Presidential predictions for 2024?

[Seattle]

They start at minimum wage, and then they get raises of a couple of dollars over several years, which brings them up to 21% and still doesn't cause inflation.
But some kinds of employee compensation do.
"Cumulatively, however, from 1978–2022, top CEO compensation shot up 1,209.2% compared with a 15.3% increase in a typical worker’s compensation."
That's a much smaller percent of workers getting a much bigger percent of the pay.

That's because the CEO has much more to do with the success of the corporation. It's why LeBron James pay bears little relationship to a Lakers secretary.

 

[Jeeves]

That's because the CEO has much more to do with the success of the corporation.

Changing the subject means nothing. I didn't ask why they're overpaid - I already know their compensation package (salary, stock options, perks, parachute) is linked to profits. I cited the correlation between profit/CEO compensation and inflation.

"The harsh reality is that the failure rate of new CEOs is staggering – 50% to 70% in the first 18 months according to Forbes, "
And yet receive 344 times the salary of the average (not minimum wage) employee below supervisor.

"It's why LeBron James pay bears little relationship to a Lakers secretary."
PS - How many pickup trucks has James Farley built? How many loaves of bread does Daniel Servitje bake in a week? I have a strong suspicion that without tossing a ball at a basket, LeBron James wouldn't get the big bucks.

 

[Seattle]

Changing the subject means nothing. I didn't ask why they're overpaid - I already know their compensation package (salary, stock options, perks, parachute) is linked to profits. I cited the correlation between profit/CEO compensation and inflation.

"The harsh reality is that the failure rate of new CEOs is staggering – 50% to 70% in the first 18 months according to Forbes, "
And yet receive 344 times the salary of the average (not minimum wage) employee below supervisor.

"It's why LeBron James pay bears little relationship to a Lakers secretary."
PS - How many pickup trucks has James Farley built? How many loaves of bread does Daniel Servitje bake in a week? I have a strong suspicion that without tossing a ball at a basket, LeBron James wouldn't get the big bucks.

I agree that LeBron is exceptional only at basketball. So what? That is what he is paid for. It's a market determined rate. It's the same with CEO's. If the failure rate is high, those aren't the ones being rewarded the most is it? It's also not a stable job thus the high pay.

Inflation doesn't have much to do with CEO pay. Inflation as a subject when talking about worker pay is just paying someone to do the same thing for more money, especially when it isn't market based.

If it's market based, there is no choice. That's how our system works. When it is mandated by the government, that isn't how our system works. It's mismatched. You are mandating pay (based on politics) but not mandating product prices (which are market driven).

Also, saying raising the minimum wage, for example, is inflationary isn't saying (as some are claiming) that this is the reason for our current high inflation. That's more a function of monetizing our debt and debasing the currency. It is still inflationary though, anytime you pay someone more for doing the same thing without an increase in productivity.

If you have to do it based on market wages, you have to do it. It's not ideal when it's government mandated.

 

[Jeeves]

That is what he is paid for.

In which he is entirely unlike a CEO. You should maybe compare him, rather to a superlative bricklayer than boardroom fixture at any level of organization.

CEO's. If the failure rate is high, those aren't the ones being rewarded the most is it?

Just 200-300 times as much as the assembly line worker who actually produces the profits. I already knew it about 'the market' rather any connection to reality. You claim that COE's get more because they contribute more than the workers. It would be interesting to see how much profit they make without any workers. Don't suppose they could even power up the robots.

If you have to do it based on market wages, you have to do it. It's not ideal when it's government mandated.

It's not ideal in any conditions. But without government regulation, 10-year-olds would still be mining coal for subsistence pay and dying of malnutrition and black lung at 35.

 

[billvon]

It's not ideal in any conditions. But without government regulation, 10-year-olds would still be mining coal for subsistence pay and dying of malnutrition and black lung at 35.

Which is how it should be! Kids don't know what hard work is these days. Make America Great Again!

 

[exchemist]

Changing the subject means nothing. I didn't ask why they're overpaid - I already know their compensation package (salary, stock options, perks, parachute) is linked to profits. I cited the correlation between profit/CEO compensation and inflation.

"The harsh reality is that the failure rate of new CEOs is staggering – 50% to 70% in the first 18 months according to Forbes, "
And yet receive 344 times the salary of the average (not minimum wage) employee below supervisor.

"It's why LeBron James pay bears little relationship to a Lakers secretary."
PS - How many pickup trucks has James Farley built? How many loaves of bread does Daniel Servitje bake in a week? I have a strong suspicion that without tossing a ball at a basket, LeBron James wouldn't get the big bucks.

They are overpaid because it is broken market, rigged by these guys all sitting on each others' remuneration committees. They are not all that clever: a lot of their success is simply ambition and luck.

 

[Seattle]

In which he is entirely unlike a CEO. You should maybe compare him, rather to a superlative bricklayer than boardroom fixture at any level of organization.

Just 200-300 times as much as the assembly line worker who actually produces the profits. I already knew it about 'the market' rather any connection to reality. You claim that COE's get more because they contribute more than the workers. It would be interesting to see how much profit they make without any workers. Don't suppose they could even power up the robots.

It's not ideal in any conditions. But without government regulation, 10-year-olds would still be mining coal for subsistence pay and dying of malnutrition and black lung at 35.

So, no one is arguing for no government regulations, just government not setting the pay, price, production, etc.

A CEO isn't making more than all of the workers. They are making market based wages. Why would they get more? The CEO is getting market based wages as well.

What part of the system do you disagree with?

 

[Jeeves]

They

So, no one is arguing for no government regulations, just government not setting the pay, price, production, etc.

They're setting the same minimum wage for all enterprises, basic humane treatment and a minimum safety standards for all employees. No etc. Government is not in the business of promoting profits; it's in the business of protecting the citizens.

A CEO isn't making more than all of the workers.

True. He's making many multiples more than any of the workers. And producing nothing. Market, yes. Inflationary, yes. Where does the money go? Not always clear.

What part of the system do you disagree with?

The middle part.

 

[Seattle]

The middle part.

That's clear...

 

[parmalee]

They are overpaid because it is broken market, rigged by these guys all sitting on each others' remuneration committees. They are not all that clever: a lot of their success is simply ambition and luck.

A few years back, PG&E (California energy company) was largely responsible for the fires--and victims--of Camp Fire. They eventually paid out something like 13 billion dollars. The CEO at the time just moved on to become CEO of an energy company in the southeast, receiving a multi-million dollar signing package, as well.

This sort of thing seems to happen a lot. It's like they've got a scheme not unlike that of the Catholic Church, simply moving the worst offenders on to another locale and pretending nothing happened.

 

[exchemist]

A few years back, PG&E (California energy company) was largely responsible for the fires--and victims--of Camp Fire. They eventually paid out something like 13 billion dollars. The CEO at the time just moved on to become CEO of an energy company in the southeast, receiving a multi-million dollar signing package, as well.

This sort of thing seems to happen a lot. It's like they've got a scheme not unlike that of the Catholic Church, simply moving the worst offenders on to another locale and pretending nothing happened.

The "market" for these people is small and they are constantly boosting their remuneration, ratcheting the "going rate" upward. There is no form of market competition for these jobs, to control the remuneration. The sole controlling factor is shareholder revolt, which does happen occasionally but not nearly often enough. If governents try to control remuneration through taxation, they threaten to move to a new jurisdiction. So that exerts market competitive pressure on governments to keep taxation low. So as I say it is a classic example of a broken market.

 

[parmalee]

The "market" for these people is small and they are constantly boosting their remuneration, ratcheting the "going rate" upward. There is no form of market competition for these jobs, to control the remuneration. The sole controlling factor is shareholder revolt, which does happen occasionally but not nearly often enough. If governents try to control remuneration through taxation, they threaten to move to a new jurisdiction. So that exerts market competitive pressure on governments to keep taxation low. So as I say it is a classic example of a broken market.

Yeah, it may not be entirely incorrect to say that the market determines the wages of CEOs, but it is misleading. The shareholders determine their wages. It's quite un-democratic.

 

[exchemist]

Yeah, it may not be entirely incorrect to say that the market determines the wages of CEOs, but it is misleading. The shareholders determine their wages. It's quite un-democratic.

Well of course it’s not democratic. That is not how anybody’s remuneration is set. But with CEOs, it’s not set by market competition either, as there is no competition, effectively. Whereas for their employees it is, since companies pay only what they need to in order to get people with the necessarily aptitude for the job, out of a large labour pool of competing candidates.

 

[parmalee]

Well of course it’s not democratic. That is not how anybody’s remuneration is set. But with CEOs, it’s not set by market competition either, as there is no competition, effectively. Whereas for their employees it is, since companies pay only what they need to in order to get people with the necessarily aptitude for the job, out of a large labour pool of competing candidates.

But hasn't that always been the claim from advocates of laissez faire capitalism, that it is, in some weird way, essentially democratic? And that it's the ultimate meritocratic system?

That's completely absurd, obviously, but many a modern Republican was reared on a diet of Ayn Rand, quite possibly the silliest "economist" in the history of the world, and they fiercely argue that such is a system is the "fairest". Nevermind all the systemic biases and other obstacles which prohibit the vast majority of the populace from achieving such success.

I mean, that is essentially what Seattle says above:

A CEO isn't making more than all of the workers. They are making market based wages. Why would they get more? The CEO is getting market based wages as well.

 

[exchemist]

But hasn't that always been the claim from advocates of laissez faire capitalism, that it is, in some weird way, essentially democratic? And that it's the ultimate meritocratic system?

That's completely absurd, obviously, but many a modern Republican was reared on a diet of Ayn Rand, quite possibly the silliest "economist" in the history of the world, and they fiercely argue that such is a system is the "fairest". Nevermind all the systemic biases and other obstacles which prohibit the vast majority of the populace from achieving such success.

I mean, that is essentially what Seattle says above:

No of course not. It’s just a way to set prices to balance supply and demand efficiently. When you have an efficient market, that is.

 

[TheVat]

Any point I wanted to make seems to have been covered by Ex, Parm, and he who serves Wooster. So I guess I will just LOL at the notion that the CEO is more imporant to a company than the worker. This seems empirically testable. One week at the widget factory, the CEO is out sick (and incommunicado). The next week, the workers are out sick. During which week are no widgets made? I expect a similar test on, say, a critical infrastructure services company would be even more illuminating. It would probably somewhat dampen the idea that a top manager works 10-350 times harder and smarter than a worker.

 

[Tiassa]

And that it's the ultimate meritocratic system?

I'm always torn between the point you're making and the fact that meritocracy was always bullshit.

It wouldn't be so wrong to pay well for good leadership, but that's not really what happens.

But the thing about PG&E in particular is that California is ungovernable. It's one thing if PG&E didn't cut the trees back far enough, but two states north, cutting back the trees was one of the first and most easily noticeable results of austerity and related budget politics that went on for over a decade.

If ever a utility boss needed an excuse for blowing a job and falling upward, "Yeah, it was California," is so obvious it goes without saying.

Insurance anecdote: Specialty division bought midwest competitor. Home office dropped a hundred million into advertising. To keep the new customers, executives decided to not raise rates. First year after the buyout, hailstorms in the midwest just wreck the division. Home office fires CEO; COO angrily quits upon learning he won't inherit the job of running the company he just helped wreck. Home office pays large sum to known industry headhunter, who wins a regional CEO of the Year award for cutting jobs and prepping the company for sale before leaving to lose a U.S. Senate election, after which he falls across the Pond to an Irish firm that he moves to Bermuda. These days, the meritocracy pays him well as a consultant and board member to multiple firms.

Remember, the thing about meritocracy is that actual merit is arbitrary. One of the things about the insurance story is that policyholders are mere money spigots. The headhunter's insurance approach is pay out less while rejecting more claims with a smaller staff than before. That is, his contribution to insurance is optimizing the company as an asset for sale, not whatever it is insurance people pretend is the societal value of their racket. The part where consumers actually need the insurance company to help them, that's not the sort of merit that gets the meritorious fifty million dollars.

 

[parmalee]

I'm always torn between the point you're making and the fact that meritocracy was always bullshit.
...

Remember, the thing about meritocracy is that actual merit is arbitrary. One of the things about the insurance story is that policyholders are mere money spigots. The headhunter's insurance approach is pay out less while rejecting more claims with a smaller staff than before. That is, his contribution to insurance is optimizing the company as an asset for sale, not whatever it is insurance people pretend is the societal value of their racket. The part where consumers actually need the insurance company to help them, that's not the sort of merit that gets the meritorious fifty million dollars.

I actually almost edited that post to add that I found the very of idea of meritocracy and democracy being somehow compatible rather amusing. Merit is arbitrary almost right down to the point of birth. I don't even know if the National Merit Scholarship still exists, but that's one of those things that got me a whole lot of free money. I remember, even at the time, finding that "Merit" part ridiculous. It's like: OK, I test "good" and I write "good", but I'm also kinda lazy, to be perfectly honest (I've gotten better). This obsession with merit is by no means exclusively American, but the elevated import of such, that it's essential, is kind of unique.

Edited to add: re: testing and writing "good". More importantly, perhaps, I think I've always been a keen observer of the meta, and that's really what all that stuff is about. The "right" answers very often are very much not the "right" answers.

 

[Jeeves]

That's completely absurd, obviously, but many a modern Republican was reared on a diet of Ayn Rand, quite possibly the silliest "economist" in the history of the world, and they fiercely argue that such is a system is the "fairest". Nevermind all the systemic biases and other obstacles which prohibit the vast majority of the populace from achieving such success.

Well, she did admire the skill of the foreman in whipping recalcitrant peasants. She would have preferred a return to monarchy, but was prepared to settle for an aristocracy of 'noble' capitalists.

he who serves Wooster.

By your gracious leave, sir, let us leave open the question of who in our little household is the master.

Remember, the thing about meritocracy is that actual merit is arbitrary.

Department store anecdote: Target's hotshot CEO sinks an unknown number of millions, on top of the 1.8 B for real estate, into launching stores across Canada. Having bought up the recently defunct Zellers assets, they set up as a subsidiary, and make a 38-year-old rising star its president. They transfer employees from Minneapolis, hire local people, rent space, order equipment, refurbish interiors, change storefronts, all under inhuman time pressure. They have to launch 140 stores and be profitable in the first year of operation. This guy is not deterred by problems, he just ploughs on through. Builds three new distribution centers within two years, buys off-the-shelf software- a difficult one that none of the employees knew how to use. So he contracts a firm to integrate the system. Then he hires lots of people for lots jobs, only there wasn't time to train them.
So the stores open, limp along with half-stocked shelves, glitchy computing and disgruntled customers for two years and then fold.
Both the CEO and president were competent in their accustomed territory; they were a disasted at adapting. And they cost a whole bunch of working people a great deal of hardship, as well as the money their compnay lost.

 

[exchemist]

Any point I wanted to make seems to have been covered by Ex, Parm, and he who serves Wooster. So I guess I will just LOL at the notion that the CEO is more imporant to a company than the worker. This seems empirically testable. One week at the widget factory, the CEO is out sick (and incommunicado). The next week, the workers are out sick. During which week are no widgets made? I expect a similar test on, say, a critical infrastructure services company would be even more illuminating. It would probably somewhat dampen the idea that a top manager works 10-350 times harder and smarter than a worker.

Yeah but that’s a bit facile. When I was working it was said a good manager should be able to be absent for several weeks before it had any effect on operations. A well-organised team, with well-chosen people, should be able to keep the show on the road without constant intervention. The decisions a manager makes should take effect over a longer timescale but make more difference to the health of the enterprise. Recruiting, retaining and motivating the team is a part of that of course.