Wednesday, January 18, 2006

Moving in the right direction

Prophet of the Obvious post so don't say I forgot to warn ya!

I have been troubled for the past few years over my inability to fashion out a living that makes me feel as if I live in the "real" America. I refer to the America where I can take my wife out to dinner once a month and not stress over $40 by seeing it as ten hours at work after child support, taxes and health insurance.

I have been trying to see us emotionally through by hoping on the reports our government keeps publishing about how the economy is stronger than it has ever been. I am growing very weary.

I don't want to be one of them there "defeatist" our president spoke of so I have been on a quest to find any sort of answer that explained the difference in my generation from my parents. My folks at least had 10% disposable income and did not have to work a seventy hour work week to do so. They were able to save a few percent for rainy days and vacations as well. I was busy comparing cost of housing, health cost and transportation the major things an American finds in supporting himself. I found disturbing comparisons but not enough to satisfy my need for answers. I am as dynamic as my father and able to sell myself to the highest bidder too. The bidding has been weakened by this "booming for a few" economy. I have several educated and experienced friends looking for these same answers to why they are not thriving in this great economy that I base my observation on.

One of the finest teachers I have run across, I call him Friend Teacher (a.k.a. buddy don), opened my eyes to a problem this past summer that I had never considered. People at the top of their game are taking disproportional amounts of compensation for the leadership of the fine company's we work for and buy from; compared to the same alpha types of years past. This hunger that the modern CEO has to feed his or her gluttony has spawned the decrease in wages and off-shoring of our jobs. The appetite of these types is in my mind like a farmer who sells and eats all his harvest leaving no seeds for next year. This, like a budget deficit will not continue endlessly even if you breed more taxpayers. I don't think wage laws are going to help in curbing the fat farmer's table habits but I do think making him answer to his investors is a great idea. I see our Security and Exchange Commission has made a step in the right direction by posing the thought that investors have the perfect right to know what the top five executives are really taking home. No more hiding the massive fringe benefits. These fat alpha bastards are eating our children and the folks who support them were under the impression they were taking an honest rate. You can't give yourself and your cohorts millions of dollars in bonuses while your workers are making due on the same salary they have had for a decade. Actually it may even be less with the insurance cuts made by these whiney overpaid CEO's and normal inflation consideration. I remember a story of Jesus spending some time braiding a whip before going into the Synagog to spank some nasty thieves like these from somewhere in the New Testament.

That is what we are faced with now that was not as rampant in our fathers time in my humble uneducated mind.

I wish I could write sweet words like Death Cab for Cutie's - Soul Meets Body:

I want to live where soul meets body
And let the sun wrap its arms around me
And bathe my skin in water cool and cleansing
And feel, feel what its like to be new

Cause in my head there’s a greyhound station
Where I send my thoughts to far off destinations
So they may have a chance of finding a place
where they’re far more suited than here

I cannot guess what we'll discover
We turn the dirt with our palms cupped like shovels
But I know our filthy hand can wash one another’s
And not one speck will remain

I do believe it’s true
That there are roads left in both of our shoes
If the silence takes you
Then I hope it takes me too
So brown eyes I hold you near
Cause you’re the only song I want to hear
A melody softly soaring through my atmosphere

Where soul meets body
Where soul meets body
Where soul meets body

I do believe it’s true
That there are roads left in both of our shoes
If the silence takes you
Then I hope it takes me too
So brown eyes I hold you near
Cause you’re the only song I want to hear
A melody softly soaring through my atmosphere
A melody softly soaring through my atmosphere
A melody softly soaring through my atmosphere
A melody softly soaring through my atmosphere
:: posted by Tennessee Jed, 6:54 PM

8 Comments:

Well, someone has to get screwed, it might as well be the working class.

I mean we wouldn't want to have the CEO's have to forgo that new Porsche and settle on a BMW, would we?
Blogger Bob, at 11:10 PM  
A note to the CEOs:
Let's get something straight. If I'm going to get screwed this hard, I expect to get paid for it.
If you wanna treat me like a whore, then fine. I'll swallow.
But you all better hand over the Ben Franklins before I brush my teeth.

Thank you...
Blogger The Editor, at 1:38 AM  
Heck Bob if were just about a $100,000 car that is just pocket jingle to them, these folks are taking home $150,000,000 a year and more while they let their employees go to work for less than $20,000 a year.

Editor we are all selling our ass, it is just marked down too much. Compaired to whore prices we are giving free blow jobs with a $1 piece of tail.
Blogger Tennessee Jed, at 5:44 AM  
You can write sweet words as I have read them many times on this blog.
Blogger red molly, at 5:40 PM  
whut red sed jed! well putt. thays gut to be a balunts sumday. i pray fer it most everday.
Blogger buddy don, at 7:30 PM  
What the editor said!
Blogger newscoma, at 8:27 PM  
nice post!
Blogger greatwhitebear, at 12:15 PM  
Here's my take on CEO overpayment:

I have argued on my website that work is for service. Let's now take that further to the issue of CEO pay levels. I want to argue that most CEOs are massively overpaid. Most of us have a gut feeling that this is true, but we can't say why.
Here is the answer: 'work is for service of the common good, and bonuses should be paid as such'. Let me say that again: 'work is for service of the common good, and bonuses should be paid as such'.
You see, CEOs have two forms of pay. The first is a guaranteed wage. The second is a bonus, which depends on their performance during the year. I want to talk about the bonus, and show why it is so often excessive.
The CEO's bonus is usually tied to the profit performance of the company. If the company increases profit dramatically in a year, the CEO will get a big bonus. If the company decreases profit dramatically in a year, hopefully the CEO will get no bonus. (I say hopefully, because sometimes the CEO still gets a big bonus when profits have slumped!)
The CEO has at least three strategies for increasing profitability, and so for receiving large bonuses. They may be itemised as follows: Item 1: He may purchase another company, merge it with his, layoff workers, and profit through efficiency gains. Item 2: He may grow the existing company by growing sales, or decreasing expenses. Item 3: He may manage his balance sheet better, and run his company more efficiently through better use of debt, or through better use of inventory, or through better management of cashflow.

Now some of these measures serve the company/owners at the expense of others, while other measures serve all of us by making the company genuinely more efficient. CEOs should be paid for the latter and not for the former. At present, they are paid for both.

Regarding item 1: The act of merging companies in this way is usually positive for the common good. Purchasing another company and reducing the work force produces the same output at lower cost. This is usually genuine service to us all. (In saying this however, we must consider whether those laid off can find new ways to support themselves and to serve others through a new form of work.)

But the CEO does not contribute much service under this heading. All he has done is find a company which is similar to his own, and negotiated a price for buying that company, and made a profit in doing so. The point is that all the work in generating this extra profit was done by the present and past workers and owners and creditors of the two companies. Practically none of the work is done by the CEO - he has just seen a possibility of combining the hard work of a stack of different people, and he has arranged for this possibility to become reality. So the CEO does not deserve much, if any bonus for merging companies. He certainly does not deserve the millions that he is likely to be paid in present corporate practice.

Another aspect of a corporate merger for which the CEO does not deserve a big bonus is the price negotiation. You see, negotiating a good price for an acquisition does not serve the common good very greatly. The more one party gains on the price for the acquisition, the more the other party loses. Bargaining on sale price is a zero sum game. Price haggling therefore does little to serve the common good. Since bonuses should be paid according to service of the common good, the CEO deserves very little for good price negotiation. Again, this goes against cuurent market practice.

Regarding item 2: CEOs might deserve bonuses if they have helped to increase sales. But it depends how they have done it. Increasing sales serves the common good if sales are increased through efficiency gains. These gains may lead to selling a better product, to better service, or to cheaper pricing. For their contribution to such efficiency gains, CEOs should be rewarded (as also should the owners and the workers who contribute to these gains, in proportion to their contribution). However, increasing sales through gaining a monopoly, or through cartel pricing does not serve the common good, and so the CEO should not be remunerated for it. (The exception is if the CEO came up with the innovation which justly produced the monopoly). By implication, CEOs of monopoly businesses should not be excessively remunerated. CEOs should not receive bonuses unless they have contributed to efficiencies which serve the common good.

Similarly, driving down expenses may come through CEO innovation, for which the CEO might justly receive a bonus payment. Sometimes workers are being lazy, and it is right that the CEO should be paid for forcing them to work harder. However, forcing the workers to work excessive hours for no extra reward does not serve the common good, and should not lead to extra CEO bonuses.

Regarding item 3: If the CEO takes longer to pay creditors, this action does not serve the common good. Neither does hassling debtors to pay more quickly. This is simply raw self-interest, and does not deserve praise nor bonus payments.

In conclusion, this post aims to show the practical implications of the idea that 'work is for service of the common good, and bonuses should be paid as such' - Note that I do not believe all CEOs are overpaid. I'm all for genuine innovation being well rewarded. You IBM execs, all praise to your development and distribution of the PC. You have served us all massively - spend your bonuses with a clear conscience!!!
Any board member out there, take careful note! You corporate board members are responsible for the present mess, because you choose the bonus levels of our CEOs. The problem begins there, and trickles down through the upper tiers of management.
The big point again: 'work is for service of the common good, and bonuses should be paid as such'
Blogger Locke, at 1:34 AM  

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