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Mike, I could let it go at an agree to disagree, but I won't. Consider this thought experiment. Equality of outcome has been magically decreed. One guy, we'll call him Mike, is a hard working teacher at a city college somewhere in the midwest. His income is relatively low, even though he has five advanced degrees in anthropology, history, paleontology, particle physics and basket weaving. He has spent a great deal of effort to gain this knowledge, because all he has ever wanted to do is teach. Another guy, we'll call him Steve, is a technical writer in our nation's capital. Though he has not earned a degree, since he got married and realized he needed a career, has worked very hard to develop one that will provide a decent income for his family. He has no particular attachment to technical writing, though he doesn't mind it. His interests lie outside his career - money has been the primary driver for career. His income is now substantially above the national average.
These two people have made different choices, because, well, they had the freedom to do so. Now the magical income leveler is voted in, and now everyone has the same income, same medical care, same everything. Mike's income jumps dramatically. Steve's is cut in half.
Is it fair because it balances out? Because one person benefitted and one did not? While Mike did not personally come to suburban northern Virginia, and put a gun to Steve's head to get the extra money, his agent the government did. Mike could have chosen a different career path. A man of his clear ability and intelligence could have devoted himself to a career track that resulted in money. He did not. That is not a reason to steal money from someone who did. Do not take this to mean that I believe their should be no government administered social safety net, for those who run into truly bad times. But freedom means you make your bed, and then you sleep in it.
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Straw man, B. Every
Straw man, B. Every conservative loves to think that the "liberals" (whatever they are) want everybody to have the same income. Horse poop. I make more than the average bear, and you do too, in all likelihood. What we're annoyed about is the divergence, beyond all reason, between the rich and the poor.
You have Joe Paycheck making 40k a year, doing task X in a corporation. Then you have the guy at the top making $25 million, while the shareholders are taking a bath. Market forces, you say. Bullshit, I say.
You and I and the SEC and everybody else knows that there is an extremely cosy relationship that has evolved between Board Members and Corporate Officers. This is a "scratch my back and I''ll scratch yours" affair, and the shareholders (the frickin'' OWNERS) are left out of it! Why? Total lack of ethics on the part of most boards.
So what do we do about it?
Simple...we need a law. Not a law that says that everybody needs to make the same thing. That''s silly. What we do need is a simple law that says, you can't be compensated at ridiculous levels, to the detriment of your shareholders.
I think a formula is appropriate.
CC(max) = 5 * EC(average) + FACTOR*Dividend + FACTOR*Max(Market Cap Change, 0)
where
CC is CEO Compensation, or any other executive spot.
EC is employee compensation.
FACTOR is some numerical factor; I have no idea what this should be. Smart people could figure out a nice number.
Here's the thing -- you make a FEDERAL LAW of this Formula. It applies universally in America. Good CEOs who raise the value of their companies, helping shareholders, increasing pay to their employees, can CLEAN UP under this Formula, as well they should!
Bad CEOS won''t find a "special home" with the "pet companies" of their frat buddy board members, where they can idle away their days.
The stock option bonuses that
The stock option bonuses that CEOs receive are the result of just such a law. Put a cap on renumeration for corporate executives, and boards and companies will find other ways to compensate executives. This is the law of unintended consequences. The salary cap resulted in even more perfidious book cooking between boards and CEOs. And, there is no permanent rich and poor in this country. I was poor, now I'm not. This is true for the vast majority of people in this country. The strongest correlation with wealth is age.
In any event, Mike was talking about equality of outcome - I picked income as an obvious target of outcome leveling. Pick any other, and I'll demonstrate that it comes down to theft.