Sunday, January 17, 2010

Executive Excess: Final CEO Pay Numbers Reveal Jaw-Dropping Retirement Packages

Conservatives will acquiesce to executive pay excesses because as conservatives they possess an inclination to maintain the traditional order of things, an opposition to innovation or change, or in other words, maintain the status quo. That by basic definition is conservatism.

In regard to executive excesses, conservatives will say that is how the free market works. Middle class and lower class workers do not create jobs or wealth. Their mindset has always been that unless one can provide jobs and has the ability to create wealth, a person really is of little significance to society.

However, without these lower classes of people, the CEO, the upper class, or any business entity, would not make a profit or acquire wealth. They acquired what they have from the spending and labor of middle class and lower class people. They represent the greatest number of consumers.

Conservatives, who have the same mindset as these CEOs, want to continue to let health insurance companies manage our healthcare. To maintain what has been traditionally done. In authentic conservatism fashion, they want the status quo maintained. These are the same folks, as the article points out, who wanted to privatize Social Security. Just think where we would be now if the management and investment of Social Security were left up to Wall Street. These, too, are the same folks who will cancel or increase your auto or home insurance policy because you may have had an accident. Maybe I am confused, but isn’t that exactly the reason insurance is purchased in the first place.

If I have $100, and I equally distribute that amount to 9 other people, each of us will have $10. However, if it is determined that I deserve more than the others do because I manage the money, and I impose a fee of $1 from each of the 9, then I will have $19 and all others will have $9. Now, to some that may seem reasonable, and I suppose it is in consideration of the free market paradigm. But, if I instead pay myself $91, then everyone else will have a mere $1 each. That is unreasonable. This hypothetical fundamentally will be no different based on whatever complexity of scale is envisioned, or complex praxeological differences there may be in the market place.

There essentially is not any difference in the example than the game of monopoly. There may be some nuances that make it different, but it is essentially the same concept when it comes to the distribution and the vicissitudes of money. In “What's Wrong with Monopoly (the game)?,” by Benjamin Powell, he points out “the game seriously misrepresents how an actual market economy operates.” Nevertheless, when the complexities, variances in human nature, and all other dimensions that may exist are removed, in the end it amounts to the same thing.

That’s the situation: if someone acquires some privilege to have more dollars than someone else does, and the Fed does not print more money, everyone else, in the larger scheme of things, will have less. Of course, people simply use credit to purchase what they don’t have cash to pay for, paying their debt incrementally. And, those same folks with the same aforementioned mentality continue to gouge us with interest rates -- just consider how credit card companies circumvent credit law, and are now increasing interest rates in anticipation of the new law protecting consumers from sudden increases in interest rates.

In every sense of the word, all of these folks, from CEOs of big oil, insurance companies, retailers, to any other free market capitalist, for the most part are scoundrels. Their sole motivation is profit, and they will sell their soul for the sake of profit. “The rich rule over the poor, and the borrower is the slave of the lender.”

So, technically, for example, if Exxon Mobil Corp. CEO Lee Raymond, receives a pay increase, a bonus, or some other compensation, he gains a greater piece of the pie while others will receive less. Of course, that doesn’t happen, because consumers will simply borrow more, inflate the economy on borrowed money, create a situation of "irrational exuberance," the fed will fire up the printing press, and eventually we will all be in economic difficulty again, and again, and again. If we are going to depend on a money-based economy, it is absolutely necessary to return to the gold standard.

Literally, “The love of money is the root of all evil.” The solution to the problem, and just about to every problem: We need to evolve over time to a moneyless society. It’s absolutely necessary to take the profit out of many things, eventually out of everything, but especially, right now, healthcare. And, by the way, over time, it can be done; it is not a utopian concept.