73% support the "Buffett Rule"

[Dr.Who]

What begets wealth?

Does hard work and intelligence beget great wealth?
Or does wealth beget wealth?

If it's the former, than anyone who has a lot of money deserves everything that they can get.

If it's the latter, then it's more a matter of accident and luck.

They should only deserve that which they acquired honestly.

yes hard work, intelligence, prior wealth, and even "luck" all play a role. But even if the universe does parsel out luck more to some than others then it is still not the role of government to redistriubute the results of luck. I do believe that in many cases individuals make their own luck. I also believe that some luck is so badly catastrophic that it cannot be overcome. Still not the governments place to make corrections for that but you should clearly help those who are less fortunate than yourself of your own free will and you should do so generously.

Often a more important question would be what makes people poor?

Most of it is bad choices: getting pregnant and trying to raise a child in a single parent family, having developed no skills to get a job, not putting in the effort to get a job,...

See this thread:

https://www.houseofpolitics.com/forum/showthread.php?t=13684&highlight=dumb+lazy

 

[Dr.Who]

However, when a CEO expect his compensation package to be worth 400X the salary of one of his employee, and the corporation obviously has limite earning power on any given year, but especially in a down market, it is obvious that his greed affects the distribution of money that is assigned to each pay grade!

The CEO does not set his salary the board does. And they do so because they want the company to make a profit and they think that hiring that particular CEO is a good way to actually increase the amount of money the company has. So obviously his greed is correlated with more money in the company to pay employees.

I bet if we looked at an actual measure of the correlation between CEo salaries and employee salaries we would see that companies that pay CEO's more also pay employees more.

Lets see if I can find that:

(I came across this. It does not answer the question but is interesting
http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/PayRatios.aspx
)

Ok, here is an abstract from an article that answers the question:

In this study we propose that norms of fairness are salient to top decision makers and show that over- or underpayment
of the CEO cascades down to lower organizational levels. Moreover, it appears that CEOs use their own power not
only to increase their own salaries, but also those of their subordinates. One implication of such a process may be that
the overpayment of a top executive has higher costs than have previously been realized. We also find evidence suggesting
that CEOs serve as a key referent for employees in determining whether their own situation is “fair,” and this influences
their reactions to their own compensation. More specifically, we find that when lower-level managers are underpaid relative
to the CEO—that is, underpaid more than the CEO or overpaid less—they are more likely to leave the organization.
Results obtained from testing our hypotheses on a sample of more than 120 firms over a five-year period demonstrates
the importance of considering fairness in the setting of CEO pay. Implications for the design of executive compensation
packages are discussed.


http://test.scripts.psu.edu/users/t/x/txp14/pdfs/os06.pdf

I have to admit that was not exactly what I expected. I thought that we would find that a board that spent a lot for a ceo would also spend a lot for employees in general. In fact what we found is that it is the ceo's themselves who get more who advocate for their employees to get more.

Meaning of course that if you want employees to get paid more then you want a ceo who gets paid more. It also shows that sometimes he does this contrary to the goals of the company to make larger profits - this is the opposite of greed since it lowers the value of his stock options.

 

[Dr.Who]

you just go start a company, with no workers, use no roads, also you have to be self educated, and all materials you use must be made by you with no help or shipping via anything you did not you yourself make....Now make it a fortune 500 company with those rules...

It does not matter that we all stand on the shoulders of giants because we ALL stand on those shoulders. The person who starts a company has an equal opportunity to do so with the other person who does not.

The founder of Portillos for example started in a single hot dog stand in 1963 and built it to be a large chain of large stores. The next guy who also ran a single hot dog stand but did not turn it into a chain followed the same rules.

Here is his bio:

Dick Portillo was born at 1330 West Van Buren in Chicago, Illinois. His family then moved to government-subsidized row houses on Mohawk Street, called the Mother Frances Cabrini Housing Project. After his father started earning enough money, they were prompted to leave and moved to 1617 South Central Park. His family later moved to the southwest suburbs. He was a 1957 graduate of Argo Community High School at 63rd and Harlem. After high school, he served a tour with the Marine Corps.

The first Portillo's hot dog stand known as "The Dog House" opened in 1963 on North Avenue in Villa Park. Owner and founder Dick Portillo invested $1,100 into a 6' x 12' trailer without a bathroom or running water. To get the water he needed, he ran 250 feet of garden hose from a nearby building into the trailer.

By 1967, "The Dog House" was a success and was ready for a new look. After it was remodeled, it was renamed "Portillo's" and over the years has grown into a successful multi-state operation. Portillo’s expanded to Southern California in 2005 and to Indiana in 2006.

 

[Dr.Who]

Your just not used to people answering you tic for tac, are you?

A tic tac is a candy.

 

[Dr.Who]

Sure! the board is a tiny number of elites who run around in the same circles, and function under the theory of "you scratch my back, I scratch yours!"

The regular stock holders (anyone holing less than 200,000 share, are dwarfed by the REAL owners!

don't tell me you don't know that?

The board is the group with the most to lose if he does not perform. their own greed demands that they want the absolute best ceo that they can get - and to do that they are williing to pay what it takes. They are not likely to lose millons in their own personal portfolios to scratch his back. What they are is likely to fire his ass if he does not make a profit.


"WHAT IS THE BEST way for a board of directors to fire a company's chief executive officer? That's easy: quick, quiet, and cheap. In this imperfect world, though, it rarely works that way. Allegheny International was rocked by turmoil for months before Robert Buckley departed. BankAmerica replaced Sam Armacost amid headlines normally reserved for a Third World coup. And CBS got Tom Wyman to pack up only after agreeing to pay him some $4 million plus $400,000 a year for life. For CEOs, these are days of living dangerously. With raiders so active and stockholder suits against directors on the rise, the subject of how and when to get rid of a slumping chief executive officer has gripped boardrooms. Directors are becoming more analytical, more sophisticated -- and more nervous about subpar performance. Hardly a week goes by without some corporate sequoia crashing to earth. The clamor over celebrated sackings heralds a broader reality. ''The average tenure of the chief executive is going down,'' says Professor Thomas Whisler of the University of Chicago's Graduate School of Business."

http://money.cnn.com/magazines/fortune/fortune_archive/1987/08/31/69486/index.htm

You can;t have it both ways: either we live in a greedy capitalist society where money and the bottom line are all that are important or nepotism is the deciding factor.

The reality: in business the bottom line is important but is balanced against the company mission statement to be honest but in government where profit is not important nepotism rules the day.

 

[GenSeneca]

you just go start a company, with no workers, use no roads, also you have to be self educated, and all materials you use must be made by you with no help or shipping via anything you did not you yourself make....Now make it a fortune 500 company with those rules...

That in no way addresses the point I was making. You claim to have gone to college... Did the professors redistribute grades in order to reduce the "performance" gap between the students at the top of the class and those at the bottom?

 

[GenSeneca]

First, you would need to know about a curve thqt is not just a curve ball!

You are not addressing the points I have made and you're not answering the questions that I have posed.

Well, then you need to respect EVERYONE's individuality, and allow everyone to defend their opinions. . .

I am asking that you defend your opinions. You can start by addressing my points and answering my questions.

Preferably without resorting to childish and silly comments, even if I find them kind of cute, like those of a little pouting boy!

Lashing out and going on the offensive, attacking strawmen, using ad hominems, appeals to emotions and other logical fallacies, is not legitimate tactic for the defense of one's opinion.

 

[Dr.Who]

That in no way addresses the point I was making. You claim to have gone to college... Did the professors redistribute grades in order to reduce the "performance" gap between the students at the top of the class and those at the bottom?

I went to Mcdonalds for lunch today. Everyone had access to ketchup, salt, napkins, cup-lids, ice, lights, windows, chairs and unlimited drinks. Did the customer who sat at the bigger table get charged more for his food? Did they ask how much money anyone earned at the check-out? is it time for McDonald's to redistribute money by charging rich customers more because they have greater access to the resources? After all, the rich could afford to come in more often, or spend more time at a table.

In the end it does not matter if we are talking about grades, a product, a service, a benefit (like an insurance benefit), or something that the government provides, all people should get the same opportunities and all people should be able to purchase whatever they can afford based on how hard they work or how fortunate they are. Additionally, anyone who wants to share a table or some food with his neighbor can do so.

 

[Dr.Who]

Lashing out and going on the offensive, attacking strawmen, using ad hominems, appeals to emotions and other logical fallacies, is not legitimate tactic for the defense of one's opinion.

I seemed to have the sense that there was some mild snarkiness on your part. But when I went back to look at the post that Openmind was refering to I did not see it - perhaps it was in a different post?

If you were snarky then you could apologise.

But it is still true that lashing out, going on the offensive and the other things you mentioned are not substitutes for answering the questions.

 

[Openmind]

The board is the group with the most to lose if he does not perform. their own greed demands that they want the absolute best ceo that they can get - and to do that they are williing to pay what it takes. They are not likely to lose millons in their own personal portfolios to scratch his back. What they are is likely to fire his ass if he does not make a profit.


"WHAT IS THE BEST way for a board of directors to fire a company's chief executive officer? That's easy: quick, quiet, and cheap. In this imperfect world, though, it rarely works that way. Allegheny International was rocked by turmoil for months before Robert Buckley departed. BankAmerica replaced Sam Armacost amid headlines normally reserved for a Third World coup. And CBS got Tom Wyman to pack up only after agreeing to pay him some $4 million plus $400,000 a year for life. For CEOs, these are days of living dangerously. With raiders so active and stockholder suits against directors on the rise, the subject of how and when to get rid of a slumping chief executive officer has gripped boardrooms. Directors are becoming more analytical, more sophisticated -- and more nervous about subpar performance. Hardly a week goes by without some corporate sequoia crashing to earth. The clamor over celebrated sackings heralds a broader reality. ''The average tenure of the chief executive is going down,'' says Professor Thomas Whisler of the University of Chicago's Graduate School of Business."

http://money.cnn.com/magazines/fortune/fortune_archive/1987/08/31/69486/index.htm

You can;t have it both ways: either we live in a greedy capitalist society where money and the bottom line are all that are important or nepotism is the deciding factor.

The reality: in business the bottom line is important but is balanced against the company mission statement to be honest but in government where profit is not important nepotism rules the day.

And I believe that there is a middle of the road between runaway greed and nepotism.

Many very successful European corporations have been able to walk the line. .probably because of the more stringent labor laws, the universal health care, and the safety nets provided to all.

But, obviously, that is called "socialism" in some quarters!

 

[Openmind]

You are not addressing the points I have made and you're not answering the questions that I have posed.


I am asking that you defend your opinions. You can start by addressing my points and answering my questions.


Lashing out and going on the offensive, attacking strawmen, using ad hominems, appeals to emotions and other logical fallacies, is not legitimate tactic for the defense of one's opinion.

I have defended my opinions, and your responses are always to poopoo my answers, and to spin my words.

So. . .I guess that attempting to have you look at another point of view with openness and honesty is much too labor intensive for my liking, especially since whether you agree or not with ANY of my statement is kind of a moot point!

So. . .you keep your individual opinions, and I'll keep mine.

 

[Openmind]

The CEO does not set his salary the board does. And they do so because they want the company to make a profit and they think that hiring that particular CEO is a good way to actually increase the amount of money the company has. So obviously his greed is correlated with more money in the company to pay employees.

I bet if we looked at an actual measure of the correlation between CEo salaries and employee salaries we would see that companies that pay CEO's more also pay employees more.

Lets see if I can find that:

(I came across this. It does not answer the question but is interesting
http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/PayRatios.aspx
)

Ok, here is an abstract from an article that answers the question:

In this study we propose that norms of fairness are salient to top decision makers and show that over- or underpayment
of the CEO cascades down to lower organizational levels. Moreover, it appears that CEOs use their own power not
only to increase their own salaries, but also those of their subordinates. One implication of such a process may be that
the overpayment of a top executive has higher costs than have previously been realized. We also find evidence suggesting
that CEOs serve as a key referent for employees in determining whether their own situation is “fair,” and this influences
their reactions to their own compensation. More specifically, we find that when lower-level managers are underpaid relative
to the CEO—that is, underpaid more than the CEO or overpaid less—they are more likely to leave the organization.
Results obtained from testing our hypotheses on a sample of more than 120 firms over a five-year period demonstrates
the importance of considering fairness in the setting of CEO pay. Implications for the design of executive compensation
packages are discussed.


http://test.scripts.psu.edu/users/t/x/txp14/pdfs/os06.pdf

I have to admit that was not exactly what I expected. I thought that we would find that a board that spent a lot for a ceo would also spend a lot for employees in general. In fact what we found is that it is the ceo's themselves who get more who advocate for their employees to get more.

Meaning of course that if you want employees to get paid more then you want a ceo who gets paid more. It also shows that sometimes he does this contrary to the goals of the company to make larger profits - this is the opposite of greed since it lowers the value of his stock options.

Actually, the article talks about the overpaid CEO ALSO giving high remunerations to his SUBORDINATES, not to all his employees. Basically, the pay scale is "top heavy" in the top 3 or 4 level of the pyramid, and obviously, saving on total compensation package must occur some place. . .at the middle and bottom of the pyramid!

Re: stock options, CEO's and "critical management team" get preferred stock options, so there is NO WAY they can lose. They are actually able to watch the stock go up, not having to "advance the money" to purchase that stock, but call in a "sell" order once they are vested, just the day or the week before a dramatic "downturn" in the performance of the company!

Basically just to get hire, they get thousands, sometimes hundred of thousands of "stock options" at a dime a piece, EVEN if they are already worth $5.00 or $10.00. . .then they can sell them without having to invest their own money in purchasing them. . .they can just reap the profit between the "dime purchase price" and the stock's price the day they are vested. And every years, they get more of those "cheap," no risk stock options with their annual compensation package. So. . .they NEVER have to take a risk! If the stock goes down (could hardly go down any lower than the price of their options, anyway), but if it does go down, they just don't have to exercise their stock options. . .or wait until it goes back up. . .THEY have no personal investment in it. . .but are able to take full advantage of those when the stock goes up.

And. . .you know how, in the last 10 years or so, the fastest way to get the stock to go up has been: Lay off a few thousand people, and the stock goes up. . .because the "balance sheet" looks better!

Who cares about the "litte Indians" that were laid off?

 

[dogtowner]

Re: stock options, CEO's and "critical management team" get preferred stock options, so there is NO WAY they can lose. They are actually able to watch the stock go up, not having to "advance the money" to purchase that stock, but call in a "sell" order once they are vested, just the day or the week before a dramatic "downturn" in the performance of the company!

Basically just to get hire, they get thousands, sometimes hundred of thousands of "stock options" at a dime a piece, EVEN if they are already worth $5.00 or $10.00. . .then they can sell them without having to invest their own money in purchasing them. . .they can just reap the profit between the "dime purchase price" and the stock's price the day they are vested. And every years, they get more of those "cheap," no risk stock options with their annual compensation package. So. . .they NEVER have to take a risk! If the stock goes down (could hardly go down any lower than the price of their options, anyway), but if it does go down, they just don't have to exercise their stock options. . .or wait until it goes back up. . .THEY have no personal investment in it. . .but are able to take full advantage of those when the stock goes up.

well they could just get paid more I suppose but why not playh to their desire to expand their wealth by offering this incentive ? make the compan more valuable and you gain, cost it value and you lose. these folks don't like losing.

And. . .you know how, in the last 10 years or so, the fastest way to get the stock to go up has been: Lay off a few thousand people, and the stock goes up. . .because the "balance sheet" looks better!

been going on a lot longer than that with companies with unprofitable operations. if you know when to cut your losses then you free up capital to grow new ones.

Who cares about the "litte Indians" that were laid off?

well they could just allow the entire company to go under for failing to take responsible action.

 

[GenSeneca]

is it time for McDonald's to redistribute money by charging rich customers more because they have greater access to the resources?

To keep the analogy as close to their argument about taxation as possible, it would be like demanding that the top 1% of McD's customers pay for 40% of ALL the food that gets served in the restaurant, the top 10% paying for 75% of all the food served, the top 51% paying for 100% of the food, and the bottom 49% get to eat for free and then be taken seriously when they complain that they're not being given even more free food.

In the end it does not matter if we are talking about grades, a product, a service, a benefit...

My point was that inequality exists in many different places and in many different forms, yet the only inequality that the Left complains about is that of wealth.

Take for example the extreme "performance gap" that exists between a professional football player and the guy selling hot dogs at the refreshment counter. Surely that is "unsustainable", we can't have 1% of the population achieving althetic greatness while the other 99% of the population has no chance of achieving the same level of athletic ability, that simply isn't "fair".

Perhaps we need some kind of government program to "tax" away that wealth of "excess" athletic ability and spread it around... A politician might even say something along the lines of...

"It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance at success, too... I think when you spread the wealth around, it's good for everybody."

Of course, that would be rediculous...

 

[Openmind]

To keep the analogy as close to their argument about taxation as possible, it would be like demanding that the top 1% of McD's customers pay for 40% of ALL the food that gets served in the restaurant, the top 10% paying for 75% of all the food served, the top 51% paying for 100% of the food, and the bottom 49% get to eat for free and then be taken seriously when they complain that they're not being given even more free food.


My point was that inequality exists in many different places and in many different forms, yet the only inequality that the Left complains about is that of wealth.

Take for example the extreme "performance gap" that exists between a professional football player and the guy selling hot dogs at the refreshment counter. Surely that is "unsustainable", we can't have 1% of the population achieving althetic greatness while the other 99% of the population has no chance of achieving the same level of athletic ability, that simply isn't "fair".

Perhaps we need some kind of government program to "tax" away that wealth of "excess" athletic ability and spread it around... A politician might even say something along the lines of...

"It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance at success, too... I think when you spread the wealth around, it's good for everybody."

Of course, that would be rediculous...

Sorry guys! Your metaphores are getting more and more ridiculous and meaningless.

But, if you're happy with them, if you compare apples and oranges and only see "fruit," you win!

What is true though, is that the athletes are largely over paid if they belong to big, commercial teams, as compare to College footballs, where athletes are NOT paid and are often just as good.

There are excess in many areas, and wealth seems to be one area of huge excess. If you can't see that. . .okay.

It still doesn't make it right. . . at least NOT when we are talking about cutting spending on the poorest among us, but we get our feather's ruffled when the "fair" share in hardship is expressed as wanting the top 1% to actually SHARE in putting this country back on track, instead of continuing to accumulate the wealth while cutting the life line of the bottom 50%!