The above article was fairly straight forward with commentary on the graphs and charts that followed. It is well worth a look. One guy’s comment (Nick) got ‘featured’ and that set off a lot of comments. I replied… and so did a lot of others. I have taken a select few and also copied my replies to Nick’s comment on the story. Enjoy!
First two of my comments :
@Nick: CEO Pay, no matter what the flimsy ‘reason’ behind it is excessive and a leading cause of the economic collapse. They produce little to nothing – they only take credit for the profits produced by the workers. The workers deserve more of a share of those profits they create. Then we can continue to be the engine of our economy. (see chart 15)
Lehman Brothers collapsed the name and split up to it’s holdings – like Barclays, Neuberger Berman and others. They are not gone, not punished – in fact, not paying their bills because they declared ‘bankruptcy.’ Merrill Lynch is active as ever. Don’t try spreading lies that a quick google search will disprove. But, basically you are saying that the banks have taken our money and don’t have much of it left after gambling it all away… I don’t think that gets them off the hook.
Tax Equality – Okay, the top 20% pay 64% of taxes while taking “only” 59% of all income and having “only” 83% of all financial wealth and 73% of ALL net worth. 20% have over 80% of all the money. Sorry, not going to feel one drop sorry for them paying 64% of taxes – they should be paying 70% at least. Of course, if we, the working class, were paid better, then we would, by default, pay more of a share of taxes.
You want to know why the economy is in the tank? Look at chart 17. The top 1%’s share of pre-tax income has skyrocketed. They are leeching all the money out of the economy. They don’t spend nearly as much of their income as the lower brackets do, so it is effectively out of the economy. The less the Middle Class and poor’s shares get, the less the leeches have to live off of. In classic parasite mentality, they are not going to stop sucking until the host is dead… and we almost are. To save ourselves, we have to either get rid of the leeches totally or they can start taking less of the money supply.
the eye said, “Yeah and how much of the risk did the labor force take in investing in that company (YOU failed to mention that–oh and the answer is ZERO)
Not true in any sense. How much of the risk did the labor force take? A heck of a lot. They accepted a job there. We have bills to pay, mouths to feed and we are trusting that the company will provide fair compensation for a hard day’s work – and that it will not be a flash in the pan company that fails and leaves us holding our hats and out of a job. Saying that employees take no risk is sheer stupidity. That is why we work so hard to make the company successful – we like having an income, we like having a job. We just want a fair share of the profits we produce.
Your idiotic mentality is one of the major problems in this country – we are not interchangeable.
Still, the problem is NOT the owner making a lot more than the average worker – although they should feel like Mr. Henry Ford that making 40 times what an average worker makes is indecent. The problem is with the CEO – same zero ‘skin in the game’ as any other employee – is making close to 300 times what an average worker makes. And, when the CEO drives the company to failure, they get golden parachutes and are actually REWARDED for destroying jobs of people who have given their lives to the company.
I agree Labor doesn’t create 100% of profits – but its at least 80%. How are you doing to do much of anything without labor?
No, it may not be our money, but it is our labor, our effort, our sweat and our time. Even if a CEO set new policies, the benefits are created by the labor that carries them out and implements them. So, in your example, the CEO may have earned $50 million, but $50 million should go to those who actually did the work.
In the end, the income inequality is what is hurting the overall economy – it is simply not sustainable. Businesses that aggravate the inequality are, in the end, hurting themselves as well.
Now, other people’s comments!
Ron R on Oct 13, 6:08 PM said:
@Nick: @ Nick:
Well, as one of those baby boom entrepreneurs who started a technology company (manufacturing specialized instrumentation in the US, believe it or not), I call BS on your CEO salary rationalization.
The top end incomes being referred to here are not those of entrepreneurs who are creating things and increase total wealth- they are the incomes of those in the financial services sector, who are overwhelmingly engaged in a speculative zero sum game, and only make money if someone else loses.
Makers grow the economy and create jobs, speculators don’t grow anything, and when they create a bubble and drive prices up to the point of collapse, or falsify what they are selling- as happened recently- they actually destroy opportunity for the rest of us. A small financial sector is important for liquidity, but ours has grown far out of bounds (from about 10% historically to well over 35% of all business profits recently) and this is hurting our long term economic prospects. When your best and brightest are going into investment banking or bond trading rather than engineering or research (because that’s where the easy money is), something is very sick in the economy. Gambling is not a basis for a healthy economy.
Of course the rich pay a slightly higher percentage of their incomes overall in taxes than do the poor- though the differential is much less now than it has been historically. Top marginal rates were vastly higher during our strongest growth years, WWII to 1980. This enabled investment in infrastructure and human capital, like education. When I was in college, tuition at state schools was essentially free- if you could get in and do the work, you got an education. After 40 years of tax cutting, national and state, this is no longer the case. As the charts show, we now have the lowest social mobility among advanced countries- over generations, that hurts America both economically and socially. Ultimately, it hurts the rich. Companies like mine, who need a strong middle class to create demand, already feel it.
rnoonan440 on Oct 13, 11:09 AM said:
@Nick: 30 Years of Wealth Redistribution
There has been a massive “wealth redistribution” that has gone on for the last 30 years. The top 1% now controls over 42% of all of our nation’s wealth and the top 10% now controls over 70% of our entire nation’s wealth. The bottom 50% only control a meager 2.5% of all of our nation’s wealth. How did this happen?
30 Years of Ballooning Executive Salaries/Stagnate Middle Class Salaries:
The middle class spends their wealth on goods/services and the corporations make a profit off of that spending. The corporations have redistributed middle class wealth by paying the majority of their profits all out to the executives and shareholders. The middle class has been getting less and less of a share of the corporate profit pie.
Middle class wages have stagnated for 30 years while executive wages have gone up 256% in since 1980. Even last year executive compensation went up another 11%. The top 1% now controls over 42% of the entire nation’s wealth. We have not seen numbers like this since the great depression. The top 10% controls 70% of the entire nation’s wealth. All of our nation’s wealth has been redistributed into the hands of the few.
Wages were Replaced with Easy Credit/Loans:
The middle class was roped into replacing wages with easy credit. So instead of paying people living wages, corporations fooled us into thinking we were doing well and could afford things by giving us easy credit instead of wages. Instead of having wages to buy t.v.’s, furniture, etc. we were given easy loans. So the middle class became a debtor class.
Loss of Tax Disincentive Against Paying out all Profit to the Executives & Shareholders:
There used to be a tax disincentive to paying out all of corporate profits at the top because in the 1950’s income was taxed at 90% over a certain amount money and now that tax disincentive has disappeared. In 1950’s the highest marginal tax rate was 90%. In 1960-1970’s it was 70%. In 1980’s it dropped to 49%. In 1990’s dropped to 39%. Under George Bush it dropped to a mere 36%. We have had over 30 years of massive tax cuts for the wealthy.
There is now no tax disincentive to paying out all of the corporate wealth at the top. And there is no employee bargaining power because now less than 12% of all of our jobs are unionized. Corporate profits are at an all time high, healthcare company profits are at an all time high, and oil profits are at an all time high. We don’t have a healthcare crisis we have a healthcare company profit-taking crisis that no politician will doing anything about. Healthcare and oil companies have enjoyed a decade of record profits while we have had a decade of massive premiums for little coverage and a decade of outrageous gas prices.
The problems are: 1) deregulation of the banks by the Republican-controlled congress in 1999; 2) hedge funds are exempt from regulation; 3) tax system no longer has a disincentive against paying outrageous executive salaries (highest marginal tax rate has dropped from 90% to 36%); 4) commodities market is exempt from regulation (Republican-controlled Congress exempted it in the Commodities Future Modernization act of 2000); 5) the Supreme Court has ruled that corporations can spend unlimited funds in campaign elections (thus politicians on both sides favor the wealthy/corporations) and 6) the rise of corporate/billionaire propaganda media “news.” Because of the need to raise massive sums in politics today, we no longer have a party that represents the people. The Democrats have to chase the corporate and big money donors too.
What can we do about this: 1) re-instate Glass-Steagall Act regulating the banks; 2) regulate hedge funds and the commodities market (because the commodities market is not regulated speculation has caused prices for commodities to go through the roof); 3) get rid of the money in politics (have federally funded elections with clear limits on spending and no outside groups allowed to have ads); 4) get rid of 1980’s laws stating that corporations’ only duty is to maximize shareholder profits; and 5) regulate “news” channels and newspapers (no more “slanted opinion news” masquerading as hard news) and reinstitute the fairness doctrine across all news outlets to ensure that both sides get equal time.
Corporations should have duties to society and to their workers too. They should have to balance their duties to maximize shareholder profits against their reinstated duties to their employees and to society. The laws saying that corporations’ only duty is to maximize shareholder profits have led to the destruction of long-term business plans and care for their workers and have created short-term profit monsters at the expense of workers and society.
Philip Lee on Oct 13, 3:32 PM said:
@Nick: Aw…The poor rich. They sound like they need a hug right now.
Really? That’s not the point. If the rich are so upset about being taxed so much…Hey! Here’s a thought! How about they LOWER THEIR SALARY! Let me explain to you how this works: They lower their salary, they get into a lower tax bracket. Payroll at a company says “Look at all this extra money we have to reward the workers!” who are doing ALL of the work, or else that CEO wouldn’t even have a job. The lower 99% Then get up into those higher tax brackets and get charged more in taxes! Hell…They might even create more jobs because more people would be spending, meaning companies would have to produce more.
Call me crazy, but your argument for the rich falls short.
What would happen if people quit buying things that make these corporations so rich? That is what no one ever thinks about. You need a middle class to buy things in a consumer-based society…It’s really just common sense based economics. The focus has been put at the head’s of these organizations as the reason why the economy exists, but I say if the 99% refused to go to work and started learning to exist on a bartering system with each other, the upper 1% would be the ones out of work. What the upper 1% needs to understand that their kind have always been expendable at the hands of the masses, and revolution has always been an option. I guess the upper 1% need to figure out what is more important to them: Their money or their future?
Chelsea on Oct 13, 5:31 PM said:
@Nick: You fail to see that the quality of life of the rich does not go down if they get taxed more. They can still eat, own several houses, cars, see doctors regularly, and send their kids to Ivy League schools.
A Christian person sees this as one of the seven deadly sins, greed. We have a culture that revels in buying the newest, the best, the most expensive. But take a step back and see what things the rich use their money for: it’s primarily “getting stuff.”
I realized that everyone should have the freedom to buy whatever things they wish. However, the current state the country is in only allows that freedom to the rich…while the rest of the country struggles with impossible decisions between buying food and paying rent.
I’m not jealous of the rich. I have never once wished to be rich. And most of the people upset with the way our country is run also do not want to be rich.
They want to live in a country where they can earn enough money to live, and be able to save up a little extra money for starting a family.
You have to ask yourself a moral question: while corporations and millionares certainly have a right to their money, does someone making $2M a year really need $1M as much as someone making $20K per year needs $10K? Do you support someone’s right to have superfluous amounts of money over someone’s right to eat a halfway decent meal, a livable place to sleep, or a yearly doctor’s visit?
How much do you value a human life?
Phillip Shen on Oct 13, 6:34 PM said:
@Nick: I call BS to Nick’s post.
Let’s go through your contentions 1 by 1.
RECORD CEO PAY:
“They want the best and the brightest and the surge in demand made it very competitive in rounding up the talent to successfully manage the business you built with you blood sweat and tears”.
Former Home Depot CEO Bob Nardelli got a $210 mil severance package after ruining Home Depot’s stock. Carly Fiorina got $45 million after screwing up HP.
Let’s not go into all the bonuses that AIG and other Wall Street firms gave at the end of 2008 after the blowup. The list goes on and on. Look, I’m pretty sure there are great CEOs out that get paid very well and don’t screw the company, but here’s the issue that folks like I have: there’s no penalty for poor performance (please don’t say being let go of the company with such a huge severance package is punishment. If that’s a punishment, smeg, I want a million dollar severance package too!). Additionally, it’s not ONLY that the pay is so disproportionally large compared to your average worker, it’s that the average worker’s wage has hardly gone up at all — yet US work productivity HAS gone up these last 30 years. I highly doubt all that productivity has come exclusively from the executives. That is what people are frustrated about when people mention CEO pay.
“People scream about the taxpayer money bailing out banks and totally ignore that the people who paid the most in taxes toward that bailout were the bankers themselves. Thats right, the 1% pays the most taxes.”
You’re missing a big point here. People weren’t only angry at the bailouts because they thought only their money was used to bail out the banks. People were angry because 1) These motherf****ers nearly destroyed the world economy, 2) ANY money at all was used to bail these motherf***ers out, 3) none of these motherf****ers paid any price for being saved. No indictments, no arrests, nothing except golden parachutes and a dog-and-pony show for a few days in congress (where they all basically feigned ignorance). Hell to THIS DAY, none of these motherf***ers even THOUGHT they did anything wrong.
Saying that “oh, most of the money bailing the banks out didn’t come from the 99%!” doesn’t cut it. Yeah, most of the taxpayer money may have come from the 1% — but guess what? It seems to have gone back to the 1% to keep them afloat!
Some people may want to pull a Rick Santelli and blame the 2008 crisis on the uninformed homeowners who took on NINJA loans. And yes, ignorant homeowners certainly deserve some of the blame for not knowing better. But that is missing an even huger point. Who offered the NINJA loans to begin with? Greedy brokers who wanted to a large throughput of mortgages. Who confounded the situation by making ridiculous complex CDOs and CDSs? The big Wall Street corps.
Who approved of these junk CDOs with AAA ratings? Why, all the ratings agencies. All of these confounded an already bad situation, and this confounding wasn’t the fault of dumb homeowners. It was this huge swamp of CDO and Credit Default Swap upon Credit Default Swap that nearly brought the economy to its knees. I don’t give a f*** if it was legal or within the law — it certianly wasn’t ethical, and people should have known better. And yet they go on TV and into town halls and blame people that they themselves tricked into buying homes. THAT’S why we hate these motherf***ers.
“How can the people who contributed the least to the bailout gripe about it the most? … The rich don’t pay their fair share? Spare me. They pay the biggest and most disproportionately large share of anyone. “
You might as well just come and out and tell us to eat f***ing cake. Look, for you guys to pull out the card and say “hey look, we’re already paying a lot!” doesn’t cut the fact that you may be paying a lot, BUT YOU’RE NOT PUTTING MUCH BACK INTO THE SYSTEM EXCEPT FOR YOURSELVES. I don’t see jobs being created, no sir. I don’t see a lot of investment into things that help the middle and lower classes, no sir. The 99% didn’t exactly bounce back after 2008, did they? Not like the 1%, not by a long stretch. I certainly don’t see the 1% having to tighten their belts to afford just basic necessities like the middle and lower classes have. As Henry put it in his graphs, the rich are doing pretty damn well while the rest of the country’s wages are stagnant.
You’re not feeling the economic strain — we are.
You tell us “stop being lazy, get a job!”. Well hell, that would be easy if there were jobs were plentiful to get! For every 1 position there’s 7 people looking. You may say “how about get a lower paying job and just bite your lip”. Well, how about you skip out on a new yacht for a year and just bite your lip and pay your damn fair share in taxes? This sense of entitlement is killing me. You guys are treating the rest of us as if we had it so well and as if you guys are having it so rough.
So that’s why people are out in the streets, that’s why people are angry, and that’s perhaps something you’ll never understand unless you were once poor or struggling yourself. Go find a politician to lobby instead of trying to defend yourself on a website.
Another Nick on Oct 13, 7:43 PM said:
@Nick: The problem with numbers
As Nick clearly demonstrates, numbers don’t reflect day-to-day reality and can be interpreted many ways. Nick sees two bar graphs, and assumes that the top 20% are paying more than their fair share of taxes, because as he sees it, they pay a bigger percentage in taxes than the percentage of the nation’s wealth
they control. What he ignores, however, is that the percentage they control is 14 times the percentage paid in taxes. So hmm… basically… someone with a dozen candy bars, gives the system which we all depend on and benefit from HALF a candy bar. While the other four people who only have a QUARTER of a candy
bar per person, give up half together. (Candy Bars stand for portions of the economy in this metaphor) Yes… the rich pay their fair share… in irrational numbers land!
Ceo’s and Owners
Secondly, when we talk about those CEO’s and Owner’s “earning” it. Exactly how did they do that? Administration? Wow… administration REALLY produces products, oh wait it doesn’t. Labor does that. Right, so the people that MAKE things of value… they get far less than the people who sit back and go
golfing all day while the rest work. Right. Again… makes perfect sense. Oh, did I forget to mention their idea of administrating business is shell corporations hiding debt, and exporting jobs over-seas, while dodging corporate taxes, all to increase value to share-holders, none of which in this scenario actually personally work to produce anything of value to the world.
Bailout of the banking system.
Money is an imaginary commodity. It’s invented wholesale from thin air at this point, and distributed through banks to facilitate trade. The Banking system is given a great deal of trust to store and manipulate this imaginary commodity into greater value for all. They failed. Terribly. You see, money is only WORTH something when it’s being traded. It’s a place-marker for value. I give you this, you give me money, later I will give this money out to someone for something I desire. In a perfect world, this is how simplistic and functional money would be as an imaginary marker holding value. Unfortunately, people don’t treat money like it’s imaginary and the real world repercussions of the banks actions were “Armageddon” as nick put it. Homes foreclosed, kids unfed, schools unfunded, etc, etc. Again… the banker’s role in society is to facilitate trade, be it through business loans or small personal loans. They’ve devalued our currency, and nearly destroyed our entire economy with their greed and pollution of toxic imaginary assets. Now they’re not loaning, even though we as a nation didn’t let them fail, primarily because we have no alternative system in place. Wrong again Nick. And yes, those responsible for these toxic commodities never saw punishment.
Day-to-day reality is much different than numbers, you see… many millions unemployed, millions more not even trying (not earning a living wage, struggling to eat, pay bills, trying to live IN homes and apartments instead of on the streets), while… bankers, those lovely individuals that provide zero real-world and not-entirely-imaginary products to the world, sit in their skyscrapers and continue to play with numbers as if they’re real.
That is the problem with numbers.