[Vision2020] CEO Dough: 78/1 In 1978: 821/1 Now
Ted Moffett
starbliss at gmail.com
Mon Sep 25 10:52:06 PDT 2006
Wayne et. al.
Bush is doing "one heckufa job on the economy" if you are in the top 1%.
I immediately thought of the Moscow Food CO-OP for a local "business" that
does not make "profit" that provides jobs, benefits, and a humble salary for
management, that benefits the community in many ways, and works to continue
success, seemingly without the motivation for those involved to get "rich"
by USA standards.
The out of control compensation USA CEOs receive in the corporate business
world reinforces the theme of Nick's article. Nick touched on this in
mentioning the increases in the wealth of those at the top 1% compared to
those in the lower economic classes. The CEO to worker pay ratio has
climbed to such an outrageous level of inequality, while offering CEOs huge
guaranteed economic rewards, even if their corporation goes into debt or
goes under, that even the business world is worried about this trend!
I find it astonishing that CEOs can live like a king or queen with
guarantees of personal economic reward even if their decisions may bankrupt
their company. How is continuing or increasing profit motivating a CEO who
knows he will make millions of dollars even if his company goes under? And
if huge wealth is being generated at the top, based on worker productivity,
why is this wealth not shared more equally with the workers who are part of
the reason for this success? They don't deserve it?
The current system can be viewed as treating CEOs as royalty with a
guaranteed "silver spoon," while the serfs struggle along in the dog eat dog
world of competitive economic survival.
According to this web link from the Economic Policy Institute, the CEO to
worker ratio was 78 to 1 in 1978, now it is 821 to 1.
http://www.epinet.org/content.cfm/webfeatures_snapshots_20060627
And read in this article how business leaders are concerned about these
trends:
http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/10/8380799/index.htm
Here are a few statements from this web link article:
And Phil Purcell was sent packing from Morgan
Stanley<http://money.cnn.com/quote/quote.html?symb=MS>(
Charts <http://money.cnn.com/quote/chart/chart.html?symb=MS>) last summer
after earning $22 million in his final year as boss, plus $43 million in
severance, for delivering a 25% decline in the firm's stock price since
2001. Ouch.
--------
CEOs are concerned about the uproar over excessive executive compensation -
backdating stock options to boost some bosses' pay, golden parachutes for
world-class nonperformance, retirement packages that defy economic logic.
----------
"Nothing offends more than executives being paid for failure," says
investment fund superstar Eddie Lampert, who now owns Sears and
Kmart<http://money.cnn.com/quote/quote.html?symb=SHLD>(
Charts <http://money.cnn.com/quote/chart/chart.html?symb=SHLD>).
-------
Vision2020 Post: Ted Moffett
@moscow.com> wrote:
> Matt,
>
> You asked for an example of a successful business that does not show a
> profit. I will give you a true life example from in the past in Boundary
> County. Those who have lived there might recognize it, but I will not
> name
> it.
>
> A hardware store was owned by two families. With few exceptions, all the
> employees were family members. Finally one family bought the other out.
> After that, with one exception for awhile, all employees were from the
> owner's extended family. That one non-family member was quietly let go
> when
> it was discovered that he was skimming the till.
>
> The business did well enough to pay the salaries of all employees and
> their
> benefits. From conversations from the owner I know he claimed that some
> years he made a small profit; some years there was a small loss. He
> claimed
> it was a break even business. It did however, as part of his business
> expenses, provide salaries and benefits to many family members which
> enabled
> them to live, not handsomely, but fairly well.
>
> The business made little or no profit. It stayed in existence for many
> years. It supported a large extended family for a long period. It
> provided
> for the community a valuable service. It was greatly mourned when the
> owner
> decided to retire and close the business.
>
> In my experience there many small businesses such as that. They provide a
> living for several people but do not necessarily show a profit over the
> long
> haul. I merely gave this point in the previous before as a counterexample
> to the foolish statement that all businesses must show a profit to expose
> the falsity of the claim that such was so.
>
> There are several large for-profit corporations which have ran at a loss
> for
> several years. Yet they do provide jobs, benefits, business for their
> vendors, etc. Despite this reality, I do not recommend this as a
> favorable
> model to follow, however.
>
> Also, there are enterprise models where profit is not only not part of the
> goal, but never occurs -- those are the large number of non-profit
> organizations who also provide jobs, benefits, etc, and in some cases
> outrageous compensation to certain employees and who do not pay taxes --
> in
> this respect some of these enterprises are parasites.
>
> Unless I am mistaken, even Jeff Harkins, whose is a staunch defender of
> barely limited free enterprise, but who is also educated, would agree that
> a
> zero-sum profit economy is possible. Jeff and I would probably also agree
> that such an economy may not be desirable.
>
> You can lecture me about small businesses all you want. I ran one for 35
> years. One of the products of that business was to help other businesses
> perform both more effectively and more joyously. With one exception in 35
> years, all my clients were very satisfied. The one who was disgruntled
> was
> a restaurant owner whom I told that it was not realistic to expect his fry
> cook to also do the books and planning for the business in her slack time.
> I provided consulting services, to among other things, several restaurants
> as well as writing and selling restaurant management/performance measuring
> software. On the basis of that experience, I think there a restaurant in
> Moscow which is not going to make it for very long without some wholesale
> changes in the way they operate, and who have already had part of their
> name
> changed to "Worst of" by several persons.
>
> I do not disagree that running a small business generally means "busting
> your ass" and the attendant sacrifices that such entails. It also means
> taking risks. Only about 1 in 3 small start-up businesses generally
> survive
> for more than 2 years.
>
> My "true colors" are hardly secret. I can be very nasty. I do not suffer
> fools gladly nor do I respect religious, political, or economic asininity,
> hypocrisy, or dishonesty. I hope that we agree that so far in this
> country,
> both of us are free to express opinions on such subjects.
>
> Wishing you the best in what has to be a very difficult business in an
> area
> finally becoming visibly concerned about the long term availability and
> quality of water,
>
> Wayne
>
>
> ----- Original Message -----
> From: "Matt Decker" <mattd2107 at hotmail.com>
> To: <deco at moscow.com>; <vision2020 at moscow.com>
> Sent: Sunday, September 24, 2006 3:02 PM
> Subject: Re: [Vision2020] You're Doing One Heckufa Job on the
> Economy,Bushie!
>
>
> > Wayne,
> >
> > Please do explain in more detail how a business can survive without
> > profits. Or why they would want too. Many of small businesses are just
> > trying to make it. Some do, other don't. Without profit, there is no
> > incentive to continue. Why would a person start something up, bust their
> > ass, only to find out they made the same they could have working at
> > Mcdonalds. Profits for MOST SMALL BUSINESSES ARE THE TAKE HOME SALARIES
> > THEY TAKE HOME, not just the remaining profits, which would be a
> > bonus/great year.
> >
> > I agree one should not over simplify an arguement, but to call someone
> > stupid and ignorant shows much about your true colors. Including your
> > ability to not understand the meaning/strive of a businessman.
> >
> > Would love to talk to you about this one, but leave the insults out of
> it.
> >
> > Matt
> >
> >
> >>From: "Art Deco" <deco at moscow.com>
> >>To: "Vision 2020" <vision2020 at moscow.com>
> >>Subject: Re: [Vision2020] You're Doing One Heckufa Job on the
> >>Economy,Bushie!
> >>Date: Sun, 24 Sep 2006 08:59:22 -0700
> >>
> >>Many small businesses thrive with little or no profit (profit = income -
> >>expenses*). However, they do provide income for employed family
> members
> >>and others in the form of wages, benefits, etc (all part of *expenses).
> >>Some go on like this for years. Hence, making is a profit is not
> >>necessarily a requirement for a successful business. However, it best
> not
> >>to incur losses.
> >>
> >>Losses do not necessarily mean that a business is a complete failure,
> >>either. Even if a business eventually goes out of existence, they have
> >>provided jobs and benefits for their owners/employees, income for their
> >>vendors, etc as well as having provided goods/services to the community.
> >>
> >>So when someone makes the over-simplified, ignorance laden statement
> that
> >>"Without profit, there are no jobs, without jobs there are no pay
> checks,
> >>except for those who are on entitlement programs" one is again sadly
> >>reminded that no matter how hard we try to provide a decent education
> for
> >>all, there are bound to be some failures in this attempt.
> >>
> >>
> >>Don't get me wrong, I have no objection to businesses making a fair
> >>profit.
> >>I am not against enterprise, fair/ legal competition, and individual
> >>initiative, but strongly for it as I have benefited directly from such.
> >>
> >>I am against the belief that enterprise should be left without reins and
> >>unregulated and its effects debated without reference to the
> consequences
> >>to
> >>the totality of the milieu in which it operates or proposes to operate.
> >>Only a fool would believe that unfettered enterprise is healthy and
> >>wonderful, even if that fool only read a newspaper once in their lives.
> >>There is room for rational debate about how much regulation is needed
> >>generally and in specific cases.
> >>
> >>What I object to in this thread so far is the over-simplification of a
> >>very
> >>complex issue. In the case of some of the participants, this
> >>over-simplification is the result of ignorance and congenital dumbness.
> >>With others, business people who should know better, it is a dishonest
> >>attempt to obscure the issues and to smear those not in agreement
> without
> >>having to resort to facts or rational argument.
> >>
> >>W.
> >>
> >>
> >>----- Original Message -----
> >>From: "Dick Sherwin" <rvrcowboy at clearwire.net>
> >>To: "Vision2020" <vision2020 at moscow.com>; "Kai Eiselein, editor"
> >><editor at lataheagle.com>
> >>Sent: Friday, September 22, 2006 4:09 PM
> >>Subject: Re: [Vision2020] You're Doing One Heckufa Job on the
> >>Economy,Bushie!
> >>
> >>
> >> > You are correct, Kai. Business is not only about making a profit, it
> >> > is
> >> > imperative that business make a profit. Without profit, there are no
> >> > jobs,
> >> > without jobs there are no pay checks, except for those who are on
> >> > entitlement programs.
> >> >
> >> > Only a true socialist would put down business for making a profit.
> >>Hence,
> >> > the prattling of Nick Gier.
> >> >
> >> > Dick S
> >> > ----- Original Message -----
> >> > From: "Kai Eiselein, editor" <editor at lataheagle.com>
> >> > To: <nickgier at adelphia.net>; <vision2020 at moscow.com>
> >> > Sent: Friday, September 22, 2006 10:50 AM
> >> > Subject: Re: [Vision2020] You're Doing One Heckufa Job on the
> >> > Economy,Bushie!
> >> >
> >> >
> >> >> Ummmmm, productivity has gone in profits, not wages....... Last time
> I
> >> > checked business was about making profit..... Which is good, because
> >>thats
> >> > what PAYS WAGES! yeeesh Nick
> >> >>
> >> >> -----Original Message-----
> >> >> From: vision2020-bounces at moscow.com
> >> >> [mailto:vision2020-bounces at moscow.com]On Behalf Of
> >>nickgier at adelphia.net
> >> >> Sent: Friday, September 22, 2006 10:38 AM
> >> >> To: vision2020 at moscow.com
> >> >> Subject: [Vision2020] You're Doing One Heckufa Job on the Economy,
> >> >> Bushie!
> >> >>
> >> >>
> >> >> Greetings:
> >> >>
> >> >> I decided to get my radio commentary out of the way early this week,
> >> >> so
> >> > that I can work on my book on religious violence. This is the longer
> >> > version.
> >> >>
> >> >> Thanks, Saundra, for saving me the trouble of trying to switch to
> >> > Time-Warner. I don't want a RoadRunner e-mail address, but on second
> >> > thought, it might help me outwit the witless coyotes down the hill.
> >> >>
> >> >> YOU'RE DOING ONE HECKUFA JOB ON THE ECONOMY, BUSHIE!
> >> >>
> >> >> Nick Gier, Professor Emeritus, University of Idaho
> >> >>
> >> >> Note: BLS stands for Bureau of Labor Statistics
> >> >>
> >> >> President Bush keeps telling us that the economy is growing, but
> "The
> >> >> Wall
> >> > Street Journal" reported (3/27/06) that most of that productivity has
> >>gone
> >> > into profits not wages. A "The New York Times" editorial explains:
> >>"Wages
> >> > and salaries now make up the lowest proportion of the economy since
> >>1947,
> >> > while corporate profits have climbed to their highest since the
> 1960s"
> >> > (8/29/06).
> >> >>
> >> >> Worker productivity has gone up 18.4 percent, but wages are down, so
> >>any
> >> > additional income has obviously gone to the rich, not the poor and
> >>middle
> >> > class. The poverty rate has gone up 17 percent since 2000. Those in
> >>deep
> >> > povertyâ€"$7,800 for a family of threeâ€"number the highest since
> 1975,
> >>when
> >> > such surveys began.
> >> >>
> >> >> During the 1950s and 1960s, median household incomes doubled, but
> >> >> since
> >> > 1979, the lower classes have experienced no wage increase at all,
> while
> >> > middle class income has increased by a mere $200 per year. In stark
> >> > contrast, the top 1 percent of Americans has enjoyed a 111.3 percent
> >>raise
> >> > (Rocky Mt. News, 5/2/06). The Census Bureau reports that median
> family
> >> > income for those 25-34 has dropped 5.9 percent during the Bush
> >> > administration.
> >> >>
> >> >> Bush also brags about the low unemployment rate, but there are many
> >> > important qualifiers. The rate is actually 10 percent higher than
> when
> >>he
> >> > took office, and the number unemployed longer than 26 weeks has
> climbed
> >>57
> >> > percent (BLS, 7/7/06). Many have simply dropped out of the job
> market,
> >> > because there are 1.7 percent fewer people working now than in April
> >>2000.
> >> >>
> >> >> Three million manufacturing jobs have been lost (BLS, 7/7/06) to new
> >>jobs
> >> > in the service sector and other low paying positions, half of which
> are
> >> > part-time and offer no benefits (LA Times, 7/24/06). Bush has the
> >> > worst
> >> > job
> >> > growth record since the Great Depression (BLS, 7/7/06). Excluding
> >> > farming,
> >> > 22.7 million jobs were created during the Clinton years, while only
> 2.3
> >> > million have come on line under Bush.
> >> >>
> >> >> Entry level wages for college graduates have fallen 4 percent over
> the
> >> > last five yearsâ€"7.3 percent for men and 3.5 percent for womenâ€"the
> >>first
> >> > decline in 30 years. Health coverage for this same group has fallen
> by
> >> > 7
> >> > percent. Health insurance premiums have risen 71 percent over the
> same
> >> > period, making it more likely that these young families will be faced
> >>with
> >> > bankrupting medical bills. In 2005 1.3 million more Americans were
> >> > without
> >> > health coverage for a total of 46.5 million.
> >> >>
> >> >> Apartment rents and house prices have climbed steeply. The American
> >>dream
> >> > of owning your own home is now just that for many young
> Americans. The
> >> > housing affordability index is at its lowest since 1987. With house
> >>values
> >> > dropping and interest rates rising, recent home owners, who were
> >> > seduced
> >> > by
> >> > no down payments and adjustable rate mortgages, may soon find that
> they
> >> > owe
> >> > much more on their mortgages than their homes are worth.
> >> >>
> >> >> Americans have always had the lowest savings rate in the world. Now
> >>this
> >> > rate has gone into the negative, which means that we are spending
> more
> >> > than
> >> > we earn. People under the age of 35 are spending a whopping 16
> percent
> >> > more
> >> > than they take in. In 2005 Americans had the worst ratio of household
> >>and
> >> > mortgage debt to disposable income in 25 years. We are also buying
> more
> >> > goods from other countries than we are exporting. In 2005 the trade
> >> > deficit
> >> > reached $726 billion, twice the size of 2001, due in large part to
> >>imports
> >> > from China.
> >> >>
> >> >> Because of Bush's tax breaks, the total national debt has increased
> $3
> >> > trillion in 5 years, a 54 percent increase, beating Reagan's record
> of
> >> > $1.6
> >> > trillion in 8 years. China, Japan, and other countries also hold $1.2
> >> > trillion of our national debt, and they could decide to unload those
> >> > bounds
> >> > at any time. Because of the declining value of the dollar, OPEC
> >>countries
> >> > could also decide to price their oil in stronger euros instead of
> >> > weaker
> >> > dollars.
> >> >>
> >> >> As economist Jayati Ghosh states: "The U. S. public merrily
> continues
> >>to
> >> > spend its way through the rest of the world's savings," borrowing
> $600
> >> > billion alone in 2005. The American grasshoppers' long summer of
> >> > overconsumption will eventually end, and the world's ants, some of
> them
> >> > putting away 30 percent of their income, will come out on top.
> >> >>
> >> >> Europeans stood firmly with us after 9/11, assuming that the U. S.
> >>would
> >> > seek a multilateral solution to terrorism, but now 71 percent of them
> >> > believe that Bush is the greatest threat to world peace. Many
> >> > Americans
> >> > now
> >> > have good reason to believe that Bush's domestic policies are
> >>undermining
> >> > their financial security and their children's economic future.
> >> >>
> >> >> Way to go, Bushie!
> >> >>
> >> >>
> >> >>
> >> >> =======================================================
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> >> >> http://www.fsr.net
> >> >> mailto:Vision2020 at moscow.com
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> >> >> This message was checked by NOD32 antivirus system.
> >> >> http://www.eset.com
> >> >>
> >> >>
> >> >>
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> >> >> http://www.fsr.net
> >> >> mailto:Vision2020 at moscow.com
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