The Fed Shutdown Poll and Megathread

[sbr]

How many ultra-rich people does the US have compared to other places, anyway? How much does that contribute to the difference?

According to Forbes' Mar 2011 List of Richest People

3 of the Top 5
4 of the Top 10
8 of the Top 20
14 of the Top 30
18 of the Top 50
32 of the Top 100

Are listed as from the United States

[CountDeMoney]

Bum economy puts executive pay in ugly new light

No shock that shareholders of Beazer Homes howled with pain a few weeks ago over the pay of CEO Ian J. McCarthy.

More than half them rejected a nonbinding resolution to "hereby approve" the pay of McCarthy and other Beazer bigwigs. After the results were known, Beazer directors said earnestly that they would "seek to determine the causes of any negative voting result."

They could start and finish with their own financial filings, which show McCarthy making $21 million over the past three years even as the company, builder of numerous Maryland communities, lost $1 billion. Beazer's stock trades around $5, down from $79 a few years earlier.

Get used to this. More shareholders than ever will have a nonbinding "say on pay" this year, thanks to the Dodd-Frank financial reform act. Already shareholders have voted against executive enrichment schemes at Hewlett-Packard, Jacobs Engineering Group and Shuffle Master, as well as at Beazer.

But shareholders may not be the most important constituency.

The renewed ascent of executive pay in a miserable job market sets the stage for unprecedented public disgust. Or at least it should.

Median CEO pay at 200 top corporations was $9.6 million last year, up 12 percent from the year before, The New York Times reported Sunday. Viacom's Philippe Dauman made $84.5 million, Occidental Petroleum's Ray Irani made $76.1 million, and Stanley Black & Decker's John Lundgren made $32.6 million.

Meanwhile, 13.5 million Americans are unemployed — 8.8 percent. Even conservatives, inclined to give corporate chieftains their lead, seem to be increasingly fed up.

Last year, 57 percent of Republicans told the Harris Poll they favored stricter regulation of executive pay and bonuses. In the same survey, 83 percent of Democrats and 69 percent of independents also wanted government to clamp down on executive boodle.

A year earlier, in a similar Gallup poll, 42 percent of Republicans favored government "taking steps to limit the pay of executives." (Seventy-seven percent of Democrats and 56 percent of independents felt the same way in that survey.)

Huge CEO pay at a time of layoffs ought to be "a political litmus test for conservative Republicans, liberal Democrats and radical independents," conservative columnist Cal Thomas wrote recently. "The moral issue in executive pay is whether management deserves these high salaries while employees are laid off, or denied pay increases."

Lucre and layoffs aren't just coincidental at such companies. They are intimately connected. At the newly combined Stanley Works and Black & Decker, Executive Chairman Nolan Archibald will probably make tens of millions in bonuses tied to cost cutting, much of which will be accomplished by putting thousands of his co-workers out of a job.

Such corporate "rightsizing" has been defended as a way to increase efficiency and build societal wealth. As remaining workers at downsized firms become more productive, the theory goes, their pay will increase proportionally. Meanwhile, higher profits resulting from downsizing will be reinvested in promising industries, creating jobs for those laid off.

But it hasn't worked out that way recently. Most of the productivity gains in recent decades lined the pockets of shareholders and top management, not workers. Historically high executive pay combined with historically high joblessness make that more shockingly clear than at any time since the early 1990s, when the productivity spurt began.

"It's no use pretending that what has obviously happened has not in fact happened," Joseph E. Stiglitz, winner of the Nobel Prize in economics, writes in the latest issue of Vanity Fair. "The upper 1 percent of Americans are now taking in nearly a quarter of the nation's income every year. In terms of wealth rather than income, the top 1 percent control 40 percent."

Now even corporate shareholders are mad.

Beazer Homes gave several reasons why its suffering owners should be thrilled with $6.9 million in pay for CEO McCarthy last year. He hasn't gotten a base-pay raise since 2005. He didn't get any free stock between 2005 and 2010. Blah blah blah.

Shareholders didn't use up much Kleenex, to judge by their vote.

But don't expect miracles from such "say on pay" requirements at annual meetings. As noted, these votes are nonbinding. Boards can act concerned yet do anything they want.

Perhaps the CEO haircut will instead come from Congress and the Internal Revenue Service. Many executives owe their jobs and their incomes — directly and indirectly — to bailouts from the U.S. taxpayer.

Anger at corporate pay is rising. The country faces huge deficits. Raising the top personal income-tax rate from its present level of 35 percent would be a great way for CEOs to start paying America back.

[Admiral Yi]

Someone please explain to me how a higher income tax rate on top earners is supposed to help out the shareholders of Beazer Homes.

[CountDeMoney]

Someone please explain to me how a higher income tax rate on top earners is supposed to help out the shareholders of Beazer Homes.

Not Beazer.  America.  Like the man wrote.

Nice try.

[jimmy olsen]

Oh, shit.

You have until Monday.

I have an automatic 6 month extension 

[Admiral Yi]

Not Beazer.  America.  Like the man wrote.

Nice try.

The man wrote an article which was roughly 2/3 about shareholders, with a deus ex machina conclusion that we should tax CEOs more.

BTW the claim that GEO got a tax refund after paying no taxes on huge profits which your bestest new friend Bernie Sanders put up on his US Senate web site has been debunked.

[CountDeMoney]

The man wrote an article which was roughly 2/3 about shareholders, with a deus ex machina conclusion that we should tax CEOs more.

Here's a deus ex machina conclusion:  fuck you.

BTW the claim that GEO got a tax refund after paying no taxes on huge profits which your bestest new friend Bernie Sanders put up on his US Senate web site has been debunked.

I don't believe you.

[Admiral Yi]

Here's a deus ex machina conclusion:  fuck you.

That's fine, but tell me who that article was aimed at.  Who on Languish did you think would be persuaded to support an increase in the top tax rate because owners of Beazer Home stocks are pissed off?

[CountDeMoney]

I don't answer Yi questions, particularly those that corkscrew in the very Yi-specific tradition of selective reduction.  That's been ROE policy for years.  You know that.

Writer claims executive pay is under increasing scrutiny.  Writer gives an example of such scrutiny.  Writer closes with executive pay should be taxed more, for the benefit of all America.  Yi bitches about example.  Roll credits.

[Admiral Yi]

Writer claims executive pay is under increasing scrutiny.  Writer gives an example of such scrutiny.  Writer closes with executive pay should be taxed more, for the benefit of all America.  Yi bitches about example.  Roll credits.

Yi bitches about argumentation.  The example was fine.

Otherwise your article was better than the one you posted.

[CountDeMoney]

Otherwise your article was better than the one you posted.

Then stop asking questions about a premise that wasn't there.  That's chick thinking.

[Neil]

I do think inequality's an issue generally.  My own sense is that what's really happening though isn't quite so simple.  My impression is that there's a growing gap between the merely rich and the truly rich which has been exacerbated by the norms in the finance sector and, in the UK, the odd oligarch and the like.  That I think's distorting figures, so the respectable rich are still not too distant from the 'middle class', but the filty rich are moving on.

You know, I was just thinking about this.  At least part of the income disparity is caused by the fact that they have something that most of the rest of the developed world simply doesn't:  The masters of global capitalism.

Then again, I don't really think that income disparity is a problem.  I have no problem with the idea of a very rich person making more than me, while I make more than a poor person.

[DontSayBanana]

I don't answer Yi questions, particularly those that corkscrew in the very Yi-specific tradition of selective reduction.  That's been ROE policy for years.  You know that.

Writer claims executive pay is under increasing scrutiny.  Writer gives an example of such scrutiny.  Writer closes with executive pay should be taxed more, for the benefit of all America.  Yi bitches about example.  Roll credits.

Actually, Seeds, it does kinda sound like a bait and switch.  Everything in the article that's not the last paragraph points to finding a way to cap exec pay, not increase their tax burden.  When an author starts talking "executive pay," they're talking about amounts, not percentages.  These shareholders would have been just as pissed if the guy had "only" made $5 million with a higher tax rate than $7 million without. (edited to remove weasels)

[Berkut]

It is interesting the way it is taken as a matter of faith that the "rich" have enough cash to fund the infinite desires of the socialist state that the Seedys of the world demand - even when the data makes it clear that it simply is not the case.

It is like they think that if they want it to be true hard enough, then it will become true. It *should* be the case that the State can take care of everyone, therefore it MUST be the case that they can, if only the "rich" weren't being so selfish...

[Sheilbh]

You know, I was just thinking about this.  At least part of the income disparity is caused by the fact that they have something that most of the rest of the developed world simply doesn't:  The masters of global capitalism.

That could be part of it, but then of the OECD, the country with the highest percent of national income in fewest hands is Italy.  The US doesn't have unique income inequality, it's simply different income inequality.

Then again, I don't really think that income disparity is a problem.  I have no problem with the idea of a very rich person making more than me, while I make more than a poor person.

I agree.  If I was American I'd be more worried about income effectively freezing for many people - that in itself should be a reason for healthcare reform -  than about the very rich. 

In the UK I think the problem's social and not helped by this government's complete lack of understanding for the middle class.  I'm quite London in my politics.  So I'm intensely relaxed about oligarchs and bankers getting millions in bonuses.  But there's real, intense, burning anger about this.  And it's not just a thing  of the left.

It is interesting the way it is taken as a matter of faith that the "rich" have enough cash to fund the infinite desires of the socialist state that the Seedys of the world demand - even when the data makes it clear that it simply is not the case.

It is like they think that if they want it to be true hard enough, then it will become true. It *should* be the case that the State can take care of everyone, therefore it MUST be the case that they can, if only the "rich" weren't being so selfish...

To be fair the US's socialist state that needs funding isn't that massive.  A pension scheme, healthcare for the elderly, the poor and the disabled; that is hardly infinite and is actually pretty basic.  And it is broadly speaking true that if income tax revenues as a percent of GDP went back to what they were before Bush then you'd have a controllable, healthy deficit.

For myself I think tax and welfare have to part of a social contract which means everyone gets the benefits and you don't pay for it by soaking the rich.

The truth is, I think, most Americans actually want their welfare state, not least because it is minimal.  Also, with austerity across the board - I know it's already happening at a state level - I think people will turn more to tax.