There's a Bubble That Still Threatens the Entire American Economy ... and Few Are Talking About It

[marmar]

There's a Bubble That Still Threatens the Entire American Economy ... and Few Are Talking About It

By Sarah Anderson and Sam Pizzigati, AlterNet. Posted September 2, 2009.

Outrageously large rewards for executives give executives an incentive to behave outrageously -- and engage in behaviors that put the rest of us at risk.




At the Institute for Policy Studies, we've been tracking our nation's astounding executive pay bubble since 1994. We began our annual "Executive Excess" series because we believe that excessive executive compensation has deeply troubling consequences, for both our economy and our polity.

To put the matter most simply: Outrageously large rewards for executives give executives an incentive to behave outrageously -- and engage in behaviors that put the rest of us at risk.

Over the years, we've documented, for instance, how CEOs who downsize, outsource and cook their corporate books have consistently collected bigger paychecks than even the average overpaid U.S. top executive.

Now looking back on our work, we plead guilty to a lack of imagination. We didn't imagine, even in our most cynical moments, that America's top executives -- in their chase after fortune -- would be reckless enough to melt down the entire global financial system.

Since last September, all sorts of analysts and public officials have pinpointed executive excess right at the heart of the recklessness that brought the United States -- and the world -- to the brink of economic cataclysm. ...............(more)

The complete piece is at: http://www.alternet.org/workplace/142325/there%27s_a_bubble_that_still_threatens_the_entire_american_economy_..._and_few_are_talking_about_it/

[MannyGoldstein]

1. Fortunately, Obama Has Cracked Down On This

Specifically, he's developed strong regulations for the bankers that caused our recent meltdown.

What? You say he hasn't done a single thing to regulate them? Nothing? Zip? Nada? Oh wow.

[TankLV]

11. Good one! But - but - but Obama SMILES a lot and has CUTE KIDS running around the White House now

and he has REPAINTED the BEDROOMS!!!

Can't you see all the GREAT STUFF he has done?!!!


me neither...

[MercutioATC]

2. That's not a "bubble", and capping executive pay is not the answer.

The executives of a given company have a duty to the SHAREHOLDERS, not some amorphous "good of the nation"...and that is as it should be. Suggesting that we legislate private sector executive pay is just silly.


The "solution" is to legislate (through trade policy and the tax code) benefits for companies to act in ways that make our nation stronger.

[nebenaube]

3. So, they are not citizens then?

Rising to CEO status waives the responsibility of citizenship? I don't think so.

[MercutioATC]

4. In their capacity as CEO, it ABSOLUTELY does.

...and, if you want to get technical, that responsibility to the shareholders is a legal requirement.

[CrispyQ]

5. Regarding corporations duty to shareholders, I disagree that "that is as it should be."

There was a time when "...the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end."

http://reclaimdemocracy.org/corporate_accountability/history_corporations_us.html

more...

States also limited corporate charters to a set number of years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets were divided among shareholders. Citizen authority clauses limited capitalization, debts, land holdings, and sometimes, even profits. They required a company's accounting books to be turned over to a legislature upon request. The power of large shareholders was limited by scaled voting, so that large and small investors had equal voting rights. Interlocking directorates were outlawed. Shareholders had the right to remove directors at will.

In Europe, charters protected directors and stockholders from liability for debts and harms caused by their corporations. American legislators explicitly rejected this corporate shield. The penalty for abuse or misuse of the charter was not a plea bargain and a fine, but dissolution of the corporation
=====

I believe our founding fathers had the right idea in limiting corporate power & abuse. Artificial entities should not be allowed to implement business policies & practices that harm human communities. The current multi-national corporations behave like sociopaths & you can see the destruction they wreak across the globe. I don't have a problem with operating for profit, but when a corporation behaves in ways that cause devastation & harm to human communities, that's wrong. The corporation's duty to shareholders should be second to their duty to the human communities where they reside and where they practice their business.

[fasttense]

6. All American citizens have a duty to their country, whether they are CEOs or politicians.

If their shareholder wont and can't get the CEO to act like a normal rational citizen then the corporation should be killed off like any other criminal (or at least prevented from continuing to reek havoc in the community).

If I were to use a toxic poison on my farm, it leaked over to my neighbor's well water, killed him and his family, I would be tried for involuntary manslaughter (or murder) and would be prevented from ever doing such a thing again (because I would be in prison). Yet, when CEOs and their scapegoated shareholders, inadvertently kill their workers or people who live around their toxic factories, nothing happens to the CEO, corporation or the shareholders. Why aren't they tried for involuntary manslaughter or murder and made to stop killing people?

If a corporation denies a person medical payment for a procedure that would save their life and that person dies, the corporation is responsible for that person's death and should be tried and jailed like anyone else.

How many children have been poisoned by lead toys? How many babies have been killed in poorly designed strollers, cribs or car seats? How many people with medical insurance have died or gone bankrupt from denial of payment for necessary medical care? How many of us have been poisoned by the daily toxic waste spewed by factories or vehicles? These are but a few of the examples of damages and murders committed by corporations in the name of "free" markets.

Yet these criminal corporations made up of CEOs and Shareholders continue to maim and murder our citizens and are never held accountable.

[MercutioATC]

12. You bring up an interesting (but wholly unrelated) question.

In light of legal corporate "personhood", should corporations be held criminally liable for their actions in the same way that non-incorporated people are?

[tiny elvis]

9. legislate benefits for companies

nothing mandatory
what if the opposite of ways that make our nation stronger remain more beneficial to them than non binding legislation?
there is a thoughtless presumption of good will on everyone's part in that unnaturally salesman like statement
the SHAREHOLDERS are the same group as the executives, so the executives as a group legally have a duty to themselves
plus plus + doubleplusgood

[MercutioATC]

10. Look, I worked a midnight shift last night and I'm still up...

My suggestion is to legislate voluntary trade and tax laws for corporations that would make it economically advantageous for them to act in ways which were also beneficial to our economy.

Corporations don't outsource labor because they're evil, they do it because doing so increases their profits. If trade and tax laws made it advantageous for corporations to keep jobs here, they'd do it.


You may be agreeing with me, but your post is a little random. Hope I clarified my position.

[tiny elvis]

13. taste, i was dreaming when i wrote this

selfish indifference to others will do well for a definition of evil
corporations outsource labor because they are evil
it is their nature
they are gigantic organisms without conscience or feeling
there are no good intentions
paying more than criminal negligence is a half baked, subservient plan
it is worse than nothing, because it will only make them richer
already they have the wealth to laugh at such proposals
what is missing from your suggestion?
i'm out of time gotta go

[Bluenorthwest]

7. Many of our peer democracies do in fact cap executive pay

and it works out very well for them. It is not usually an actual limit, but rather a ratio of pay- if the top guy gets X, the lowest pay can only be a certain percentage less than X.
This system works out well and we should have the same thing here. It makes for better companies, and a better country.

[scentopine]

8. It isn't salary - its hush money

for the crimes that get committed in the name of profits.

Our corporate centered government will keep bailing out these companies even as they rape their workers and the tax payers.

Its all about money and personal gain and nothing else.

Thank our business schools the onset and rise of the MBA - these "masters" of business are completely crooked and amoral and destroying the American economy and competitiveness.

[dgibby]

14. Until we:

get rid of corporate personhood, change our campaign finance laws, and break up these banks and other entities that are too big to fail, and break up the MSM monolopies, we can kiss this country good-bye.

[Shireling]

15. Agreed

Why can't we do what is morally right? :shrug:

[dgibby]

16. Greed! n/t