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'Actionable Intel' in Class War
Every year around Labor Day, United for a Fair Economy (UFE) issues a report on the excesses of CEO pay.
This year's report - Executive Excess 2007: The Staggering Social Cost of U.S. Business Leadership - found that "top executives averaged $10.8 million in total compensation, which is 364 times the pay of the average American worker, a calculation based on data from an Associated Press survey of 386 Fortune 500 companies." (To read the report go to http://www.faireconomy.org/reports/2007/ExecutiveExcess2007.pdf )
Another key finding: The top 20 equity and hedge fund managers raked in an average of $657.5 million, or 22,255 times the pay of the average worker. Meanwhile, the study notes, workers at the lowest rung of the economic ladder just got their first federal minimum wage hike in a decade. Over that same decade, UFE reports, CEO pay has increased by 45 percent.
None of that is very surprising. What's interesting is the finding that compensation for U.S. business leaders now "wildly dwarfs" the big bucks being paid leaders in other sectors.
The top 20 CEOs of publicly traded corporations last year took home, on average, $36.4 million. That's 38 times more than the top 20 in the nonprofit sector and 204 times more than the 20 highest-paid generals in the military.
Executive Excess aims to dispel the notion that excessive executive pay is a necessary function of modern economies. If that were true, the report's authors argue, "business executives that American executives compete against in the global marketplace would be just as excessively compensated as American executives. They aren't. Top executives of major European corporations...last year earned three times less than their American counterparts."
Such grotesque pay differentials essentially mean we, as a society, are discouraging needed leadership talent from entering less lucrative fields, such as education, where we could use an infusion of talent.
The thing I like about UFE reports is they always include pragmatic policy proposals. This year's report offers six:
1.) Eliminate tax subsidies for excessive CEO pay, which would close a tax loophole that allows corporations to deduct excessive CEO pay packages as a "business expense."
UFE estimates that by closing that loophole alone there would be $1.4 billion in extra tax revenues - enough to pay the annual salaries of 29,000 teachers and reduce class sizes in overcrowded schools, the study says.
2.) End the preferential tax treatment given to private investment company income.
That would plug the loophole in the current tax code that allows equity and hedge fund managers to pay taxes at a lower rate than average Americans.
Closing that loophole, the Economic Policy Institute estimates, would add $12.6 billion to the federal treasury, which could be used to fully fund a five-year expansion of the public health insurance program for low-income kids.
3.) Cap tax-free 'deferred' executive pay. Tax-free deferred pay is unlimited for corporate executives but strictly limited by average workers enrolled in standard 401(k) plans.
4.) Eliminate the tax reporting loophole on CEO stock options. Because corporations are allowed to report one set of executive stock option figures to investors and another to the IRS, it allows corporations to get tax deductions that far exceed companies' reported expenses, according to the U.S. Senate Permanent Subcommittee on Investigations.
5.) Link government procurement to executive pay. The feds should deny procurement contracts to firms who pay top executives more than 25 times what their lowest-paid workers make. "The federal government currently denies contracts to companies that foster racial and gender inequality. The same principle could be invoked to deny contracts to companies that increase the nation's economic inequality," the study proposes.
6.) Increase the top marginal tax rate on high incomes. The report notes: "...any move to restore mid-20th century top marginal tax rates would raise substantial revenue for investments in education and other social programs that could significantly broaden economic opportunity."
Indeed, this is class warfare. And as Warren Buffet has noted, his side is winning.
Fellow rat-race runners, arm yourself with information. It won't win the war but like the G.I. Joe cartoons used to say: knowing is half the battle.
Sean Gonsalves is a Cape Cod Times staff writer and a syndicated columnist. E-mail him at sgonsalves@capecodonline.com.
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69 Comments so far
Show All*&&^%^( Of course now it shows NY changed to NJ in my
original post while it gave me an error and did not show
the change previously ---- so ignore this comment and the
previous (I think/guess.)
It really does not matter if there are a few people who cannot be satisfied unless they have tens of billions in wealth of various sorts. What matters is, simply, that those people doing the REAL work that takes REAL attention, at the lower levels, to things most would rather not do, ought to be able to live in reasonable comfort, safety, and security for the work they offer. That takes a living wage, which means a national minimum wage of at least $15/hour plus full single-payer health care plus free education at least through 4-year college for those desiring it. If this situation can obtain whilst the stratos dwellers still make their billions, I'm OK with that. But I believe, in fact, based on what I know of successful European and other countries insofar as allowing all workers to live decently, that such policies will require major reapplication of progressive taxes, elimination of FICA cap, reassigning a great deal of military spending to these programs and the like. But, stratos dwellers, note that while this agenda might impede your wealth accumulation in the short run, it would build such a strong middle class that you would soon see explosive expansion of any business you worked, and you would be back in the chips Big Time. So why don't you get on board with single-payer health care, living wage, free education? You would end up as rich, plus you would live in a social milieu that would allow you to walk anyplace, rather than being sequestered in guarded communities, hiring body guards to protect you from the riff-raf, and the like?
bill peppin
E X A C T L Y !
How many times does it have to be said and in how many ways?
Of course if Faux News reported it 5 times a night for a
year ... their financial support would dry up. Hurray!
(Well maybe not, Rupert has his means.)
"If this situation can obtain whilst the stratos dwellers still make their billions, I'm OK with that."
your "if" is what matters.
the very nature of transaction (re-read my post where i explain this) means your scenario is impossible.
overpay guarantees underpay, period. you CAN'T escape this fact, wishful thinkers, and your pleasure-principle thinking is going to get us all killed and our planet to boot.
I think, once again, my point is "What to do about it?"
Burning Rudy Guliani at the stake for suggesting a flat-tax would be an excellent start, but we need more than that. Bear in mind, any solution has to not simply cycle the expense through the wash... for instance, when you tax corporations, what do they do? Right, they pass the expense right back to the customer in the form of more expensive product. The minimum wage, bless it, suffers greatly from this.
If I had to offer a lsit of suggestions, they'd include the following:
-Buy back PUBLIC utilities. We were fools, FOOLS, to ever allow critical infrastructure to be sold and looted by private entities. That needs to stop, right now, and be reversed as much as possible. Garbage collection, electric production, water purification & delivery, highway mainteance...while we at it, we shoudl go a step further and consider healthcare...we already can't get it, how could it get any worse?...and possibly food production.
-I'm thinking, while we're at it, a nice 10-year term limit on supreme court justices.
-Ditch the electoral college. It's antiquated bullshit that's been maintained specifically as an emergency override of the popular peasant vote. Utter shit, has to go before there can be any real equality.
What else...Ah: Something's got to be done about higher education costs, too. Socialize that while we're at it.
-Ethanol: millitary strikes on Midwest US ethanol plants with USAF jets, if that's what it takes. More expensive corn & no decrease in gasoline costs or dependency on foreign oil? WTF! Quit it!
-Public transit: needs to have about 5, maybe 10 times the budget it does now.
Basically, we need to be more like Europe. Europe is *nice* to their serfs, because they've had enough beheadings in their past to remind the elite that it's a bad idea to oppress the little guys too much.
Humans are destined for history on endless repeat - one bloody revolution after another - until this species learns and teaches that the Golden Rule is stronger than strong, and it is actually your best friend.
Nothing of consequence changes until we all fall out of love with having other-earned money, and make law to restrict personal fortune to the max self-earnable. Money is power.
A little power over you is all power over you. If your neighbor is big enough to beat you up and take your lawnmower, he is big enough to beat you up and take everything you have.
The purpose of life is happiness. Pursue your happiness with every nerve and every second you have! Realize your happiness is inseparable from global sanity and from the happiness of all people. Your happiness and safety are utterly dependent on having people around you who can think rationally, dispassionately. Work to educate your family and friends until at least the bellwethers are clarified in their thinking about money-justice, wealth-justice - then the herd instinct can work for us - once the bellwethers identify the safer pastures. Personal overfortunes must be abolished, and the reason for it taught to every coming generation.
Allowing people to take out more than they put into the pool of wealth cannot be defended by the sane, nor the just.
Think fearlessly, dispassionately, rigorously. Re-test every idea. Be astonishingly heroic. Do it for yourself.
And do not forget that a friend is one who warns you.
This is to comment on the implied idea that in order for there to be adequate development vast quantities of capital must be in the hands of a wealthy few, although development of what and to what end is another matter.
The Global Trap by Hans-Peter Martin & Harald Schumann have shown how the ratings by Moody's Investor Services and Sweden's wealthy capitalists have dismantled much of what had been the world's most famous example of socially just capitalism.
Sweden became a victim of globalization, a world-wide process largely fueled and controlled by the investment class of the United States and the government the citizens of the United States have allowed the investment class to own.
However, it was, and is, not necessary for the mass of capital to reside in the hands of a tiny percentage of a society in order to provide for the needs of that society. When the income of all is high enough, and the society's capital adequately distributed enough, to allow adequate discretionary spending, the masses can provide (should they wish) just as much capital for investment as is now controlled by the Lamborghi-driving, yacht-sailing, multiple-mansion-owning, Riviera-lounging, government-ruling, investment class.
When Sweden's capitalists threatened to take their industries out of the country unless taxes were drastically reduced and which would have caused the impoverishment of the lowest earners, the Swedish government, if true representatives of the masses, could have, and should have, said:
"Fine. Leave. Just leave the factories behind and the workers will still make the Volvos and the Husqvarna's without you. And also, leave behind the billions you extracted from the workers labor over the years. Bye now."
This didn't happen because the Swedish masses didn't adequately control their government. In the United States the flight of industry, outsourcing, downsizing, and increasing impoverishment of the citizens will continue unless the citizens of the United States stop venerating their filthy rich, stop day-dreaming about becoming filthy rich on other peoples labor themselves, awaken from their stupor, and take control of their government as Thomas Jefferson advised.
The majority in the United States really do have the government they deserve: a government that aids those who exploit them. But the vulnerable ones: the children of the ghettos, barrios, and slums of the cities, the children in the grimy mining towns and rural shacks, the children who can only spend a few weeks at a time in any one school as their parents migrate from one agribusiness field or orchard to another, and those adults who've struggled against this exploitative system throughout much of their lives, do NOT deserve this predatory government, do NOT deserve this predatory society, do NOT deserve this socially unjust capitalism.
Money is only an illusion, a concept, and not a true reality. That is why you can send 'billions' of dollars or pounds across the world electronically, instantly destroying economies of nations and persons in the process. You can't send real things like people or food electronically. And money will not call up non-existent goods no matter how many billions you might have, ie, more surface on the planet, or a lightspeed spaceship, or victory in Iraq. It is not truly magic, only treated as such.
It seems ludicrous and tragic that people argue about this mythical construct. Since it is a mythology, it therefore is a religion. But as long as people 'believe in money' or all other people act like they do, then it becomes a controlling principal of society. In the early years of this century, Alan Greenspan and the Federal Reserve 'created' trillions of dollars out of thin air, when Greenspan was the High Wizard of the Golden Calf Money Religion. The US Government now 'owes' trillions of dollars it does not have, so it is thus, with its politicians, the Sampson-like captive of the Golden Calf Money Religion. For it is a religion, that of the Golden Calf. It can't be a fraud, can it? The man behind the curtain says that Money is the Great and Powerful Oz.
How can we be free of the bean-counter priests of this religion? By taking currency back from the bankers and capitalists that have enslaved us with its voodoo. How? For example, sue the Federal Reserve Bank for the harm it has perpetrated in the name of its Money Religion since 1913 and for the benefit of its Banker/Corporatist tribe alone. Every citizen is the plaintiff. Eliminate the 30-year-margin-interest lifetime-debtors-prison- mortgage, cut it to 10. Then, support the government by taxing business doing business on US soil, ie, a progressive tax without deductions on all businesses, just like paying leases on business property. A WalMart ought to pay the most, maybe 50% of revenue, to compensate for community damage everywhere. This would give smaller business equal footing. And break up monopolies as they get larger. Seize the Federal Reserve and print money for every citizen. Or do other things in similar vein.
The first thing to do is recognize that we are not born to serve the Golden Calf Money Religion, but that money is merely an instrument that must serve us all. And that money-as-religion, and as end-all and be-all, must be done away with before it does away with us.
Sincerely,
F Horn
"Eliminate the 30-year-margin-interest lifetime-debtors-prison- mortgage, cut it to 10"
What a brilliant plan! Now, only those who can afford vastly higher payments can get a mortgage, because *you* think 30 years is too long a deal to take. Who appointed you the judge of what kind of deal other people should accept, exactly?
"Wealth is finite"
Sure it is. The first coin minted in Ur 3500 years ago held the value for the entirety of the world's real estate, capital, and wages today.
I suggest cracking an economics book not written by Marx or one of his disciples, and get back to us.
"Can anyone present the sane, sound, reasoned argument why the lesser-gifted, who never chose to be lesser-gifted, should be made to pay the greater-gifted, who sacrificed nothing for the birthgifts, for having been more gifted, for all of their human existence?"
No problem. Neither side got to pick so the luck of the draw is just that. You work peacefully with what you got the same as anyone else, without using what someone didn't choose as a reason to initiate threats against them.
Here you are essentially complaining that your lesser gifted didn't get to choose, but neither did the greater gifted...and you intend to discriminate against the greater gifted for what they did not choose. If your complaint concerning the lack of choice of the lesser gifted is valid, then you are certainly committing injustice against another group who didn't choose either, on the basis that you think it's OK to do so.
Your argument for using one group and not another is fundamentally inconsistent.
threats?
did you mean to post in some other thread where some sort of threats were mentioned, sugar?
Are you claiming all the laws proposed in responses here will not be backed by threats? Or are threats you agree with, OK?
In matriarchal societies everyone is provided for collectively. There are no homeless people, no orphans. And any equivalent of a ceo is only allowed to be a leader based on how well the people live. Not just some of the people...all of the people. Step outside and take a breath of fresh air mtn goat.
Warren Buffett has been saying he pays a lower effective tax rate than his secretary, and those that clean his offices.
Before we tamper with more fundamental aspects of the system, let's start with some basic tax reform, such as those outlined above related to CEOs.
At a minimum, we should be able to agree that if the federal government is going to tax us to pay for the indispendable services it alone is in a position to provide -- the burden should be spread evenly.
The first problem to solve is lax enforcement. Specifically, we have a situation where those that are in a position to enforce the laws as written are those that might be the subject of the enforcement -- or their crucial donors.
Note how negative the press on Putin has been for the last few years? What was his great sin? He had the nerve to begin to bring the tax evading oligarchs to account for their theft.
"In matriarchal societies everyone is provided for collectively. There are no homeless people, no orphans. And any equivalent of a ceo is only allowed to be a leader based on how well the people live. Not just some of the people…all of the people. Step outside and take a breath of fresh air mtn goat."
In matriarchal societies those with greater abilities are used as workhorses to labor by carrying others on their backs under threat. Sorry, I do not support the use of human beings by others against their will.
In matriarchal societies you are free to leave the tribe.
Well that is definitely handy. As long as that is included in any proposed ideas here, that will work. However, I doubt anyone here would permit that. After all, the entire point of seeking State power is to use it against everyone. If you don't want to do this, you don't need it in the first place. I guess I appreciate the sentiment but the same people demanding power will not permit it. Heck, even the UN Convention on Human Rights denies this possibility.
Advocate, PeopleFirst, Xavier Onassis (save yer own asses, heehee), and a few others whose names I've not mentioned (you know who you are :),
I love you people!
"The source of greed is not so much in the taking by greedy people as in the giving of wealth by the many idolaters. "
Correctamundo! How could it be otherwise? We vastly outnumber "them". Always have...
"The source of greed is addiction to sensation, to the sensational; a bigger pyramid, a brighter Las Vegas, a more splendidly glittering court, a greater god, a bigger golden Buddha, more cars in the driveway. The invisible heart that knows peace and happiness and contentment is overlooked. The source of greed is the invisibility of the real.
The source of greed is people's inability to see, feel, experience the invisible. Those who still remember how to experience the real, the inner, the invisible, are detached from seeking idols/images of wealth. They are content with the reality. They have the knack of connecting with the Real. They know the value of sunshine of children of laughter of ease of friends of food of family of rain of grass of water of soil of sufficiency of peace. They are the world's moderates, people of the middle way, the Tao."
Um hum. Yup. Once read that the source of greed is also the desire/lust for *instant gratification*. Something along those lines, which also helps to explain it to me. As for the 'other's, the rest, it seems that they are impoverished, spiritually impoverished, and sorely lacking in i-magi-nation.
Yeah, it sure ain't human nature to behave in such destructive ways. Tis anti-human nature. We, many of us, have become (allowed our selves to be, or agreed to be) corrupted. More's the pity
No wo/man is an island. No justice, no peace. Same as it ever was.
The Golden Rule? It doth rule!
What a marvellous read. Inspires and invigorates me. I'll continue to do as my heart and rational mind dictate. Thank you all,