Wealth Distribution in the USA

awec

Charlie Rock wrote: »

Are you denying that CEO's are protected from poor decisions, up to and including mass manslaughter, by limited liability and other property and asset securing instruments?

Why do you think that the RCC hasn't been stripped of its assets and property here? Why? Because property rights are highly developed to the point where challenging them is deliberately frustrated even if you've been kept as a de-facto slave by the institution.

I am saying you are arguing a completely different point to what I am making.

I will take a recent high profile example that was in the news. Microsoft bought Nokia. Do you think that the decision to spend 7 billion dollars was made by someone earning 50 grand a year? Do you think the risk associated with such an investment was weighed up by someone low down in Microsoft, who woke up one morning and thought that the money should be spent?

Do you think perhaps that investing 7 billion dollars is quite a stressful event and is a huge amount of risk? Should that go tits up, who do you think gets publicly slated, embarrassed and has shareholders screaming at them?

Do you deny that making that sort of decision is riskier than deciding whether to get a burger or a sandwich for lunch?

The higher you go, the more impact you have and the bigger risk associated with what you do. Of that there is absolutely no doubt and hence salaries that increase dramatically. Who would want to be making those kinds of decisions for relatively low wages?

Permabear

This post has been deleted.

KyussBishop

awec wrote: »

I have if you read the thread.

I haven't mentioned "creating jobs".

You haven't provided an actual argument against what you labelled rubbish - I even gave a more detailed example of it in the post you reply to here, and you haven't addressed anything like this in your other posts.

KyussBishop

awec wrote: »

So you're just going to deflect from the point at hand then?

That is completely unrelated to what he posted. You are missing the point, perhaps deliberately.

The point, is that a company is run by all of the workers - management included - and giving one group within a company all of the credit, is a prime example of giving owners/management/CEO's undue credit, for success of a company.

Sleevoo

donegal__road wrote: »

so that means that the boss gets over 300 times the average worker's salary? (by American logic, that is)

If I own a company and decide to pay the ceo millions how is it anyone elses business.

Sleevoo

KyussBishop wrote: »

The point, is that a company is run by all of the workers - management included - and giving one group within a company all of the credit, is a prime example of giving owners/management/CEO's undue credit, for success of a company.

Who is giving them all the credit?

awec

KyussBishop wrote: »

There isn't an abundance of people who have the opportunity to develop that skillset - don't pretend it is a meritocracy, it is a privileged position, that has very high barriers to entry (usually requiring and abundance of familial wealth to start off with).

Social mobility, the poor and middle classes working their way up to riches through business, is the exceptional/rare case, and only a relative few will be so lucky.

Of course only a relative few will make it. That's how it works. Not absolutely everything can be successful.

Anyone can start a business, and if entrepreneurship isn't their cup of tea (which it isn't for most) then anyone can apply for a position in an existing business. To suggest that success is locked away and hidden from the common man is disingenuous.

awec

KyussBishop wrote: »

The point, is that a company is run by all of the workers - management included - and giving one group within a company all of the credit, is a prime example of giving owners/management/CEO's undue credit, for success of a company.

Of course it's run by all the workers. But not everyone contributes equally so of course credit is not shared equally.

Nor can every single worker be named publicly for every success of the company. One of the requirements of a CEO and executives is to be the face of a company - that means it's your name out there for the good things, and the bad things and ultimately every single thing that happens there happens under your watch - whether you directly have any influence in it or not.

Turtwig

awec wrote: »

I am saying you are arguing a completely different point to what I am making.

I will take a recent high profile example that was in the news. Microsoft bought Nokia. Do you think that the decision to spend 7 billion dollars was made by someone earning 50 grand a year? Do you think the risk associated with such an investment was weighed up by someone low down in Microsoft, who woke up one morning and thought that the money should be spent?

Do you think perhaps that investing 7 billion dollars is quite a stressful event and is a huge amount of risk? Should that go tits up, who do you think gets publicly slated, embarrassed and has shareholders screaming at them?

Do you deny that making that sort of decision is riskier than deciding whether to get a burger or a sandwich for lunch?

The higher you go, the more impact you have and the bigger risk associated with what you do. Of that there is absolutely no doubt and hence salaries that increase dramatically. Who would want to be making those kinds of decisions for relatively low wages?

There is a oversight here: The higher you go the more power and responsibility you have to make decisions. However, the impact of your decisions, should they be mistakes, will worse affect those below you. Suppose a Steve Jobs type CEO make's a mistake. Unless it's a very serious one without legal ramifications all that's going to happen is he get's fired. He should, if he's any bit shrewd knowing the risk he took have enough financial security for a long time. The employees under him who were dependent on him making the right decision though are kind of f**ked. And it was ultimately those workers, who's effort keeps the company afloat in the first place. Sometimes if the CEO makes a mistake the work of the workers mitigates the damage dealt. (And Sometimes the CEO will bail out the workers.) To suggest one is more important than the other to the scale of orders of magnitude is a little strange. I can't see the logic to it, and I've yet to even see a decent argument proposed for as to why it should be the case.

awec

Jernal wrote: »

There is a oversight here: The higher you go the more power and responsibility you have to make decisions. However, the impact of your decisions, should they be mistakes, will worse affect those below you. Suppose a Steve Jobs type CEO make's a mistake. Unless it's a very serious one without legal ramifications all that's going to happen is he get's fired. He should, if he's any bit shrewd knowing the risk he took have enough financial security for a long time. The employees under him who were dependent on him making the right decision though are kind of f**ked. And it was ultimately those workers, who's effort keeps the company afloat in the first place. Sometimes if the CEO makes a mistake the work of the workers mitigates the damage dealt. (And Sometimes the CEO will bail out the workers.) To suggest one is more important than the other to the scale of orders of magnitude is a little strange. I can't see the logic to it, and I've yet to even see a decent argument proposed for as to why it should be the case.

Of course. Doesn't that suggest a higher risk in the decision you make?

KyussBishop

Permabear wrote: »

This post had been deleted.

Nobody has made that distinction, of 'real' work vs suits, other than you - companies can't exist without managers, yes, and companies can't exist without workers either.

K-9

awec wrote: »

I will take a recent high profile example that was in the news. Microsoft bought Nokia. Do you think that the decision to spend 7 billion dollars was made by someone earning 50 grand a year? Do you think the risk associated with such an investment was weighed up by someone low down in Microsoft, who woke up one morning and thought that the money should be spent?

Well probably a lot of the ground work for the deal was completed by financial and legal people on not much more than that.

Do you think perhaps that investing 7 billion dollars is quite a stressful event and is a huge amount of risk? Should that go tits up, who do you think gets publicly slated, embarrassed and has shareholders screaming at them?

The CEO will probably get a nice pension and pay off when/if it goes tits up, and the company will rationalise to cut back on costs.

Do you deny that making that sort of decision is riskier than deciding whether to get a burger or a sandwich for lunch?

The higher you go, the more impact you have and the bigger risk associated with what you do. Of that there is absolutely no doubt and hence salaries that increase dramatically. Who would want to be making those kinds of decisions for relatively low wages?

I doubt anybody is arguing against that, the extent of the reward would be questioned by many, bank CEO's a good example.

drumswan

awec wrote: »

Of course only a relative few will make it. That's how it works. Not absolutely everything can be successful.

Anyone can start a business, and if entrepreneurship isn't their cup of tea (which it isn't for most) then anyone can apply for a position in an existing business. To suggest that success is locked away and hidden from the common man is disingenuous.

Its not disingenuous, especially in somewhere like the US. Poor and lower middle class people, who you can see from the video make up the huge majority, cant get anywhere near these positions. They cant even get into the colleges to get the required education.

These stupid libertarian arguments would be great if everyone started off equal, unfortunately the foreign guy working at the petrol station has no chance of improving his station. Rags to riches is a pipe dream, the rich hoard wealth, skew the system to protect themselves and pass it on to their offspring.

Turtwig

awec wrote: »

Of course. Doesn't that suggest a higher risk in the decision you make?

Not on scales of personal risk though. It's quite simple. The CEO may have health issues or personal issues but odds are his security net and quality of life over all won't be significantly impacted by these "risks." Certainly not the point where he's struggling to afford the basic commodities such as food, health and energy bills.

awec

K-9 wrote: »

Well probably a lot of the ground work for the deal was completed by financial and legal people on not much more than that.

Of course - but ultimately that doesn't mean they are having a high impact. That just means they are executing the plan laid out to them by their superiors.

These people won't ever have to justify the decision.

The CEO will probably get a nice pension and pay off when/if it goes tits up, and the company will rationalise to cut back on costs.

Losing their job along with public embarassment and knowing that you have made a mess for some people.

That doesn't sound bad to you?

I doubt anybody is arguing against that, the extent of the reward would be questioned by many, bank CEO's a good example.

The bank CEOs are a bit of a special case. It would be unfair to equate them to other CEOs.

Permabear

This post has been deleted.

gaffer91

Interesting thread. I'd have to agree with posters such as Awec, Permabear, who take the line that hard work should be rewarded even if that means higher income and wealth disparities.

While arguments can be made that people from lower socioeconomic groups are disadvantaged by the environment they grow up in from birth, it is also true that poorer people in the western world are provided for as much as conceivably possible with dole payments, council housing, free healthcare and education and so on. I personally think what currently plays a large role in multi-generational poverty is the lack of emphasis placed on education in the home in poorer households and the fiercely anti-intellectual environment in which less well off children grow up in. I don't think a whole pile more can be done on this front beyond taking people off their parents at birth, which would of course be an utterly barbaric solution.

While income inequality may seem unfair, I'd have to say that it would probably be more unfair for a young man or woman who has worked and studied hard from the age of 15 or 16 to get a good leaving cert, do well in college and excel post-graduation to be taxed into oblivion so that more money can be funneled to those closer to the bottom of the pyramid (and I wouldn't necessarily consider myself very right-wing).

awec

Jernal wrote: »

Not on scales of personal risk though. It's quite simple. The CEO may have health issues or personal issues but odds are his security net and quality of life over all won't be significantly impacted by these "risks." Certainly not the point where he's struggling to afford the basic commodities such as food, health and energy bills.

I would personally suggest that making a decision that could affect 1000 people working below you is riskier and more stressful than making a decision that will affect only yourself.

drumswan

Permabear wrote: »

This post had been deleted.

Nobody is making that argument, except maybe the voices in your head.

Of course entrepreneurs should be rewarded, but not to the extent that all of the wealth in society flows into a tiny minority of people.

Karl Stein

KyussBishop wrote: »

Nobody has made that distinction, of 'real' work vs suits, other than you

Exactly. Conjure 'strawmen', set fire to them, stand back and tug yourself off in delight.

opr

awec wrote: »

I am saying you are arguing a completely different point to what I am making.

I will take a recent high profile example that was in the news. Microsoft bought Nokia. Do you think that the decision to spend 7 billion dollars was made by someone earning 50 grand a year? Do you think the risk associated with such an investment was weighed up by someone low down in Microsoft, who woke up one morning and thought that the money should be spent?

Do you think perhaps that investing 7 billion dollars is quite a stressful event and is a huge amount of risk? Should that go tits up, who do you think gets publicly slated, embarrassed and has shareholders screaming at them?

Do you deny that making that sort of decision is riskier than deciding whether to get a burger or a sandwich for lunch?

The higher you go, the more impact you have and the bigger risk associated with what you do. Of that there is absolutely no doubt and hence salaries that increase dramatically. Who would want to be making those kinds of decisions for relatively low wages?

This of course will have no impact whatsoever on the workers within the company. The banking sector at that kind of levels made massively bad decisions on that kind of level but it's great to see that it hasn't effects anyone else bar themselves.

Opr

KyussBishop

awec wrote: »

Of course only a relative few will make it. That's how it works. Not absolutely everything can be successful.

Anyone can start a business, and if entrepreneurship isn't their cup of tea (which it isn't for most) then anyone can apply for a position in an existing business. To suggest that success is locked away and hidden from the common man is disingenuous.

You ignored the point of my argument: It is the already-wealthy, who by and large, get the opportunity to develop these skills, and who take the positions of leadership within business - with there being little social mobility, from those in the working/middle class, into these positions.

Turtwig

awec wrote: »

I would personally suggest that making a decision that could affect 1000 people working below you is riskier and more stressful than making a decision that will affect only yourself.

Not really because you don't psychologically actually feel the impact. This isn't saying the CEO's are callous but it's just that unless impacts are in their face it's very difficult for them to appreciate the risk. I've spoken to tonnes of boss types and some of them were actually stressed over the fact that they didn't really grasp the impact their decisions were making. It was just numbers. Almost military like, I guess would be a good analogy. In a business like the line of a CEO's monetary decisions are easily rationalised. Just like it is for a Government. Again, they're not callous it's just how humans works. It's why you can happily post on this while you know that there's over a billion people on this planet living in really ****ty conditions and have rubbish quality of living. Unless you've had direct contact with that team your making decisions about the responsibility isn't as high risk as you would think.

Edit : And to thrive in that culture you generally have to be able to get over it easily. So you make mistakes, screw up the lives of others in the process, but by and large remain unaffected and move on.

donegal__road

In 2010, 93% of all income gains went to the top 1% of Americans.

15,000 households received 37% of all of those income gains.

The reality is that the US has the largest income inequality gap of the industrialised world, and is almost on a par with that of a third world country.





.

Turtwig

KyussBishop wrote: »

You ignored the point of my argument: It is the already-wealthy, who by and large, get the opportunity to develop these skills, and who take the positions of leadership within business - with there being little social mobility, from those in the working/middle class, into these positions.

That's one of the reasons why I really appreciate Ireland. The system is still to a relative degree very open about getting poorer classes into education and other skill acquisitions, making it that bit more possible for them up to move up the ladder. There is a creeping element of the poor being lazy sneaking in now but thankfully it wasn't always there was enough for most of my family to prosper. I think JK Rowling (?) gave a fantastic speech on this.

opr

awec wrote: »

I would personally suggest that making a decision that could affect 1000 people working below you is riskier and more stressful than making a decision that will affect only yourself.

That doesn't mean that the protection of risk should mainly be afforded to the person making the decisions.

Opr

K-9

awec wrote: »

Of course - but ultimately that doesn't mean they are having a high impact. That just means they are executing the plan laid out to them by their superiors.

But somebody has to help the CEO's and provide the information necessary to form the decision, they need that expertise and knowledge to decide whether to buy Nokia or not.

These people won't ever have to justify the decision.

Well that's what performance reviews are for, they'll have to justify their part in the decision. You seem to be making out that they've no responsibility whatsoever and it all rests with the CEO.

Losing their job along with public embarassment and knowing that you have made a mess for some people.

With a nice pay off, they might get less bonuses or their shares aren't worth as much, again embarrassment is part and parcel of the job if things go wrong.

The bank CEOs are a bit of a special case. It would be unfair to equate them to other CEOs.

So you do have a subjective cut off then?

drumswan

donegal__road wrote: »

In 2010, 93% of all income gains went to the top 1% of Americans.

15,000 households received 37% of all of those income gains.

The reality is that the US has the largest income inequality gap of the industrialised world, and is almost on a par with that of a third world country..

Im pretty sure thats the model the libertarians are going for...

gaffer91

KyussBishop wrote: »

You ignored the point of my argument: It is the already-wealthy, who by and large, get the opportunity to develop these skills, and who take the positions of leadership within business - with there being little social mobility, from those in the working/middle class, into these positions.

Define "already wealthy". I think it is highly possible for someone in Ireland growing up in a household making close to the median income to move up the economic ladder if he or she so wishes and provided he/she is willing to put in the requisite effort.

But has it ever occurred to you that for many people becoming CEO of a company is not a top priority? I'd wager most people would be happy enough with a partner, some kids, a reasonably well paying job, good health and a nice house in a crime-free area. While nearly everyone is attracted to large amounts of money in the abstract, most people are not ready to devote the time and energy it takes to rise to the top of the economic ladder and are quite happy to settle for a bit less in their pay packet if it means an easier life. This doesn't mean we should be looking to take as much money as possible off people for whom it is a top priority.

KyussBishop

awec wrote: »

Of course it's run by all the workers. But not everyone contributes equally so of course credit is not shared equally.

Nor can every single worker be named publicly for every success of the company. One of the requirements of a CEO and executives is to be the face of a company - that means it's your name out there for the good things, and the bad things and ultimately every single thing that happens there happens under your watch - whether you directly have any influence in it or not.

That's moving away from what I meant (inflating the credit due to owners/management/CEO's, and minimizing that due to workers, to justify excessive salaries), but at least we agree that the credit they award themselves is inflated.

While assigning reputation credit to CEO's like that is good for PR, using that as an argument that workers should be credited less in salaries, or the CEO more (based on the reputation they are falsely credited, for PR purposes), has no justification.