A disgusting statistic
In a sign of our times, I quote the following statistic reported by Bob Herbert in today's NY Times [subscription wall]:
If you add up the combined pay increases earned by the 93 million nonsurpervisory workers (excluding farmers) in the U.S. since 2000 (that's six years of earnings) they total less than half the bonuses awarded this year by just five Wall Street Firms, more than half of which went to their 1,000 or so highest paid managers. This is despite the fact that the productivity of the 93 million has risen 18 percent over the period.
So, 1,000 guys on Wall Street made more in bonuses in one month than 93 million hard working Americans got in pay raises since 2000.
And, of course, the 1,000 were taxed a lot less on those bonuses than they would have been six years ago.
All of which brings me to another article in today's NY Times which tells us that the highest paid CEOs are now moving from public companies to private companies where there is less oversight from from regulators and shareholders.
I'm inclined to think this is all for the best. I am utterly convinced that the vast majority of these rich fat cats are not worth a small fraction of what they are paid in salary and bonuses and golden parachutes and back-dated options and the like. If scrutiny by the shareholders and the public is driving them out of the management of public companies, I suspect this will raise the average quality of management in those companies, but, even if it doesn't, it will certainly lower the cost. That savings, in turn, could be used to incentivise the 93 million workers referred to above to even greater productivity gains.
Meanwhile, let the private companies, owned largely by the hedge funds and private capital funds of the Wall Street fat cats and the over-wealthy, wallow in the excess expense of their jet set CEOs. Maybe this will be the ultimate market test of whether these guys are worth anything close to what they are paid.
Unfortunately, I suspect that when push comes to shove, these private companies will be sold back to the public market at ten times their now greatly diminished true value after their earnings have been fudged with little oversight from the SEC and the auditors (see Enron) and after their dim prospects have been touted and exagerated on MSNBC by the same Wall Street fat cats that invested in them when they were private.
Who gets screwed? Naturally, it's the average guys -- even the average rich guys. Only the super wealthy win in this society.
If you add up the combined pay increases earned by the 93 million nonsurpervisory workers (excluding farmers) in the U.S. since 2000 (that's six years of earnings) they total less than half the bonuses awarded this year by just five Wall Street Firms, more than half of which went to their 1,000 or so highest paid managers. This is despite the fact that the productivity of the 93 million has risen 18 percent over the period.
So, 1,000 guys on Wall Street made more in bonuses in one month than 93 million hard working Americans got in pay raises since 2000.
And, of course, the 1,000 were taxed a lot less on those bonuses than they would have been six years ago.
All of which brings me to another article in today's NY Times which tells us that the highest paid CEOs are now moving from public companies to private companies where there is less oversight from from regulators and shareholders.
I'm inclined to think this is all for the best. I am utterly convinced that the vast majority of these rich fat cats are not worth a small fraction of what they are paid in salary and bonuses and golden parachutes and back-dated options and the like. If scrutiny by the shareholders and the public is driving them out of the management of public companies, I suspect this will raise the average quality of management in those companies, but, even if it doesn't, it will certainly lower the cost. That savings, in turn, could be used to incentivise the 93 million workers referred to above to even greater productivity gains.
Meanwhile, let the private companies, owned largely by the hedge funds and private capital funds of the Wall Street fat cats and the over-wealthy, wallow in the excess expense of their jet set CEOs. Maybe this will be the ultimate market test of whether these guys are worth anything close to what they are paid.
Unfortunately, I suspect that when push comes to shove, these private companies will be sold back to the public market at ten times their now greatly diminished true value after their earnings have been fudged with little oversight from the SEC and the auditors (see Enron) and after their dim prospects have been touted and exagerated on MSNBC by the same Wall Street fat cats that invested in them when they were private.
Who gets screwed? Naturally, it's the average guys -- even the average rich guys. Only the super wealthy win in this society.
posted by walldon | 8:55 AM
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