If an NFL owner could hire a computer to make decisions that star quarterbacks make, why would he pay some of these guys yearly compensation packages worth more than $10 million? If just anybody could have played the lead role in "The Da Vinci Code" and have it earn $758 million at the box office, why would the film's producers have paid Tom Hanks $74 million?

There's another important issue: If one company has an effective CEO or a team has a star quarterback, it is not the only company or team that would like to have him on the payroll. In order to keep him, he must be paid enough so that he can't be lured elsewhere.

You say, "Williams, what about those golden parachutes for failing CEOs?" Paying a failed CEO, or a spouse in the case of marriage, enough money to go away quietly might be much cheaper than litigation.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

[chalice]

http://www.sugarcainentertainment.com/filmtv/images/fulvio_01.jpg

[Busyman™]

No it's not spin.

[j2k4]

No it's not spin.

Excellent.

Your response is remarkably brief, however.

Can I take it you agree with Mr. Williams, or are you too tired from all that reading to expand on your answer. :whistling

[clocker]

Still working on today's first cup of coffee so forgive the mental lapses, but...

-Not buying the CEO/quarterback analogy.
Quarterbacks (and any sports star for that matter) typically have a very small time window in which to perfect their talent before injury or inevitable physical decline renders them unsuitable for duty.

As fond as business is of sports metaphors, it's unlikely that Jack Welch ever faced the possibility of leaving a board meeting on a stretcher, his knee/shoulder/neck permanently mangled.
Furthermore, Mr. Welch could effectively perform his duties from a wheelchair while Tom Brady could not.


You say, "Williams, what about those golden parachutes for failing CEOs?" Paying a failed CEO, or a spouse in the case of marriage, enough money to go away quietly might be much cheaper than litigation.
This seems like an awfully tepid justification for an egregious situation.
"Might be"?
It "might be" easier to throw up our hands when someone is murdered because dammit, it's hard to track down a killer, but that's not what happens, is it?
Why should a corporation "quietly" accept the double-fuck of the golden parachute for the failed executive...fucked once when he proves incompetent and fucked again by having to extravagantly reward him to leave?

Yeah, I get that corporations are loathe to admit failure- "Boy, what were we thinking when we hired that bozo?"- but on the other hand, why would the "bozo in question" be any more anxious to air his failures in public?

Of course, this entire discussion would be moot if businesses would simply wise up and tie executive pay to performance.
If the company does well then fine, rain riches upon he who made it happen.
If the company tanks, then run him out of town on a rail and make sure everyone knows about it.

At this year's CES, Sony took the (almost) unprecedented step of apologizing for their missteps in customer service the past few years.
They essentially took the same advice that Dr. Phil insipidly doles out every day to regular folk- Sony "owned" their mistakes and promised to do better.

And guess what?
Critics showered them in praise.
Oh, the love.

So, corporations can admit mistakes and survive.
There's no reason to roll over and play dead just to extricate a failed executive.

[j2k4]

Still working on today's first cup of coffee so forgive the mental lapses, but...

-Not buying the CEO/quarterback analogy.
Quarterbacks (and any sports star for that matter) typically have a very small time window in which to perfect their talent before injury or inevitable physical decline renders them unsuitable for duty.

As fond as business is of sports metaphors, it's unlikely that Jack Welch ever faced the possibility of leaving a board meeting on a stretcher, his knee/shoulder/neck permanently mangled.
Furthermore, Mr. Welch could effectively perform his duties from a wheelchair while Tom Brady could not.


You say, "Williams, what about those golden parachutes for failing CEOs?" Paying a failed CEO, or a spouse in the case of marriage, enough money to go away quietly might be much cheaper than litigation.
This seems like an awfully tepid justification for an egregious situation.
"Might be"?
It "might be" easier to throw up our hands when someone is murdered because dammit, it's hard to track down a killer, but that's not what happens, is it?
Why should a corporation "quietly" accept the double-fuck of the golden parachute for the failed executive...fucked once when he proves incompetent and fucked again by having to extravagantly reward him to leave?

Yeah, I get that corporations are loathe to admit failure- "Boy, what were we thinking when we hired that bozo?"- but on the other hand, why would the "bozo in question" be any more anxious to air his failures in public?

Of course, this entire discussion would be moot if businesses would simply wise up and tie executive pay to performance.
If the company does well then fine, rain riches upon he who made it happen.
If the company tanks, then run him out of town on a rail and make sure everyone knows about it.

At this year's CES, Sony took the (almost) unprecedented step of apologizing for their missteps in customer service the past few years.
They essentially took the same advice that Dr. Phil insipidly doles out every day to regular folk- Sony "owned" their mistakes and promised to do better.

And guess what?
Critics showered them in praise.
Oh, the love.

So, corporations can admit mistakes and survive.
There's no reason to roll over and play dead just to extricate a failed executive.


Busyman-

Clocker says it's spin.

Do you stand by your opinion. :whistling

[Busyman™]

Still working on today's first cup of coffee so forgive the mental lapses, but...

-Not buying the CEO/quarterback analogy.
Quarterbacks (and any sports star for that matter) typically have a very small time window in which to perfect their talent before injury or inevitable physical decline renders them unsuitable for duty.

As fond as business is of sports metaphors, it's unlikely that Jack Welch ever faced the possibility of leaving a board meeting on a stretcher, his knee/shoulder/neck permanently mangled.
Furthermore, Mr. Welch could effectively perform his duties from a wheelchair while Tom Brady could not.


This seems like an awfully tepid justification for an egregious situation.
"Might be"?
It "might be" easier to throw up our hands when someone is murdered because dammit, it's hard to track down a killer, but that's not what happens, is it?
Why should a corporation "quietly" accept the double-fuck of the golden parachute for the failed executive...fucked once when he proves incompetent and fucked again by having to extravagantly reward him to leave?

Yeah, I get that corporations are loathe to admit failure- "Boy, what were we thinking when we hired that bozo?"- but on the other hand, why would the "bozo in question" be any more anxious to air his failures in public?

Of course, this entire discussion would be moot if businesses would simply wise up and tie executive pay to performance.
If the company does well then fine, rain riches upon he who made it happen.
If the company tanks, then run him out of town on a rail and make sure everyone knows about it.

At this year's CES, Sony took the (almost) unprecedented step of apologizing for their missteps in customer service the past few years.
They essentially took the same advice that Dr. Phil insipidly doles out every day to regular folk- Sony "owned" their mistakes and promised to do better.

And guess what?
Critics showered them in praise.
Oh, the love.

So, corporations can admit mistakes and survive.
There's no reason to roll over and play dead just to extricate a failed executive.


Busyman-

Clocker says it's spin.

Do you stand by your opinion. :whistling

Sure. I also don't agree with his take on the QB/CEO doohicky.

The piece was simply saying the CEO is the single most important player. The fact that the QB can't perform his duties while in a wheelchair means squatola.

I agree though that a CEO's pay be tied to their performance but that ultimately comes down to something the shareholders and board can fanny about. That comes down to what he said about a business wising up. After all, the company has to kick out all that money even when the company lost billyons. If they are cool with that, more power to 'em.

The selfish bit is hit and miss. While this selfishness can help others (ultimately), it can and does harm others as well.

That part is conveniently left out. Gordon Gecko wasn't totally correct.

I believe the complaints about corporate pay are ultimately stupid unless you are a shareholder of the corporation. It reminds me of complaints about athlete's pay. Buy stock in the company so you can have your say and/or don't attend/watch the games.

Otherwise STFU.

[clocker]

Gordon Gecko wasn't totally correct.

:blink:

I believe the complaints about corporate pay are ultimately stupid unless you are a shareholder of the corporation. It reminds me of complaints about athlete's pay. Buy stock in the company so you can have your say and/or don't attend/watch the games.

Otherwise STFU.
Since corporations don't exist in a vacuum, their successes and failures affect everyone, not just the shareholders.
Similarly, sports franchises are subsidized by taxpayers to the extent that we pay for their venues (at the very least).

For the above reasons, I don't think I'll be STFU anytime soon, thank you.

[Busyman™]

:blink:

I believe the complaints about corporate pay are ultimately stupid unless you are a shareholder of the corporation. It reminds me of complaints about athlete's pay. Buy stock in the company so you can have your say and/or don't attend/watch the games.

Otherwise STFU.
Since corporations don't exist in a vacuum, their successes and failures affect everyone, not just the shareholders.
Similarly, sports franchises are subsidized by taxpayers to the extent that we pay for their venues (at the very least).

For the above reasons, I don't think I'll be STFU anytime soon, thank you.

Not all sports venues are subsidized by taxpayers and if so, that's something for the taxpayer to take up with their government and not one of probably many sports franchises, concerts, and conventions that may hold court there.

The Verizon Center (formerly MCI Center) was built totally by Wizards owner, Abe Pollin, and has revitalized Chinatown in DC in a huuuge way.

One the flip, the National's stadium is partly paid for by the DC government and such dealings were hashed out within that government. What the Lerner Group (Nats owner) decides to pay Chad Cordero has crap to do with the taxpayer. Furthermore, people that complain sometimes tend to be people not even living in the area. Ex. Person A complains about how much Shaq is paid playing for the Miami Heat but they live in Boston.:blink:

Now with corporations, let's amend the shareholders with the employees (which in many cases are shareholders) as well. Now unless this corporation is a utility, whether the corporation has a high priced CEO means nothing. I buy a Lexmark printer. Lexmark has a high-priced CEO. Lexmark printers are shit.....

....I won't buy a Lexmark printer again and Lexmark loses business.:1eye:

Like you said, it's up to the business to wise up and tie pay to performance (which happens a bit with bonuses). How much guaranteed money is up to the business and not government or the buyer of it's products. That's business plan 101 ffs.

edit: and sorry I meant Gordon Gekko.

[clocker]

I wasn't bemused by the spelling so much as the implication that you thought G.Gekko was even partially acceptable.

[Busyman™]

I wasn't bemused by the spelling so much as the implication that you thought G.Gekko was even partially acceptable.
sighhhh...
It was within the context of the paragraph.:ermm:

Bemusement or unacceptability? Whatever.

[j2k4]

Back OT...

Actually, the matter of compensation and it's justification is not properly served by comparisons, and, much as I like Walter Williams, I would (rather) challenge those who take issue with the concept of "astronomic" compensation.

As the example, go ahead and use Jack Welch, ignoring any comparisons.

Granting that there are definitely CEOs and boards who game the system (and who warrant our abhorence), there are others who do not.

What about them? :whistling

[ilw]

i have 2 problems with the situation at present, the first clocker has pointed out (i.e. that if they're getting massive recompense they should accept a fair amount of risk to incentivise them) and the second is that at the top level of a company the people are setting their own wages (or near enough), so you get a back-scratching situation extraordinaire. The same thing happens wth politicians if the media aren't scrutinising, they'll just vote each other raises and expense accounts.

[Busyman™]

i have 2 problems with the situation at present, the first clocker has pointed out (i.e. that if they're getting massive recompense they should accept a fair amount of risk to incentivise them) and the second is that at the top level of a company the people are setting their own wages (or near enough), so you get a back-scratching situation extraordinaire. The same thing happens wth politicians if the media aren't scrutinising, they'll just vote each other raises and expense accounts.

What do you propose be done about it?

Do you think government should get involved?

What clocker said is not new. There are companies that have "wised up".

This was due to shareholders yelling foul since they are directly getting burned if superstar CEO is ultimately Boo-Boo The Fool....and they still have to pay him/her.

[ilw]

i have 2 problems with the situation at present, the first clocker has pointed out (i.e. that if they're getting massive recompense they should accept a fair amount of risk to incentivise them) and the second is that at the top level of a company the people are setting their own wages (or near enough), so you get a back-scratching situation extraordinaire. The same thing happens wth politicians if the media aren't scrutinising, they'll just vote each other raises and expense accounts.

What do you propose be done about it?

Do you think government should get involved?

What clocker said is not new. There are companies that have "wised up".

This was due to shareholders yelling foul since they are directly getting burned if superstar CEO is ultimately Boo-Boo The Fool....and they still have to pay him/her.

I think it would be a pain in the arse to legislate, so i would threaten legislation unless they set up some sort of self regulation or voluntary code. It would likely be a bit shit, but should be better than nowt. Ultimately it should be up to the shareholders to perform the scrutiny, but I don't really have a problem with government intervention for the greater good

[Busyman™]

What do you propose be done about it?

Do you think government should get involved?

What clocker said is not new. There are companies that have "wised up".

This was due to shareholders yelling foul since they are directly getting burned if superstar CEO is ultimately Boo-Boo The Fool....and they still have to pay him/her.

I think it would be a pain in the arse to legislate, so i would threaten legislation unless they set up some sort of self regulation or voluntary code. It would likely be a bit shit, but should be better than nowt. Ultimately it should be up to the shareholders to perform the scrutiny, but I don't really have a problem with government intervention for the greater good

I'm at a loss as to what the government is supposed to be regulating?

Are you actually saying that government should regulating the actual pay of the head's of companies?

There is already regulation of certain things like stock options and such. People have been caught in back-dating scandals already.

I'm just at a loss as to what the government is to do. Are they to approve salaries and bonuses? Are we communist now?:blink:

"No, no, no. That's too much. Lower it by half a mil, lower the stock options by 50%, and make his severence package .2% of the company's net worth upon him leaving....and you can hire Superstar CEO."

The fook?

[j2k4]

I think it would be a pain in the arse to legislate, so i would threaten legislation unless they set up some sort of self regulation or voluntary code. It would likely be a bit shit, but should be better than nowt. Ultimately it should be up to the shareholders to perform the scrutiny, but I don't really have a problem with government intervention for the greater good

I'm at a loss as to what the government is supposed to be regulating?

Are you actually saying that government should regulating the actual pay of the head's of companies?

There is already regulation of certain things like stock options and such. People have been caught in back-dating scandals already.

I'm just at a loss as to what the government is to do. Are they to approve salaries and bonuses? Are we communist now?:blink:

"No, no, no. That's too much. Lower it by half a mil, lower the stock options by 50%, and make his severence package .2% of the company's net worth upon him leaving....and you can hire Superstar CEO."

The fook?

Well done; saves me saying it. :whistling

Fact is, the lid has come off a lot of this stuff, and a wee bit of public disapproval goes a long way, though the incestuous aspect continues to nettle.

The media can ably fill the info-gap (especially given their distaste for big business), and keep public outrage simmering; one wishes they'd learn how to train their sights on liberal politicians, who seem to be wearing some sort of media camouflage.

Government involvement would be an unmitigated disaster.