As a taxpayer, there is no chance that I will approve of even $500K of my money going into the trough of a failed corporate pig, pretty much regardless of the consequences.

Quite honestly, I believe many of these scoundrels and looters should be hung (after a duly constituted tribunal of course).

I am a lifelong Republican and staunch free market advocate.

Barack Obama may have more personal culpability in this mess (from his days as a community organizer-extortion artist) than any banker. Peter Wallison explained how it all worked.

Barack Obama may have more personal culpability in this mess (from his days as a community organizer-extortion artist) than any banker. Peter Wallison explained how it all worked.

So, apparently unlike modgen, I read all this agreeing right the way through until the last sentence: "So any distortion in the pay structure toward risk taking was surely limited."

How, exactly would you back this up? Unless essentially all of the wealth of the chief executives is tied up in company shares (i.e. not leaving millions of dollars for an affluent retirement) then they have a large risk-inducing distortion relative to equity, and equity holders in turn have a similar distortion because of bankruptcy.

I work in the front office of an i-bank. At the desk level, the equivalent distortion is known as a trader's put and it looks a lot to me like many higher-ups took a giant punt on the MBS market.

In addition to the loopholes you mention, I think there will also be a lot of hedging compensation restricted to shares to a cash equivalent.

The main problem with wage (and price) controls is that they never work

Spoken like a true arm chair economist. What do you mean they don't work? Don't work politically? You must be kidding. Since when do equity/debt holders *not* get a say on executive compensation? My pay is decided by my bosses, and when the US government becomes an equity holder, they get a say on compensation. If the banks don't like this, they are welcome to return the TARP funds and enter bankruptcy proceedings.

For example, even a 100% overpayment to bank executives would usually have only a small direct effect on bank profits since their pay, however large in an absolute sense, was rather small compared to the normal profits of these companies.

You have got to be kidding. Investment banks have historically paid up to 50% of *revenue* in bonuses.

John you have me wondering how our Profs here would take to Joe the Plumber, teachers, police and all expecting 50% "performance" bonuses.

Just 25 years ago CEO's averaged 50 times working folk's pay, say a figure of about ONE million today; have we all been brainwashed to accept these guys carving off tens of millions or more?

Hail Caesar. Release Barabas and crucify the other guy.

Some of the comments made are laughable: "Moreover, severe limits on severance pay help to lock in incompetent executives who then might refuse to leave voluntarily because they would not receive any significant financial incentives to leave."

If all the corporations started giving significant financial incentives to get rid of incompetent people, people would start falling over to each other to prove their incompetence to get the golden parachutes.

This blog is typical of the arrogance personified by Wall Street who think they are the masters of the universe and are not accountable for anything.

The problem is not that the government is setting wages in the private sector. The problem is that the government is giving tax money to the private sector. Do you think that we should not impose any restrictions to those firms that receive help from the government? If we don't then it is just a transfer from the tax payer to some of member of the firm. I in fact happen to agree with the restrictions, and I would even like to see more distortive restrictions imposed. The worst it is for the companies to accept government money, the least likely they will accept it (in particular if the restrictions fall on executives), the end result being less of my tax dollars being channeled to firms that should have gone out of business already.

Price controls are never the solution However there is a fair amount of evidence that executive compensation in the financial industry is not competitive.

In 2006 Thomas Philippon and Ariell Reshef published a paper showing that compensation, adjusted for education, in the financial sector was 40% above the national average. They also demonstrated that this excessive compensation was correlated to deregulation in the financial sector. And, they further showed that this had happened before, in the years leading up to the Great Depression:

http://pages.stern.nyu.edu/~tphilipp/papers/pr_rev15.pdf

There's also some forthcoming research by Thomas F. Cooley and Gian Luca Clementi that evidently will show that in the financial sector, CEO wealth is far less sensitive to changes in shareholder value than in any other sectors, in spite of the fact that equity holdings are a more important component of compensation. In other words top managers of financial firms do not suffer as much when their firms perform poorly.

I suspect that corporate executive compensation in the United States in general is not competitively determined. It is much more extravagant than elsewhere in the world and yet there is little evidence our corporations are better managed. One factor may be that we allow management the power to determine which state to incorporate in, and needless to say they chose states whose corporate laws maxamize management power versus shareholder power. A federal law that gave this power to shareholders would improve accountability and probably result in executive compensation coming down to the level of mere mortals. But it seems we have this debate everytime corporate compensation comes under scrutiny and nothing is ever done about it.

The talk about whether Obama's pay cap is correct or justifiable misses the point. The cap is absolutely wrong because it applies the same cap to all companies. You don't need to be a free-market fan to see that.

The problem with bonuses and unrealistic salaries banking industry was that they came to be seen as an entitlement rather than a reward.

"I'm a banker, I made $5billion for my bank last year" deserves a $50million bonus.

"I'm a banker, that alone entitles me to $50 million bonus" deserves a punch in the face.

In the days of free market madness this attitude spread to industry as well. Thus there was no relationship between performance and reward.

Obama's pay cap will be counter productive. What is needed is self discipline and a return to reality.

دردشة صوتية

I would be surprised if Mr. Becker did not oppose the stimulus under similar analysis provided by Kevin Murphy, something along the lines of "f(1-L) here on the Freakonomics blog).

If one opposes the stimulus, is it really even sensible to quibble over such terms? The wage controls are optional, firms can simply not participate in the stimulus without them. This will drive the stimulus towards smaller institutions and large institutions with a great deal of legal and accounting competency, and away from some firms who do not actually need a stimulus for reorganization (and it may drive some firms out of the market).

Providing some pressure on firms to reject stimulus money seems a key part of any stimulus, and the form that pressure takes seems largely irrelevant. Taking stimulus money should have some cost, the nature of that cost barely matters.

Even if the wage controls cause a great misallocation of resources in a few firms, the loss due to wage controls seems a tiny footnote to the inefficiencies of the stimulus overall.

A far greater impact on our economy right now is manifested in the less optional wage controls on the low end. We're heading towards unemployment and deflation, it's time to reconsider minimum wages to help workers adjust to the situation without being forced completely out of work.

My equation and link got a bit shredded in the html conversion. For more on Kevin Murphy:
http://freakonomics.blogs.nytimes.com/2009/02/03/chicago-economists-on-the-stimulus-package/

Ian you got it exactly right in regard to the well deserved punch in the chops; but assuming no punch, how would you expect the prospective punchee to "return to reality" and develop any self-discipline? It strikes me that the lure of getting more in ones paycheck in a month than a median household would EARN in two decades would make giving up the habit voluntarily, difficult for most.

Ha! Mr Brownback: Do you want to take this opportunity to beat down one of the lowest minimum wages in the developed world to yet lower levels than what has taken place as Congress failed for so many years to adjust it for inflation? Could there be any other effect than that of putting more folks on welfare or making them more dependent on the bevy of inefficient transfer programs?

This is a cool blog.

!!!NewsFlash!!! Wall Street and its minions thumb noses at President and Congress after reports on actions for responding to the Economic Crisis by falling in excess of three hundred points.

Doesn't anyone see a problem here? And here we sit discussing the virtues or lack of, regarding Price and Wage controls. The Corporatocracy has won and relegated the Government to the position of an anachronism.

Long Live the Corporatocracy!

Well reasoned post above, Prof. Becker. Likewise as to your testimony before Congress this week.

I can't disagree with your post..But,what about pay caps for univ presidents.I think every school (except Hillsdale?) has students taking Fed money.Why shouldn't there pay be capped?And I propose starting with Mary Coleman,at U of Michigan.She makes our new football coach look good.
And I'm half serious here.Why not restrictuniv administration pay?

Often we hear teachers complain "…if a society sees it fit to pay its garbage collectors more than its teachers…" I always wonder why those teachers don't sign up to be garbage collectors. The same principle holds for corporate executives, as hard to believe as it may seem. In our imperfect model, the board decides who the CEO is and how much the CEO gets paid. If the company is public, they all are accountable to shareholders.

If you want to be paid a bundle, quit your job and set up your own business so you can appoint yourself CEO and pay yourself as much as you want.

The argument is valid that since the government holds equity in these companies under "rescue," the government must have a say on how the exec are paid. This is precisely why the government should not "rescue" these companies (by owning a piece of them) to start with. Lacking the profit instinct, the government cannot be a good business manager. Attempting to cap compensation is just the first folly; wait till the government starts to tell the auto companies what cars they must build and which cars people must drive! I argue that if not for the fact the government compelled banks to write subprime loans and urged Fannie and Freddie to buy them up, we would not be in such deep yogurt today. Such is the track record of government intervening into the private sector.

"Ha! Mr Brownback: Do you want to take this opportunity to beat down one of the lowest minimum wages in the developed world to yet lower levels than what has taken place as Congress failed for so many years to adjust it for inflation?"

As the minimum wage primarily hurts the working poor, yes.

"Could there be any other effect than that of putting more folks on welfare or making them more dependent on the bevy of inefficient transfer programs?"

Yes, as it is a price floor on labor, and as price floors cause surpluses, and as a labor surplus is unemployment, this would have the primary effect of employing more of those who need employment.

I am unsure what accounts for the widespread unfamiliarity with these outcomes. I find that unfamiliarity surprising, as Supply & Demand isn't a very novel theory, nor poorly tested, nor controversial among economists. I might recommend the Baumol and Blinder to familiarize yourself with its principles.

Salary caps work in the Australian Football League Prof Becker. Constrained competition can work in the labour market.

The 'loss of talent argument' might be valid if the talent pool was so extraordinarily thin at the top end to suggest there were only a few dozen / couple of hundred executives in the world who could make a good fist of running a salary cap affected company. Wall Street attracts a global labour force; surely there are enough sufficiently talented finance/corporate experts in the world who would be attracted to the firms affected by the salary cap. This is a distasteful example I am loathe to raise, but did the professions of international trade/banking & finance come to a screaming halt after the terrible loss of life on 9/11/01? No. No will the US banking industry suddenly become dramatically less efficient because of the possible loss of a few people who think a salary cap is too much to bare.

@ redmund sum: "If the company is public, they all are accountable to shareholders."

It's amusing to see so many people interested in economics who have apparently never heard of 'rent-seeking' behavior. As a brief look at the actual power of shareholders quickly reveals, shareholders have extremely limited means to limit corporate executives on any issue at all, and such authority as shareholder votes do have have been systematically resisted, obstructed, blocked and impeded by executives and boards.

Thomas B, Thanks for the response. But I'm not only familiar with the principles of supply and demand but several of the flaws that have resulted in every advanced nation having farm price support programs, min wage laws, along with a variety of work rules.

There are quite a few chapters in all econ intros I've seen that deal with the facts of many unorganized sellers of generic commodities having so little market power against well organized (and influential -- see Archer Daniels and Dwayne Andreas for a revealing glimpse into the game) that prices are routinely bid down below the costs of production.

Unorganized labor of little or even moderately high skills face the same effect, though exacerbated by FRB and other policies that ensure a 5% stated (10% real) unemployment rate as a bulwark against "inflation" which is apparently defined these days as any growth in median or lower incomes, while the topical gleanings of CEO's and Wall Street rascals have soared by 400% or more during the same 25 years.

As for supply and demand of labor it would be a good exercise for any who like to play around with the graphs to draw one up reflecting the realities of our current situation including China having permanent MFN status. In short it would appear that the SUPPLY of generic labor as well as quite skilled labor approaches infinity, at least in the case of our nation which has but 5% of the world's population. Thus! with limited and falling demand for labor it looks as though the Price would be virtually zero.

Perhaps that is what you are seeking? You sort of ducked the question of "more on welfare and transfer programs". Does that mean that you think those programs should be dismantled? As it's obvious that were Walmart to further lower it's token wages that the amount of subsidy from taxpayers would rise from the current level of One Billion each year.

A recent study in low cost OK showed $18 as the minimum wage that would maintain one person at a very basic level, yet there are many who earn but half that amount. What do you propose as those not achieving even the most basic std of living increase dramatically?

Assuming a "let em eat cake" in your devil take the hindmost world perhaps it's worthwhile to reflect on how Taliban and warring drug lords are able to raise armies for the price of food, and look around at the rising gang problem of our own nation and nearby Mexico.

Lastly, were we as impoverished as Afghanistan our options too would be few, but we aren't; we still have one of the higher GDP's and a per capita average income of $32,000 that would provide the average HH of three with $96,000 per year.

I see NO future in running our nation as a nation of gilded wealth among the very few while those near the bottom work for half or less what it takes to maintain life and continuing to try to patch it up with costly transfer programs. Do you?

PQuincy,

You are right that shareholders have very little power to limit what the execs can do. This is as it should be. For most people, the primary purpose of owning shares is not to participate in the running of the company, but to share the fruits of a well-run company. I don’t see the merit in having a million voices telling the managers what to do.

The typical shareholder has too little stake in the business to influence management decisions. But they can do two things: 1) They can sell their shares if they are not happy, or 2) they can buy more shares so they can acquire a more influencing position, as Carl Icahn recently did at Yahoo.

Jack:

"You sort of ducked the question of "more on welfare and transfer programs"."

I intended to imply that such transfers would go down, as eliminating the minimum wage would allow more who need the work to find employment.

"I see NO future in running our nation as a nation of gilded wealth among the very few"

I completely agree. Casting me as so brutally pro-rich and anti-poor might lead to some confusion about my position, so let me be clear: My largest priority is helping the working poor. You need not argue that we should help them, you only need argue that the minimum wage actually does help them, rather than hurt them. A few hundred years of theory and confirming empirical data seem to be against you.

You mention discrepancies in bargaining power, but there is uncoordinated and fierce competition for labor, so this does not apply. In fact, any labor surplus supported by wage controls would lessen the ability of workers to bargain for favorable terms or treatment, which illustrates another way the minimum wage hurts the working poor.

On the $18 an hour minimum wage, I think it's important to recognize that not everyone working a minimum wage job is doing so to support a family. In fact, adverse selection can occur when you increase the minimum wage, you attract more competitors for those positions who don't need the work as badly (suburban high school kids, say). The suburban high school kids, lured by the high wages, outcompete the struggling poor families, and push them onto the street. This is yet another way the minimum wage hurts the working poor.

Your discussion of foreign labor raises some interesting questions. I hesitate to reply too hastily, so forgive me for ducking this section for now.

I actually have a neutral to positive view of transfer programs. Given the marginal increasing utility of goods, it seems like taking a dollar away from a millionaire and handing it to a hundredaire is an easy net societal gain. The difficulty is in structuring such programs to minimize transfer costs and impacts on incentives, but I don't believe such problems are wholly insurmountable.

If it came down to it, and I don't think it does, I'd prefer transfer programs to a trebling of the minimum wage, because, once again, I believe that the minimum wage hurts the working poor.

My original point was that it was odd for Becker to complain about wage controls attached to a stimulus package he disagrees with. Perhaps, if nothing else, we might agree on Mr. Becker's inconsistency? :)

Jack:

"You sort of ducked the question of "more on welfare and transfer programs"."

I intended to imply that such transfers would go down, as eliminating the minimum wage would allow more who need the work to find employment.

"I see NO future in running our nation as a nation of gilded wealth among the very few"

I completely agree. Casting me as so brutally pro-rich and anti-poor might lead to some confusion about my position, so let me be clear: My largest priority is helping the working poor. You need not argue that we should help them, you only need argue that the minimum wage actually does help them, rather than hurt them. A few hundred years of theory and confirming empirical data seem to be against you.

You mention discrepancies in bargaining power, but there is uncoordinated and fierce competition for labor, so this does not apply. In fact, any labor surplus supported by wage controls would lessen the ability of workers to bargain for favorable terms or treatment, which illustrates another way the minimum wage hurts the working poor.

On the $18 an hour minimum wage, I think it's important to recognize that not everyone working a minimum wage job is doing so to support a family. In fact, adverse selection can occur when you increase the minimum wage, you attract more competitors for those positions who don't need the work as badly (suburban high school kids, say). The suburban high school kids, lured by the high wages, outcompete the struggling poor families, and push them onto the street. This is yet another way the minimum wage hurts the working poor.

Your discussion of foreign labor raises some interesting questions. I hesitate to reply too hastily, so forgive me for ducking this section for now.

I actually have a neutral to positive view of transfer programs. Given the marginal increasing utility of goods, it seems like taking a dollar away from a millionaire and handing it to a hundredaire is an easy net societal gain. The difficulty is in structuring such programs to minimize transfer costs and impacts on incentives, but I don't believe such problems are wholly insurmountable.

If it came down to it, and I don't think it does, I'd prefer transfer programs to a trebling of the minimum wage, because, once again, I believe that the minimum wage hurts the working poor.

My original point was that it was odd for Becker to complain about wage controls attached to a stimulus package he disagrees with. Perhaps, if nothing else, we might agree on Mr. Becker's inconsistency? :)

(Sorry for the double post!)

Thomas sez:

"I intended to imply that such transfers would go down, as eliminating the minimum wage would allow more who need the work to find employment."

.......... Not many "need work" at sub-min wage levels, what they DO need is a paycheck, hopefully, as mentioned, might come close to covering the most basic std of living. The transfers are, in fact, increasing, and I was stunned, really, to hear Bernanke testify before Congress that were he forced to choose between increasing the min wage or increasing the EITC subsidy for low income workers that is so abused by Walmart, the next wealthiest corporation in the world from Exxon's recent gleanings.

As for your hundred years of data...... it appears that you skipped the chapters I summarized for you in my last post.

(As an aside....... what exactly is our ailing economy suffering from? LACK OF DEMAND. Predictable lack of demand as FLAT wages being gobble up by energy and H/C are really FALLING wages, and, of course when most of the consumers have no discretionary income it's not hard to predict that the sales of consumer goods too will fall.)

As for: "In fact, any labor surplus supported by wage controls would lessen the ability of workers to bargain for favorable terms or treatment, which illustrates another way the minimum wage hurts the working poor."

.......... Oh? How so? If the "bargaining" which I've reminded you does NOT take place at the lower wage levels is above the miserly $7 no harm is done. Are you in fact arguing in favor of the "bargaining" beginning as $5? or zero?????

"On the $18 an hour minimum wage, I think it's important to recognize that not everyone working a minimum wage job is doing so to support a family."

........ so far I've not come out for an $18 min wage, only that we as a society surely have a problem, in fact 10's of millions of problems when wages for many are but half what it costs to maintain a min standard of living. I thought I covered it well in my last post. As for "not supporting a family" or as I mentioned ONE person, why should any human being work below the costs of maintaining life? If your corpie wanted a delivery van, he'd have to pay the costs of capital and operating costs.......... or settle for a scooter? bus? walking?

As for your "high school kids" most often they can not offer full time commitment and I've little objection to a temporarily lower wage for those of school age or in a TRUE apprentice program.

The foreign labor problem? I picked that up from what I'll refer to for now as the "smartest economist in the room" in a committee hearing a few years back. He's OBVIOUSLY right. In recent years it's been labor intensive handiwork that has been subjected to infinite competition. Next week it will be engineering and techy stuff; as we see, China and India both produce more eng and techies than does the US. Soon? those fat jobs on WS and the wages that many want to protect (while happily beating down UAW and low wages) will go there too. (Unless you see some reason that "traders" and those merging huge international corporations need be on WS with salaries affording the costs of living the high life on Long Island?)

You, as Bernanke, puzzle me with your seeming soft spot for transfer programs. Surely one of the most important tools of capitalism is that of directing scarce resources to the most productive endeavors. Walmart serves as a good and well known example: By combining low wages with federal and state subsidies they are even more able to come in an clobber local merchants.

Walmart to its credit, has developed distribution to a fine art, and has become one of the wealthiest corporations in history, now why should the taxpayer subsidize their labor costs? Surely to those who believe in capitalism this is distorting the market, and in Walmart's case to the disadvantage of local businesses that may pay more, and who keep more of the profits from the locale in that locale. Are we forgetting a few of our principles of economics?

As for "the min wage" or even a wage obtained by collective bargaining "hurting" the recipients, it's simply not the case. While in a static model you can probably gin up a supply demand scenario predicting fewer hires, over time the higher wages makes us a more productive society.

Examples?? At low wages you don't mind paying guys with shovels to dig your ditch, or a carpenter with a handsaw to remodel your home. America is built on combining capital with labor, so we have a well paid guy on a ditching machine or better yet a boring machine, and a carpenter with $10,000 worth of nail guns, power saws, ladders and a truck or van to bring it all to the job.

Well, Thom! I'm looking for areas of agreement! But! I don't think it inconsistent not to favor the stimulus in the first place and also argue against the pay cuts (that US new stockholders may well insist upon!) As near as I can tell, Posner is something of an ivory tower dude and a corporate royalist as well. So far I've yet to see him take the side of the beleagured working blokes, and here he is again, sticking up for the outlandish gleanings of these WS thieves whose pay has quadrupled while that of the median household has remained flat or fallen behind.

It appears to me that "Chicago School" means pandering to the North Shore with little concern for South Chicago and Cabrini Green.

Whoops! something missing! Bernanke favored increasing the EITC over raising min wage. "Creeping socialism?" Will the corpies soon pay only a token wage with a host of transfer programs covering the rest? How will that direct scarce labor and creativity to the most efficient enterprises?

Fantastic article! Thank You very much for the valuable analysis! With the best regards.

Hey, Prof,

I'd prefer it if you would grade some of the responses here.

Just to let them know the meaning of "fail".

EXSPERTER WARNER KREDITNEHMERS

von Raivo Pommer

Vor einer Falle beim Vergleich von Kreditangeboten warnt die ING-DiBa: Unter Umständen droht eine Herabstufung der Bonität durch die Schufa, die Schutzgemeinschaft für allgemeine Kreditsicherung. Das kann zur Folge haben, dass ein Kreditantrag abgelehnt wird oder der Kredit nur zu einem höheren Zinssatz zu erhalten ist.

Keine Gefahr besteht nach den Angaben der Experten, wenn eine Bank Einheitskonditionen für alle Kreditnehmer ausweist und beim Angebotsvergleich keine persönlichen Daten angegeben werden müssen. Aufpassen sollten Verbraucher bei der Jagd nach Kreditschnäppchen hingegen bei Banken, die den Zins von der Bonität des Kunden abhängig machen.

Erkennen lassen sich solche Angebote daran, dass kein fester Zinssatz ausgewiesen wird, sondern mit Begriffen wie beispielsweise "Ratenkredite ab 6,9 Prozent" geworben wird. Um ein konkretes Angebot zu erhalten, müssen Verbraucher bei solchen Geldinstituten ihre Adressdaten sowie weitere Angaben zur Einkommens- und Vermögenslage hinterlassen. Um den bonitätsabhängigen Zins zu ermitteln, fragt dann die Bank auf Basis dieser Daten bei der Schufa an.

Hier entscheidet sich, ob der Interessent daraus Nachteile hat: Wird die Anfrage von der Bank als reine Konditionenanfrage deklariert, hat dies keine Auswirkung auf den so genannten Score-Wert, mit dem die Schufa die Bonität eines Kreditnehmers angibt

Redmund, I'd have to disagree. There could be nothing better for the health of our corporations and our overall financial sector than that several seats on the board of directors be reps of the stockholders, instead of having them all come from interlocking directorates, and as we see, agreeing with each other that millions in salaries, more millions in "performance bonuses" and more millions in golden chutes are their entitlements.

As you surely know the CEO and his cadre of execs run the day to day biz, but the Board really ought to be convinced that a fleet of private jets and outlandish "compensation" packages are good for the future of the company and its stockholders.

Jack: To say the fleets of corporate jets are outlandish is like saying Whopper on the double is unhealthful. They are true, but still, we don’t want to ban them. Just like sometimes people indulge themselves on Whopper on the double, sometimes company executives indulge themselves with private jets. By the way, these jets have legitimate uses, such as to save precious traveling time and for emergency customer service missions. I am not to argue that these private jets are not mostly perks in nature, but corporations have to be allowed to run their business their own way, even if some of their policies are self-destructive.

What! Even self-destructive? Yes. Companies do fail, and they should be allowed to fail if they are so poorly managed that they cannot survive in the competitive market – whether it is because they bought too many private jets, or paid fat exec bonuses, or they paid their unionized workers way above market wages, working or not working. Failure is an essential part of the success of the capitalistic system. As a share holder, you vote or you walk.

The thing we most cherish as a society is not a system of governance where companies will never fail and people have guaranteed income; what we cherish most is freedom. Because we don’t know how to achieve the former, we embrace the latter, even if it does not yield perfect outcome.

Redmund: I live in Alaska where we're very familiar with the use and need for aircraft, and I know well that guys doing certain kinds of high tech or fast moving service can make private jets payoff, as can Presidential candidates. But let's be honest here, how crucial is a fleet of private jets to those doing mergers?? or other deals on Wall Street? But you already agree that they are largely perks and tool for shoring up egos etc.

It's interesting to consider, especially just now, after living through the $100 billion S& L bailout, the "Long term capital" affair, and the current Mess exactly how these public corporations should interface with not only their stockholders but tax payers in general.

You'll perhaps recall that Andrew Jackson didn't want them to be created at all; the idea of a quasi "person" with the rights and limitations of liability didn't set well with him at all.

It's my opinion that corporations have assumed too much power and especially so with venue shopping for beneficial tax havens and even more protection from liability. Though you favor the idea of stockholders few options other than that of dumping their stock in disgust and leaving THEIR share of THEIR publically owned company to this bunch of hail-fellow-well-met cabal of miscreants, I'd argue that groups of interested, long term stockholders would be helpful in both making their company more competitive and keeping it somewhat honest in its dealings.

Today there was a spokesman for one such interested group holding Citi stock. They had pushed Citi to break itself up for quite a few years; as fairly savvy financial guys they could see that the "supermarket" for financial services was dangerous. Please don't ask me why these guys didn't simply bolt, but it does occur to me that if they WERE long term, loyal Citi stockholders, or perhaps former employees holding a lot of Citi with a low basis that the option to run off would be a fairly costly tax event.

You mention the shareholder vote. I think that is the part that has atrophied as large holdings are likely to be held by mutuals, pension plans, and then by stockholders who are too small and scattered to find it worth there while delve into the machinations of these huge combines even had they the expertise. I'll sum up my case with Exhibits A thru Q being what we see........ excess at the top, companies selling off reputations that took a century to build, and raw greed overwhelming any and all elements of prudence.

"Freedom". Ahhh yes that great word with so many meanings from "........ nothing left to lose" on up. But then corporations and companies? I like that word company which evokes images of a bright group of enthusiastic working folk developing a COMPANY, an endeavor larger than any one person could undertake, and for their labors, devotion, and creativity hoping to reap more than they would as a sole proprietors of a one man or family business. But is that what we're seeing today? I recall the big shake out at United where the CEO who's tenure was lackluster at best waddling off with a bundle and being all set for life and beyond, while ticket agents of long STANDING and perhaps flat feet? got two weeks "severance" for their tenure and devotion.

Does this seem like a model for which you'd advise your kids to go to work and trust that they'd get something of a fair shake for their efforts?

I know better than to seek "the perfect" but, today, I think we've a LONG way to go before reaching anything approaching diminishing returns, and that we'd be well advised to give up the chest thumping while chanting "we're the best" in favor of taking stock and glancing in the rearview mirror....... and for all too many their shaving mirror.

"since the value of the stocks owned by these top executives also dropped sharply, and since their bonuses have been sharply reduced or eliminated, most top executives did suffer greatly along with stockholders when their risky decisions failed. So any distortion in the pay structure toward risk taking was surely limited."

Now here is our rational expectations on-the-equilibrium path just-about-perfect information Gary Becker we have come to know!

"since the value of the stocks owned by these top executives also dropped sharply, and since their bonuses have been sharply reduced or eliminated, most top executives did suffer greatly along with stockholders when their risky decisions failed. So any distortion in the pay structure toward risk taking was surely limited."

Now here is the rational-expectations on-the-equilibrium path just-about-perfect information Gary Becker we have come to love!

"since the value of the stocks owned by these top executives also dropped sharply, and since their bonuses have been sharply reduced or eliminated, most top executives did suffer greatly along with stockholders when their risky decisions failed. So any distortion in the pay structure toward risk taking was surely limited."

Now here is the rational-expectations on-the-equilibrium path just-about-perfect information Gary Becker we have come to love!

This article is both condescending and clueless. Condescending because it assumes taxpayers are so dumb that we think that lower exec salaries would have a significant impact on profits. We don't. Clueless because it misses the point of public anger--it's not the salaries per se--it's the outrageous bonuses and severances packages that execs receive while driving companies into the toilet.

For 99% of the workforce, bonuses, raises and severance packages are arbitrary and at the complete mercy of corporate hogs who will sit there with a $5 million bonus check in their pocket while telling employees revenues are down and the best the company can do for staff is an insulting 3% raise that amounts to maybe $1000 if they're lucky, or they will pull one of their willy-nilly reorgs recommended by some other corporate bozo, toss qualified workers out the door with two weeks pay and then waltz out the door with multi-million severances for themselves after they've destroyed a business.

Want to know why taxpayers are angry? Get a clue.

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since the value of the stocks owned by these top executives also dropped sharply, and since their bonuses have been sharply reduced or eliminated, most top executives did suffer greatly along with stockholders when their risky decisions failed. So any distortion in the pay structure toward risk taking was surely limited.

Cry me a river. These guys helped bring down the economy. They made millions - tens of millions - for years, all the while not having any idea what they were really doing. And whilethat was going on all the free-market types were busy explaining why it was all justified and perfect and so on.

Give it a rest.

Can't live on $500K? Too bad.

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Guess what: Pay controls don't work.

"Lloyds and RBS to offer loans as staff bonuses", FT, April 16 2009.

http://www.ft.com/cms/s/0/7b932404-2ab4-11de-8415-00144feabdc0.html

Guess what: Pay controls don't work.

"Lloyds and RBS to offer loans as staff bonuses", FT, April 16 2009.

http://www.ft.com/cms/s/0/7b932404-2ab4-11de-8415-00144feabdc0.html

thanks!! Old [url=http://www.printings-china.com]china printing[/url] has a very long history.

thanks!!
Ancient China printing was invented hundreds years ago.

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Working on the scaffolding and say hello to everybody here!!!

Definitely agree with the idea that free market, aka open competition is the best way to go. But that's only assuming the government knows what's going on behind all the curtains. Otherwise, it's not actually free market.

And as to this matter the situation in Turkey?

Do not worry, in Antalya, all excellent!

Taxing the rich or big companies often doesn't work either as many find ways to evade taxes. According to Becker this should be an argument to abolish taxes for anyone but the poor.