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How I’d Fix the Economy

March 10, 2013

First, I’m a happy Capitalist.  Unfortunately, America doesn’t operate under Capitalism anymore, but Corporatism.  Between special interests and corporate lobbying, the greedy legislators are fed by greedy corporations.  I also think Wall Street causes greed and shifts the focus of publicly-owned corporations from customer and employee to profit and shareholder.

So, my solution (which **shudder** echos an Obama idea) is to limit the salaries of publicly-held company’s executives to a maximum of $500,000 a year.  If you OWN your own company, make as much as you want, but if your company is listed on the stock exchange, you get a limited income that is still pretty sweet.

What this will do is derail corporatism.  Big-shot CEOs will start their own companies and without the cash infusion of an IPO will have to stick to moderate growth.  Imagine a huge technology company.  To make more money, they’d have to break up into privately-owned, smaller companies.

This would definitely slow down our technological progress, OR it will diversify it.  Further, executives would gain experience in corporations, hit their ceiling and open their own business.  As we live longer, getting greater job churn is important (the more old-yet-robust people who stay in their job for decades don’t make room for younger workers).  

I could be wrong, but when Obama suggested this, it was for all companies (but I could be wrong, maybe it was only public companies).  Owners should not be capped (because Owners are Capitalists), while Corporate CEOs can be capped because, hey, the public owns the company.

Your thoughts? 

2 Comments leave one →
  1. March 11, 2013 7:23 am

    It’s been a while since you made a political-type post, and I am glad you’ve returned with one on which I can report strong agreement. Personally, I don’t think there’s any reason at all why a CEO should make hundreds of times more in salary than the average employee of his/her company, but I can get behind your logic that owners should be treated differently than the executives of publicly-traded companies.

    The co-founder and former CEO of Costco has been in the news lately as, I think, a fantastic example of how things SHOULD work. He always kept his own salary relatively low (but did just fine nonetheless) and insisted on paying every employee of his company a living wage, plus benefits. It hasn’t hurt their growth, it hasn’t hurt their profitability, and they have satisfied employees who, one presumes, don’t unduly add to the burden on the social welfare system (unlike the employees of Walmart, whose founding family has more wealth than the bottom 40% of the country).

    I heard it said recently that no one EARNS $100 million for a year’s work; anyone who gets that much is stealing most of it, in one way or another. I don’t know whether I agree entirely, but I think there is at least a grain of truth to it, and I certainly think there is such a thing as too much wealth. I don’t at all begrudge the rich their money or their lifestyle, but I also wouldn’t feel too bad if they have to downsize to a 15-room mansion with 6-car garage, or get the 50′ cabin cruiser instead of the 60′, or cut the personal air force back to just two Learjets and a Bonanza. In a nutshell, I want a country where anyone and everyone who works full-time can at least make ends meet without government support, with guaranteed health care, guaranteed (and world-class) education for their kids, and a strong social safety net for when life hands them lemons. We can and should debate which of those necessities ought to be provided by the government, of course. But presently as a nation we’re doing a pretty shoddy job on all those fronts, and one way or another it needs to change before we become merely another chapter in the ongoing book of failed empires.

    P.S. I’ve often remarked that we should break the link between employment and healthcare in this country, preferably with a single-payer (yes, SOCIALIZED) system. I’ve known plenty of older folks who were financially set for retirement but remained in their job for the health insurance–remove that link and I’d wager we’d free up a LOT of new jobs for younger folks, both by attrition and promotion.

  2. March 11, 2013 8:07 pm

    Believe it or not, I’d be okay with LIMITED socialized health care with extra out-of-pocket insurance policies for extraordinary care… but therein is the rub. A poor kid gets a rare cancer and dies due to lack of extraordinary care while a rich one lives. That wouldn’t stand for very long.

    Still, if we broke up the corporatism into smaller, more innovative privately-owned companies, I suspect the wealth distribution would even out, growing the middle-class and shrinking to lower class (especially if we limit welfare to just food and cheap rent). I do want to see some skin in the game for insurance, though, even if it’s for extra care, just to relieve the burden on health systems (if it costs me $20 to go to the doctor, I’ll go when I really need to; if it’s free, I’d go whenever… but actually wouldn’t because the wait would be too long).

    I’m also ticked at companies that expect their employees to work 60+ hours a week (and at the employees who blightly do so… I was speaking with a co-worker who did her 8 hours at work and put in 4 more at home every night, because “it’s the only way I’ll get all my work done.” To which I pointed out that she was doing the work of two employees and wouldn’t it be nice to hire another person needing a job rather than you working for free?). I get that it’s our culture that says 40 hours is the norm and that other countries thing 120 hours is the norm, but we are here and our culture does say 40 hours. Companies trying to cut labor by increasing unpaid hours of existing employees bites.

    To your point, the bank I once worked for paid its CEO $10M+ a year. I knew he was better educated than I was, had a more critical skill set, but not so much as the pay difference suggested…

    I am frustrated with both political parties, to the extent I believe every one of them is corrupt (either knowingly and cashing in, or just following business-as-usual without seeing an extra dime).

    The sequester cuts are ridiculous. I paid a lot more than 2.5 percent growth in income tax off fewer dollars. You can’t tell me there isn’t at least 30% frivolous spending in our government that can’t be rooted out. Until government is vastly streamlined, I won’t have any respect for politicians.

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