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Tilting at Windmills

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April 10, 2006
By: Kevin Drum

TOUGH TIMES FOR THE BOSS....Sad news today: CEO compensation increased only 16% in 2005. The yacht industry must be worried sick.

Kevin Drum 3:44 PM Permalink | Trackbacks | Comments (101)

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Comments

I guess it will be up to Sen. Kerry & Sen. Kennedy to make up the difference in buying those additional yachts or homes. Thank goodness for the ultra wealthy dems to come to the rescue. Maybe hollywood could through another fundraiser.

Posted by: daveyo on April 10, 2006 at 3:49 PM | PERMALINK

daveyo,
I guess you don't understand sarcasm. It was a 16% increase, not a 16% decrease. The yacht industry is going to be doing just fine.

Posted by: DR on April 10, 2006 at 3:56 PM | PERMALINK

Clearly, we need more tax cuts for the wealthy to stimulate the economy.

Posted by: Don Hosek on April 10, 2006 at 3:58 PM | PERMALINK

Clearly, the Terrorists have already won.

Posted by: Ruck on April 10, 2006 at 4:10 PM | PERMALINK

When you guys have done shooting darts at elephants sitting in a swamp, try to take a course in Economics 101 at your local community college. That will give you a better understanding of the laws of supply and demand and, in this context, the simple idea, that you are somwhow unable to fathom, that a corporation will pay only as much as is necessary, not a dollar more, not a dollar less, to its employees, be it a janitor or the CEO.

Posted by: tbrosz on April 10, 2006 at 4:13 PM | PERMALINK

When you guys have done shooting darts at elephants sitting in a swamp, try to take a course in Economics 101 at your local community college. That will give you a better understanding of the laws of supply and demand and, in this context, the simple idea, that you are somwhow unable to fathom, that a corporation will pay only as much as is necessary, not a dollar more, not a dollar less, to its employees, be it a janitor or the CEO.

Well, tbrosz, you certainly got the not a dollar more part right

Posted by: spaceballs on April 10, 2006 at 4:17 PM | PERMALINK

That was the fake tbrosz, spaceballs. All too often, he's indistinguishable from the real thing, but in this case, he was a little over-the-top. Frankly, the shtick is getting a little dated now.

Posted by: PaulB on April 10, 2006 at 4:20 PM | PERMALINK

One of the best explanations I heard for this phenomenon is the following: a board of directors would never want to admit that their CEO was worth "less than the average" for their industry, so every time they hire a CEO, they pay them above the current average for their industry. A high-paid CEO is a sign of the company's wealth-- boards purchase them as a prestige item, in the same way a middle class family buys a Mercedes.

Posted by: Constantine on April 10, 2006 at 4:20 PM | PERMALINK

That's OK. Every American now making at least 20K per year expects to be a CEO within five years and therefore loves tax cuts for the wealthy. Else, why on earth do they put up with the kleptocracy?

Posted by: Hedley Lamarr on April 10, 2006 at 4:21 PM | PERMALINK

shorter tbroz: I got mine, screw them

Posted by: jerrywexler on April 10, 2006 at 4:21 PM | PERMALINK

I guess it depends on who is counting and how many CEOs they include.

USA Today: CEO pay soars in 2005 as a select group break the $100 million mark

Even after a decade of sharply rising CEO pay, 2005 proved a watershed for a select group of executives. Their paydays or potential paydays broke $100 million. ... Median 2005 pay among chief executives running most of the nation's 100 largest companies soared 25% to $17.9 million, dwarfing the 3.1% average gain by typical American workers, USA TODAY found in its annual analysis of CEO pay.

Its worth noting that after adjusting for inflation the average gain by the typical American worker was zero.

BTW:
I dont know if thats the "real" tbrosz or not, but someone should tell him that we do not really live under hypothetical perfect capitalistic market conditions assumed by economists in Economics 101 to make their jobs easier.

Posted by: Catch22 on April 10, 2006 at 4:41 PM | PERMALINK

tbrosz, real or fake.

Contrary to your naive "analysis" and references to Econ 101,

on every board I have been associated with, the CEO takes control of the Compensation Committee, for the sole purpose of evading the "hand of the marketplace" and supplementing their, um, nest, as it were.

Posted by: Sky-Ho on April 10, 2006 at 4:55 PM | PERMALINK

It is a constant source of amusement to watch loonies use simpleton references to the pure competitive model of the firm to justify abberant market or macro outcomes.

Posted by: kaptain kapital on April 10, 2006 at 4:59 PM | PERMALINK

I think that is wonderful that are economy is doing so well that the ceo's were able to get an additional 16% increase. I think the main stream media should really push this story on how robust our economy is. This of course helps re-inforce that the tax cuts did in fact stimulate the economy. thanks again for re-inforcing the point that the economy is doing great.

Posted by: daveyo on April 10, 2006 at 5:05 PM | PERMALINK

I think that is wonderful that are economy is doing so well that the ceo's were able to get an additional 16% increase. I think the main stream media should really push this story on how robust our economy is. This of course helps re-inforce that the tax cuts did in fact stimulate the economy. thanks again for re-inforcing the point that the economy is doing great.

Posted by: daveyo on April 10, 2006 at 5:06 PM | PERMALINK

Jesus, for the last time -- yachts. are. a. fungible. commodity.

Demand is global and an unexpected decline in the rate of increase in reported executive compensation in a particular country (albeit a major economy in late industrial malaise) will not necessarily have any effect on commodity price risk and executive compensation among today's multinationals is increasingly directed through front companies in countries with more reasonable libertarian regulations -- making absolute compensation levels opaque to unduly interested liberal bloggers such as yourself.

BTW, I can't believe how many of you keep falling for the fake tbrosz

Posted by: tbrosz on April 10, 2006 at 5:13 PM | PERMALINK

That will give you a better understanding of the laws of supply and demand and, in this context, the simple idea, that you are somwhow unable to fathom, that a corporation will pay only as much as is necessary, not a dollar more, not a dollar less, to its employees, be it a janitor or the CEO.

How many of these CEO increased the value of their companies by 16% last year ?

Posted by: Stephen on April 10, 2006 at 5:18 PM | PERMALINK

Oh I am sorry I misunderstood. So to get this striaght, if Sharon Stone, Kevin Costner or Barbara Streisand make $20m for one movie, while others working on that same movie make a few thousand, then that is a bad thing and those who were the top paid and will pay 33% taxes on their earnings should be dealt with. Is this one of those "class dividing issuees"? that I hear about. Should all sports players make the same, etc.. Thanks for clearing this up.

Posted by: daveyo on April 10, 2006 at 5:20 PM | PERMALINK

This of course helps re-inforce that the tax cuts did in fact stimulate the economy. thanks again for re-inforcing the point that the economy is doing great.

From link: "By comparison, median wages increased 3.2 percent in 2005"

Then take into account that average inflation was 3.39% in 2005..

Yeah, those tax cuts really helped.. (See also: record spending deficits and record trade deficits )

Posted by: Stephen on April 10, 2006 at 5:27 PM | PERMALINK

I agree that average inflation was near historic lows at 3.39%, I do not have the double digit figure from Carter maybe you can ehlp me with those. And with record spending deficits and record trade deficits it is amazing that last month our economy added another 225,000 jobs bringing the unemployment rate to the lowest in 10 years and also the highest number ever employed in america. I guess thats why so many (it was quoted today 400 million) wish to be an immigrant to america. Thanks again for the good plug on how strong the economy, people getting raises, low inflation rate. wow. what good news.

Posted by: daveyo on April 10, 2006 at 5:33 PM | PERMALINK

Actually, Daveyo, there's a difference: most movies made by those actors, good or bad, will eventually make money. Between domestic, international, and rental, they make money. The same cannot be said for those corporations laying off people while paying millions to CEOs.

Posted by: Emma on April 10, 2006 at 5:35 PM | PERMALINK

Look, I'd like my pay to be set like a CEO's: A bunch of guys who are friends of mine, who stand to get cushy benefits themselves if they're nice to me, and who have nothing to lose by paying me big, big bucks, decide how much I should make. That's it. No wonder they make so much. It has nothing to do with how good they are, it's all about a fundamentally corrupt system.

And you know how to tell that it has nothing to do with their skill or abilities? Because, if they are miserable failures, they basically get the same kind of money for getting fired and doing nothing.

So don't give me this "market based" explanation. It's bullshit. And the movie star analogy doesn't work. Unlike the compensation committee of a corporation, movie producers aren't giving somebody else's money away, they're fundamentally giving their own, and they only give what the star is worth at the box office.

Posted by: David in NY on April 10, 2006 at 5:44 PM | PERMALINK

"Actually, Daveyo, there's a difference: most movies made by those actors, good or bad, will eventually make money"

Err, actually, no. Most films lose money. A minority of films make *a lot* of money.

Being a venture capitalist and being a movie producer are very, very, much alike.

Posted by: Urinated State of America on April 10, 2006 at 5:49 PM | PERMALINK

Emma, thank you for the explanation. So a movie star who works one or two months producing a movie and gets $20 million gauranteed, whether the picture makes money or not they are worth that. A pro player who makes $250k per game, they are worth it, but a ceo who runs a company is not entitled to stock profits, etc. Alright, well that makes perfect sense. Good luck with your acting career.

Posted by: daveyo on April 10, 2006 at 5:49 PM | PERMALINK

How did the household income of the lowest fith do under Carter vs. Bush (2004 dollars)?


Carter: The income increased from $3152 in 1976 to $4310 in 1980. An increase of 36%!

GWB: The income increased from from $10157 to $10264. A whopping increase of 1.05%

Look at this source.

Posted by: lib on April 10, 2006 at 5:51 PM | PERMALINK

The pay level of the CEO is set by the Board.
The pay level of the Board is set by the CEO.
The stockholders pick up the tab. Anybody who compares this to a free market should be declared legally brain dead and his organs donated to some thinking creature like a cockroach.

Posted by: elspi on April 10, 2006 at 6:07 PM | PERMALINK

Well, if CEO's work as much as the executive vice president and other executive officers of major corporations that I've worked for then the actual amount of "work" they do is close to zero.

Typically they would order some of their underlings to research some issue they've been charged with. Said underlings would also have to come up with several alternative plans of actions with the advantages and disadvantages listed for each one. Then the same underlings would have to make a recommendation as to which plan of action was the best.


The executive officer would then sign his name to it and if it was successful, get all the credit and a big fat raise. If it was not, then the blame would roll downhill and the executive officer would 'merely' get their usual raise and bonuses.

So, other than the kinetic energy expended to sign their names there really isn't a whole lot of work that is done.

Posted by: Dr. Morpheus on April 10, 2006 at 6:19 PM | PERMALINK

At the company I worked for the CEO spent all his time calculating the size of his early retirement package when he sold out the company to a larger competitor.

Posted by: toast on April 10, 2006 at 6:51 PM | PERMALINK
How did the household income of the lowest fith do under Carter vs. Bush (2004 dollars)?


Carter: The income increased from $3152 in 1976 to $4310 in 1980. An increase of 36%!

GWB: The income increased from from $10157 to $10264. A whopping increase of 1.05%

Actually, if you look at the constant (2004) dollars chart, and not the current dollars one, neither did as well as you claim.

Carter managed a slight increase ($9,225 to $9,358) for the lowest quintile (1980 vs. 1976), whereas Bush oversaw a decline ($11,141 to $10,264).

The numbers you quoted were from the current dollars, not the constant (2004) dollars that are adjusted for inflation. The huge increase you cited under Carter was due almost entirely to inflation, rather than being a real increase, and the small increase you cited for Bush was more than entirely an artifact of inflation.

You'll actually note that under Bush, the mean household income in constant dollars in each of the 5 quintiles has dropped, as has the mean income for the top 5 percent. And, for the bottom three quintiles, there was a drop every single year Bush was in office, through 2004 (the last one with data available.)

Posted by: cmdicely on April 10, 2006 at 6:56 PM | PERMALINK

lib,

You're not too bright, are you? The figures you quote are from the "current dollars" table, which does not adjust for inflation, so your comparison is meaningless in terms of purchasing power. The large increases in current dollar incomes during the Carter years reflect the high rate of inflation during that period.

Using the constant (2004) dollar table, we find that the income rise for the lowest fifth over the four years of Carter's presidency was a whopping.....1.4%.

Gee, that Jimmy Carter sure was a great President for the poor, wasn't he?

Of course, there are other serious problems with the comparison you're trying to make. I'm sure you're equally clueless about those too.

Posted by: GOP on April 10, 2006 at 7:06 PM | PERMALINK

daveyo--movie stars and ball players are hired help. So are CEO's. There is a degree of correlation between box office stars and big time pro atheletes. This is called value added. Big time movie stars and big time ball players have negotiating strength, after all, their talents are relatively rare. Furthermore, they usually do not get golden parachutes.

When considering CEO's, this correlative link is broken. Both the good and the bad make out like bandits. There is a well neigh inexhaustble supply of labor, but no downward pressure on compensation. Show me another labor market exhibiting these properties.

I would posit that there is indeed a statistically significant correlation between CEO's and class background.

After all, if the rich don't take care of themselves, who will?

Posted by: kaptain kapital on April 10, 2006 at 7:10 PM | PERMALINK
Using the constant (2004) dollar table, we find that the income rise for the lowest fifth over the four years of Carter's presidency was a whopping.....1.4%.

Which still beats the tail off Bush's −7.9%.

Posted by: cmdicely on April 10, 2006 at 7:38 PM | PERMALINK

Who would have thought that executive compensation is not directly tied to company performance. Apparently, CEOs can be re-elected year after year despite dismal job performance such as voting for the AUMF,Medicare legislation that will drive up the deficit,spending bills divorced from reality,earmarks,etc. Oh,wait,you were talking about public companies with shareholders. I got confused because the performance characteristics were so similar to members of Congress.
Too bad voters and shareholders have to put up with the same thng over and over. Except,wait,each segment has a vote. Well,CEOs are generally overpaid but mine is good. It's those others who are bad.

Posted by: TJM on April 10, 2006 at 7:38 PM | PERMALINK

Today should be declared "Joe Lieberman Day."

Which is to say, it's the day when the rodent emerges from its hole, sniffs around for a prevailing wind, and ducks back underground.

Posted by: koreyel on April 10, 2006 at 7:41 PM | PERMALINK

Green is never a pretty color to be.
Especially for a supposed adult.

Posted by: RW on April 10, 2006 at 7:44 PM | PERMALINK

Using the constant (2004) dollar table, we find that the income rise for the lowest fifth over the four years of Carter's presidency was a whopping.....1.4%.

Which still beats the tail off Bush's −7.9%.

Hey guys, how are those numbers under Clinton?

Posted by: David in NY on April 10, 2006 at 7:52 PM | PERMALINK

Listen, those golf games won't play themselves, you know.

Posted by: mg_65 on April 10, 2006 at 7:53 PM | PERMALINK

"Which still beats the tail off Bush's −7.9%."

But is abysmal compared to Reagan's +6%.

To put it another way, mean household income for the poorest fifth of households increased
over four times as much under Ronald Reagan as it did under Jimmy Carter.

Oh, those horrible Republicans. They're so baaaad for the poor, you know.

Posted by: GOP on April 10, 2006 at 7:55 PM | PERMALINK

And Clinton more than doubles Reagan with over 13%.

Anyway, Bush is president now and his performance, economically and otherwise, sucks. It absolutely sucks. -7.9% I know you guys aren't too sophisticated, but that's called a negative number. Less than zero, you know? Going downhill? Got it? That's Bush for you.

Posted by: David in NY on April 10, 2006 at 7:59 PM | PERMALINK

A lot of people, economists included, don't realize the following: Most CEO pay is not determined by a true free market. In a real market, the buyer must personally sacrifice in order to have something more expensive, and that gives him/her a motive to be frugal. That keeps prices from getting out of hand. But the members of the compensation boards deciding CEO pay *don't pay for that out of their own pockets.* They have no personal stake in saving money; indeed "they are each other's poodles" as even George Will admitted. If they vote for a high salary, they go home with the same money as before, or even more when rewarded later. Don't think that the shareholders can pressure them to cut costs in that area; being elected didn't keep our government frugal either. This point should be disseminated widely.

Posted by: Neil' on April 10, 2006 at 8:05 PM | PERMALINK

"Hey guys, how are those numbers under Clinton?"

Under Clinton, income for the richest quintile grew almost three times as much as income for the poorest quintile (an whopping 45% for the richest quintile, versus 16% for the poorest quintile).

No, wait. That can't be right. Because Clinton is a Democrat and Democrats care more about the little guy. The Census Bureau must have made those numbers up!

Posted by: GOP on April 10, 2006 at 8:07 PM | PERMALINK

Daveyo and like minded:
Movie stars and CEOs are not the same issue. The movie goers are known to want to see so-and-so on screen, and pay mostly so they can do that. Therefore, the Star deserves a large cut because we *know* how directly responsible they are for most of the demand for the product. But CEO's may or may not serve the company and its production to a given degree; it's highly debatable. I buy a car for the car, not for something directly associated with the CEO of the auto mfr.

Posted by: Neil' on April 10, 2006 at 8:10 PM | PERMALINK

Urinated State of America wrote: "Most films lose money. A minority of films make *a lot* of money." That may be, but "most films" includes the huge number of low-budget films that rarely get much publicity, attention, reviews, or anything. But most of the actual box-office dollars, video sales, etc., go to a much smaller set: major motion pictures with big-name actors. The investment prospects there are much better than for "most films."

Posted by: Joel Rubinstein on April 10, 2006 at 8:14 PM | PERMALINK

"Anyway, Bush is president now..."

Bush inherited Clinton's recession. Bush didn't even enter the Whitehouse until 2001, and income for the poorest quintile had already started to decline between 1999 and 2000.

Posted by: GOP on April 10, 2006 at 8:15 PM | PERMALINK

GOP: Reporting mean *household* income increases is a scam. Why? Because as more and more wives work than before, the family's income goes up even as wage levels stagnate or decrease. The thing to watch is, median per hour income (or better, the spread) in constant dollars, which tends to do poorly under Republicans (see DeLong's data. etc.)

Posted by: Neil' on April 10, 2006 at 8:17 PM | PERMALINK

David in NY: And Clinton more than doubles Reagan with over 13%.

Nah, I get 16.4%, but why quibble.

Looks like W's first term -7.9% is even beating his daddy, who only managed -3.5%.

So, 12 years of Dems gives us +18.0%, while 16 years of Repubs gives us -5.8%. Hmmm ...

Posted by: alex on April 10, 2006 at 8:18 PM | PERMALINK

GOP: If it was Clinton's "recession" then why did top quintile income increase so much? Can't have it both ways. In any case, maybe Clinton was too much a Davos-man compromiser, as charged by the real progressives.

Posted by: Neil' on April 10, 2006 at 8:22 PM | PERMALINK

You know, GOP, inheriting a recession and a declining baseline ought to help a guy, making it easier to increase if he follows decent economic policies. But Bush couldn't even make a decent recovery. His negative 7.9% is almost unbelievably bad. It's 9.3% below Carter, for example. It's 13.9% below Reagan. It's over 20% below Clinton. It is completely, unredeemably pathetic. And CEO's are getting 16% raises in a bad year. That's a Republican for you.

By the way, alex, I got my 13+% for Clinton figuring from Bush I's last year, not from the decline in his first year, so my figure may be lower than yours for that reason or I may have made a mistake.

Posted by: David in NY on April 10, 2006 at 8:36 PM | PERMALINK

"GOP: If it was Clinton's "recession" then why did top quintile income increase so much?"

Because recessions tend to affect the most economically vulnerable first.

Income inequality between the poorest and richest quintiles increased dramatically under Clinton, but has stayed relatively constant under Bush. Since you lefties seem to hate inequality even more than you hate wealth, why aren't you attacking Clinton?

Posted by: GOP on April 10, 2006 at 8:42 PM | PERMALINK

GOP: Bush inherited Clinton's recession.

Ah, the Party of Responsibility speaks up.

W: don't blame me, you're poorer because of Clinton. No, really. Just because you got richer when he was in office means nothing.

W: it's not my fault there were no WMD's in Iraq. Faulty intelligence. Just because I'm in charge of all US intelligence operations means nothing.

W: it's not my fault we did such a lousy job after Katrina. No, really. It was a big storm. Nobody had any idea a big storm might hit New Orleans.

W: it's not my fault terrorists hit the WTC and Pentagon. No, really. That memo was kind of vague, and who says you have to be able to read to be president, and Condi didn't read it to me real nice, and I was starting my vacation, and ...

Posted by: alex on April 10, 2006 at 8:44 PM | PERMALINK

"You know, GOP, inheriting a recession and a declining baseline ought to help a guy, making it easier to increase if he follows decent economic policies."

The U.S. economy has been in recovery for two years or so now. The most recent income figures in lib's table are from 2004, and reflect the recession Bush inherited from Clinton.

"GOP: Reporting mean *household* income increases is a scam."

So your pal lib was trying to scam us when he reported mean household income? I agree. I'm just playing along with his stupid game.

Posted by: GOP on April 10, 2006 at 8:54 PM | PERMALINK

OK I admit I made a mistake above in quoting from the right table re. household income.

But as many others have pointed out, the income growth did indeed do much better under Carter than under GWB. That was the point of my post, as someone was crowing about how bad Carter was for the econmy and by implication how good is the economy under GWB. Obviously his claim was demonstrably false.

It's amusing to see the GOP water carriers counter this simple fact by giving excuses for GWB's lackluster econmic performance and even blaming the methodololgy for computing a measure of people's income.

Posted by: lib on April 10, 2006 at 8:54 PM | PERMALINK

GOP moron's only game appears to be "shift the goalposts".

"Lower incomes rose more under Reagan. Wait, they grew even more under Clinton? Okay, what about income inequality? Oh, well then what about..."

Dumbass.

Posted by: haha on April 10, 2006 at 9:04 PM | PERMALINK

"Dumbass."

Fuckface.

Your turn.

Posted by: GOP on April 10, 2006 at 9:09 PM | PERMALINK

Wait, let me shift the goalposts again.

Posted by: GOP on April 10, 2006 at 9:11 PM | PERMALINK

lib,

"But as many others have pointed out, the income growth did indeed do much better under Carter than under GWB."

And much better under Reagan than under Carter.

Posted by: GOP on April 10, 2006 at 9:11 PM | PERMALINK

Anyone know of any good forums for self-hating closeted homosexual Republicans with poor debating skills?

Posted by: GOP on April 10, 2006 at 9:13 PM | PERMALINK

And much better under Reagan than under Carter.

And much better under Clinton than under Reagan or either Bush.

Suck on it.

Posted by: haha on April 10, 2006 at 9:14 PM | PERMALINK

I am completely full of shit.

Posted by: haha on April 10, 2006 at 9:16 PM | PERMALINK

GOP

I only wanted to refute the claim made above that economy has done better under GWB than under Carter. With respect to household income, this claim is false.

Posted by: lib on April 10, 2006 at 9:21 PM | PERMALINK

"And much better under Clinton than under Reagan or either Bush."

Under Clinton, the income of the richest quintile grew three times as fast as the income of the poorest quintile.

If this happened under Bush, or any other Republican president, you'd be screaming bloody murder about growing inequality and how the poor aren't getting their "fair" share.

But when it happens under Clinton, you praise him.

You don't have the even the slightest degree of integrity or honesty.

Posted by: GOP on April 10, 2006 at 9:26 PM | PERMALINK

perhaps if CEO compensation committes included representatives from corporate employees, say 50% worker reps and 50% stockholder reps, with CEO's barred from proposing any reps then maybe CEO compensation would stop rising so absurdly.

Posted by: beb on April 10, 2006 at 9:34 PM | PERMALINK

Geez, GOP, it seems we've got two choices:

A Republican under whom only the rich do better and the poor and lower-middle folks actually decline in income. That is, the working poor end up earning 8% less than they had.

Or, under a Democrat like Clinton, the rich also do well, but so do the poor and everyone else. The working poor end up earning, in real terms, 13+% more than they had.

Now, I ask you, which is better? I think there can be only one answer.

Posted by: David in NY on April 10, 2006 at 9:38 PM | PERMALINK

beb -- Used to be CEO compensation seemed to rise at rates similar to the rates at which worker compensation rose. Now there's no correlation. I've seen it attributed to a couple of things -- the threat of communism, or at least socialism, which kept capitalist greed on a leash, and the power of unions, which would make an issue of excessive compensation to rile up the workers to strike. Both these threats have gone away and corporate governance is verging on being a kleptocracy.

But maybe there are other answers that the wonks have. I doubt that putting a few "workers" on the comensation committee would do much.

Posted by: David in NY on April 10, 2006 at 9:48 PM | PERMALINK

"If this happened under Bush, or any other Republican president, you'd be screaming bloody murder about growing inequality and how the poor aren't getting their "fair" share.

But when it happens under Clinton, you praise him.

You don't have the even the slightest degree of integrity or honesty."

I have the integrity and honesty not to make up shit, the way you do.

Liberals don't object to wealth. Never have, never will. That's just stupid GOP bullshit.

What liberals object to is wealth at the expense of the poor. When both rich and poor do better, liberals are happy. When only rich do better, liberals are unhappy.

Is that simple enough for you, moron?

Posted by: Joel on April 10, 2006 at 10:04 PM | PERMALINK

I like W - everyone gets poorer (except for some high ranking party officials).

Also, he understands that truth is whatever the leader says it is.

Definitely my kind of guy.

Posted by: Josef Stalin on April 10, 2006 at 10:09 PM | PERMALINK

Incredible....OK if we can't blame Clinton for this fucked up situation, lets try going back to Carter to defend the Shrub's booming economy

Posted by: neil on April 10, 2006 at 10:25 PM | PERMALINK

Incredible....OK if we can't blame Clinton for this f**ked up situation, lets try going back to Carter to defend the Shrub's booming economy

Posted by: neil on April 10, 2006 at 10:26 PM | PERMALINK

The number is an average. It includes stock option exercises. Some CEOs did well, others didn't.

From the CNN article (just on the chance everybody didn't click through to the sources):

The Journal, in a report for the paper's Monday edition that appeared on its Web site, said the median total direct compensation exceeded $6 million. Total direct compensation includes salaries, bonuses, restricted stock grants, gains from stock option exercises and other long-term incentive payouts, according to the paper.

The paper said total direct compensation for those running the 10 businesses with the highest shareholder returns grew by 51.3 percent to more than $10.2 million. For those 10 CEOs whose shareholders took the biggest hit last year, the news was expectedly bad those 10 suffered an average 72.5 percent drop in compensation to less than $1.6 million, according to the Journal.

There is no doubt much more in the original WSJ report, but it's only available to subscribers.

Posted by: tbrosz on April 10, 2006 at 11:18 PM | PERMALINK

It includes stock option exercises. ....
Posted by: tbrosz on April 10, 2006 at 11:18 PM | PERMALINK

In the late 1990's (ie. under Clinton) as a "rank and file" employee, I got stock options, and I did damn well. I no longer get stock options as part of my compensation (ie. under the Bush economy).

It fucking sucks.

Posted by: osama_been_forgotten on April 10, 2006 at 11:53 PM | PERMALINK
Under Clinton, the income of the richest quintile grew three times as fast as the income of the poorest quintile.

Under Clinton (2000 vs. 1992), the top quintile's mean income grew to $156,054 from $120,213 (2004 dollars), an increase of 29.8%. The bottom quintile's mean income grew to $11,141 from $9,574, an increase of 16.4%. The former is not even approximately 3 the latter, its not even twice the latter.

Its true that under Clinton, the rich did get richer faster than the poor, which is something of a concern, though when every quintiles income is going up, a slight (the Gini increased from .433 to .462) increase in inequality--mostly driven by a spreading gap between the top two quintiles and the second two quintiles--isn't a pressing problem (indeed, while it would be ideal to see income narrow from the US's relatively high Gini coefficient in the long run, the natural relationship between wealth and risk sensitivity suggests that you ought to see the gap spread during expansions and contract during recessions, as the wealthy should be more exposed to risk than the poor.)

Posted by: cmdicely on April 11, 2006 at 12:13 AM | PERMALINK

And much better under Reagan than under Carter.

Right. Clinton > Reagan > Carter > Bush (either one)

In fact, every President since Nixon has done better than either Bush -- the only two under which every quintile has done worse -- and probably most before, too, but the chart I'm looking at only goes back to 1967.

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Posted by: frerman on April 11, 2006 at 12:43 AM | PERMALINK

"Under Clinton (2000 vs. 1992), the top quintile's mean income grew to $156,054 from $120,213 (2004 dollars), an increase of 29.8%. The bottom quintile's mean income grew to $11,141 from $9,574, an increase of 16.4%. The former is not even approximately 3 the latter, its not even twice the latter."

Right. Under Clinton, the income of the richest quintile increased "only" twice as fast as the income of the poorest quintile. The income of the richest five percent increased three times as fast as the income of the poorest quintile. And the income of the poorest quintile had already begun to decline between 1999 and 2000, long before Bush was even elected, let alone assumed office.

Income inequality grew faster under Clinton than under any other president since at least 1967.

To put it another way, the income gap between rich and poor grew faster under Clinton than under any other president since at least 1967.

Posted by: GOP on April 11, 2006 at 4:50 AM | PERMALINK

"What liberals object to is wealth at the expense of the poor. When both rich and poor do better, liberals are happy. When only rich do better, liberals are unhappy."

What total nonsense. Liberals have been bitching for 30 years that the rich receive a disproportionate share of economic growth, while the poor have not been getting their "fair share" of the benefits, even though incomes have risen across the board.

Posted by: GOP on April 11, 2006 at 5:04 AM | PERMALINK

"Its true that under Clinton, the rich did get richer faster than the poor, which is something of a concern."

Oh please. A "concern."

If someone in the bottom quintile had been making $20,000 when Clinton took office, his income would have risen a measly $3,200 by the time Clinton left office.

But if someone in the top 5% had been making $3,000,000 when Clinton took office, his income would have risen by an astounding $1.4 million by the time Clinton left office.

If anything like this happened under Bush or any other Republican you'd be jumping up and down in rage and screaming for economic "justice" for the poor. But because it happened under Clinton, you ignore it.

You're just a bunch of hypocrites who have one set of standards for Democrats and another set for Republicans. It's no wonder even your own party tries to dissociate itself from you. You have no credibility.

Posted by: GOP on April 11, 2006 at 5:34 AM | PERMALINK

And remember where that 16% is coming from-reduced pension and healthcare benefits for regular employees.

Posted by: bob h on April 11, 2006 at 5:40 AM | PERMALINK

Don't call people hypocrites, GOP, until you've addressed the following, which you have convieniently ignored:

Geez, GOP, it seems we've got two choices:

A Republican under whom only the rich do better and the poor and lower-middle folks actually decline in income. That is, the working poor end up earning 8% less than they had.

Or, under a Democrat like Clinton, the rich also do well, but so do the poor and everyone else. The working poor end up earning, in real terms, 13+% more than they had.

Now, I ask you, which is better?

Posted by: David in NY on April 11, 2006 at 8:12 AM | PERMALINK

David in NY "Now, I ask you, which is better?" with such a fantastic leader as Clinton, why did the d's loose both the house and senate and are now permanaently the minority, with no chance of regaining the house or senate. What is wrong with those 80% of the counties in America that voted for George W. in 2004. What is wrong with those who vote overwhelmingly to continue to have a r house and an r senate? Is it possibly that no one on the d side is able to get out your message of how great of job the d's did when they had congress, senate and the white house when Clinton went in, but then lost all three under his leadership?

Posted by: daveyo on April 11, 2006 at 8:54 AM | PERMALINK

Just answer the question.

Posted by: David in NY on April 11, 2006 at 9:00 AM | PERMALINK

The CEO of Exxon-Mobil is compensated (I will not and cannot use the word 'earned' in this context) $13,500 an HOUR.

That's more than a minimum wage earner makes in an entire year.

Reeling in disgust.

Posted by: CFShep on April 11, 2006 at 9:04 AM | PERMALINK

I agree that average inflation was near historic lows at 3.39%, I do not have the double digit figure from Carter maybe you can ehlp me with those.

Newsflash: Carter isn't president anymore. Inflation under Nixon\Ford wasn't too good either. Annual inflation was lower than %3.39 under Clinton, and was frequently higher than
that under Reagan\Bush Sr.

But, enough history lessons, the point is: if the median income growth (%3.2) is less than inflation (%3.39) then people are losing purchasing power (not a sign of a good economy).

And with record spending deficits and record trade deficits it is amazing that last month our economy added another 225,000 jobs bringing the unemployment rate to the lowest in 10 years and also the highest number ever employed in america.

Amazing what you can do when you max out the credit card.

Posted by: Stephen on April 11, 2006 at 9:23 AM | PERMALINK

"And with record spending deficits and record trade deficits it is amazing that last month our economy added another 225,000 jobs bringing the unemployment rate to the lowest in 10 years and also the highest number ever employed in america."

How many of those jobs were private sector jobs?

Posted by: Joel on April 11, 2006 at 9:34 AM | PERMALINK

Under Clinton, the income of the richest quintile grew three times as fast as the income of the poorest quintile.

There you go again, shifting the goalposts. Talk about a complete lack of integrity or honesty, if income growth under Reagan was as good as Clinton, you'd be crowing your head off with no mention of income inequality.
Now all of a sudden, there's a big concern from the GOP mentally disadvantaged. By all means, continue arguing with your liberal strawmen. You just make yourself look like a more pathetic and stupid hack each time you avoid the facts.
Income for all people grew more under Clinton than Reagan.

Keep sucking on it.

Posted by: haha on April 11, 2006 at 9:41 AM | PERMALINK

It seems to me that the rising disparity in corporate incomes between highest and lowest can be traced back to about 10 years ago, when it became fashionable to link CEO compensation directly to stock value increases. In a very tangible way, a CEO could direct his own compensation by producing profit. Unfortunately, it is very easy to raise profits in the short-term, but sustainability goes out the window. All you have to be is willing to make the "hard" decisions. Scenario: CEO raids pension fund to build offshore facilities, utilizing inferior, cheaper labor. Short-term profits go up, often dramatically, and CEO pockets windfall. Within decade, product is no longer viable because the quality is gone, but so is the CEO. And the unfunded pensioners-- Congress/Bush provides exemptions and the taxpayers pick up the tab, now much reduced.

My first computer I bought in 1986, a Leading Edge Model D, and I rode that sucker for over a decade. Now I'm lucky to get 3 years out of a computer before the hard drive fries.

Jim C.

Posted by: Jim C. on April 11, 2006 at 9:45 AM | PERMALINK

Check out yesterday's Wall St Journal for an analysis of executive pay in a sample of 350 american companies and a discussion of trends in executive pay.

Counting various elements of executive compensation, median compensation increased 15.8% in '05 after increasing 40.9% in '04. Many of the executives are making astounding amounts of $.

In one sense there is a market logic to executive pay, as corporate profits are up 13%in '04. However, to me at least there are serious issues relating to the sheer magnitude of executive compensation as well as the gulf between executive pay and pay for other workers in the same corporations. This isn't an issue in some high-flying financial co's such as Goldman Sachs where everyone does very well. However, in other co's I don't see the logic in treating executives as a super-privileged caste while nickle and diming the people that really create value for the co.

Posted by: Aidan on April 11, 2006 at 10:47 AM | PERMALINK

What I really want to know too is how many of these jobs were public?

Posted by: marcus on April 11, 2006 at 12:20 PM | PERMALINK

What liberals object to is wealth at the expense of the poor. When both rich and poor do better, liberals are happy. When only rich do better, liberals are unhappy.

What a bald faced lie. If you're "happy" as long as both rich and poor are doing better then you have no reason to complain when the rich get richer faster than the poor get richer. But that's exactly what this thread is all about, the claim that CEOs don't "deserve" their 16% rise when working people are only getting 3%.

GOP is right. You're hypocrites.

Posted by: Daneman on April 11, 2006 at 12:47 PM | PERMALINK

Daneman: your reply is a typical fallacy of reductio along the continuum. If a person implies that they have no complaint when everyone "does better" (say, all quintiles get 10% more than before - assuming we though the distribution was fair enough to begin with), but complaines in a case where CEOs get 16% more but the rest get nothing, then there is a grey area where we have to make a judgment call about *how much* difference is undesirable. Or, do you really think that "one drop" worth of movement towards a given ideal must be OK?

You are as dumb/fraudulent as those who beg the question that if we raise the minimum wage from 5.15 to 7.50, then why not raise it to 10, 50, etc. The same kind of intellectual fraud could be used to keep us from changing *anything* for which we had to pick some new number! That's my biggest beef about conservatives and their symps: not the meanness and loyalty to the plutocracy, but the intellectual fraud.

Posted by: Neil' on April 11, 2006 at 1:08 PM | PERMALINK

Correction: To
"...assuming we thought the distribution was fair enough to begin with), but complains in a case where CEOs get 16% more but workers get only 3% more, then there is a grey area where we..."

Posted by: Neil' on April 11, 2006 at 1:19 PM | PERMALINK

When the "Invisible Hand" is biased

But according to an insightful article Monday in the New York Times, many corporate leaders appear to be benefiting not only from the invisible hand of the free market but also from the invisible hands of so-called independent "compensation consultants" -- a group of advisers who, according to the Times, are often anything but independent.

http://www.cjrdaily.org/the_audit/why_ceos_get_paid_the_big_buck.php

Posted by: Catch22 on April 11, 2006 at 2:07 PM | PERMALINK

Neil,

Joel said:

"When both rich and poor do better, liberals are happy. When only rich do better, liberals are unhappy."

A 3% rise is "doing better," so, according to Joel, liberals should be "happy."

You can't have it both ways. Make up your mind, hypocrite.

Posted by: Daneman on April 11, 2006 at 2:13 PM | PERMALINK

A 3% rise is "doing better,"

It's not better when inflation is 3.3%.

Posted by: Stephen on April 11, 2006 at 2:18 PM | PERMALINK
The most recent income figures in lib's table are from 2004, and reflect the recession Bush inherited from Clinton.

The recession that began and ended in 2001 is not the problem; the incomes fell for each of the three lowest quintiles every year of the "recovery" after that recession, and while the richer did somewhat better, even the two higher quintiles didn't do well on the whole (IIRC, the top 5% did better -- its not that there has been no one doing well in the Bush economy its just that the rewards are even more focussed on the rich than is usually the case, and instead of everyone else gaining less, as generally happens, most everyone else is doing worse.)

Having a Bush -- and only a Bush -- in the White House makes almost everyone poorer. Its one of the clearest correlations in the last 3 decades. Results by Presidential party are mixed (Clinton best, but Carter worst, with the non-Bush Republicans in between), results by Congressional majority are mixed (Republican majority under Clinton -- good; Republican majority under Bush II -- bad; Democratic majority under Reagan [or briefly under Clinton] -- good; Democratic majority under Bush I -- bad).

Posted by: cmdicely on April 11, 2006 at 4:57 PM | PERMALINK

I've been trying to get an answer to this from the trolls all this thread:

Don't call people hypocrites, ... until you've addressed the following, which you have convieniently ignored:

Geez, ... it seems we've got two choices:

A Republican under whom only the rich do better and the poor and lower-middle folks actually decline in income. That is, the working poor end up earning 8% less than they had.

Or, under a Democrat like Clinton, the rich also do well, but so do the poor and everyone else. The working poor end up earning, in real terms, 13+% more than they had.

Now, I ask you, which is better?

I'm a liberal. I clearly think the second, under Clinton, was better. In fact, I have not a doubt about it. OK, trolls, your turn. Which is better? And don't call me a hypocrite.

Posted by: David in NY on April 11, 2006 at 5:06 PM | PERMALINK

"The recession that began and ended in 2001."

A recession is two successive quarters of negative GDP growth. The failing economic conditions that cause a recession obviously predate it. The failing economic conditions began during Clinton's presidency, before Bush was even elected. One of the symptoms of those failures was the decline in income of the poorest quintile between 1999 and 2000, under the Clinton Administration.

Repeat after me: The gap between rich and poor in America grew faster under the Clinton presidency than under any other presidency of at least the past 30 years.

Posted by: GOP on April 11, 2006 at 6:21 PM | PERMALINK

Still don't have the guts to answer the question, do you GOP? Lily-livered we used to call jerks like you. Chiken-shit. Go ahead. Give an answer. You are too chicken to do it.

Posted by: David in NY on April 11, 2006 at 8:47 PM | PERMALINK

David in NY,

Repeat after me, you chicken-shit, lily-livered jerk:

The gap between rich and poor in America grew faster under the Clinton presidency than under any other presidency of at least the past 30 years.

Posted by: GOP on April 11, 2006 at 9:07 PM | PERMALINK

David in NY,

Repeat after me, you chicken-shit, lily-livered jerk:

The gap between rich and poor in America grew faster under the Clinton presidency than under any other presidency of at least the past 30 years.

Posted by: GOP on April 11, 2006 at 9:12 PM | PERMALINK

If you think CEOs are paid too much, that means that they are taking money away from the stockholders, the owners of the company. That is only possible because of the separation of management and ownership. All the talk about fixing this by restoring "shareholder democracy" is foolishness, because most shareholders view themselves as owning a piece of paper, a share of stock, not as part owners of a business, and it's far simpler and far more profitable in the long run to just sell and buy shares in another company if you think management is feathering its nest at the shareholders' expense.

There is a simple solution to this problem, however. Just get rid of all the laws that either prevent hostile takeovers or make them prohibitively expensive. Outlaw poison pills and staggered boards of directors. Repeal the Williams Act. The result would be that overpaid CEOs would attract raiders who could fire all the overpaid managers and replace them with managers who are paid a reasonable salary and the raiders - as the new owners - would keep the difference for themselves. That should make you all very happy.

Posted by: DBL on April 12, 2006 at 12:31 AM | PERMALINK

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Posted by: dfsdfsd on April 12, 2006 at 9:39 AM | PERMALINK




 

 

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