I think it depends on how it's done. Tax rebates and cuts which were a huge part of the stimulus plan didn't work. People were scared, people were in debt. That money got put under a mattress (I believe the numbers showed only 10-20% of the rebates were spent).

The problem is jobs, not a $500 rebate check or 2% savings on your taxes. Not an extra couple months on your unemployment. It's having a 9-5 where you know you'll have a check coming every 2 weeks. The stimulus didn't really address this. It sort of tried to stick a finger into a leaking dam.

The money should have gone to two things. The first, massive infrastructure projects. I'm talking things that can really improve the efficiency of our country long term. Whether that's new roads, train systems, airports, dams, bridges, etc. I keep hearing about how all these things are crumbling and this would be a great time to fix it. Considering the largest group of unemployed are those without college degrees, it would produce a lot of construction jobs (which is an industry killed by the housing collapse). Now these jobs would be given out at the best rate but only to companies that hire American workers. Now what is the worst that can happen here? You're borrowing at a negative yield. At worst you end up with a bunch of nice shit you built that can last you 50-100 years. That stuff needs to be done someday.

The second is a credit to companies who hire. We try all these little incentives hoping it'll end up with companies hiring more people. Lets just cut to the chase. You get $X for every full-time American employee you hire for a year. I don't know what that amount is, and sure it might be overpaying, but if it gets companies hiring, gets people back to work and getting a paycheck, then thats great. With how inefficient we are at creating jobs, I think this would be a much more efficient way of doing it.

Enough with the "if we cut their tax rate, maybe they'll hire". How about "here is some cold hard cash if you hire". At least I know that money is going toward new employees and not to lining an execs pocket.

You may be right, but it is far from "proven"

i do not think US, Japan or Europe has come even close to New Deal spending. which again, was tiny to the spending scale of ww2.

The problem is ending it and not creating a dependency on it. which may be the thing that's impossible in this day and age.

Well, Japan tried massive infrastructure projects and all it got them was a deficit of 180 percent of GDP and no recovery.


How many times does stimulus have to fail before we decide maybe it's time to try something different?

Edit: Something different could even be Keynesian economics where spending is cut in boom times to save money for stimulus during recessions. Right now what we're doing is running a big deficit in boom times and a huge deficit in recessions. When does all this debt ever get paid off?

Japan was a much different situation though. And some economists believe that their massive stimulus plans helped avoid a catastrophic depression. It's tough to look at how stimulus plans work with a mindset of either it producing growth or not. Sometimes they just help slow the bleeding.

I guess what I'm saying is where would Japan be if it didn't provide any stimulus. I'm pretty sure their bubble was much larger than ours.

In looking at more of Romney's plan, it's even more of a shit sandwich. Not only will the corporate rate be dropped, but the estate tax will be eliminated and interest/cap gains/dividends taxes will be reduced greatly. How will this impact the deficit you may ask? Romney has an answer. The economy will be so great we'll never notice the lower rates.

Where does Romney plan to make up for the massive revenue decrease we'll see? The GOP cares about the debt, right? Or is that only when a Democrat is in office?

There's certainly that possibility. It just seems to always be the case that every time stimulus fails to have a positive effect on an economy somewhere, there's some excuse. Maybe the reason that it keeps failing is that it's misguided in the first place.

Judging from the effect having our debt downgraded had on the markets, getting our fiscal house in order might be a better way to go (and I think that would have to include tax increases too).

You can't simplify Japan to stimulus or no stimulus. There were currency valuation issues and deflation. I've also read criticism that Japan's spending was done too slowly rather than as a massive shock to right the economy.

That is what both saddened and outraged me about the Stimulus. It was obvious (even to me, just some jerk on a message board) that it wouldn't solve any problems created by a massive fiscal crisis. It was pet projects which yield no ROI, tax cuts for people not inclined to spend the savings, and unemployment for people who should be working.

And you're right about the sector that needs the work...its the non-college workers who mainly make up the construction sector that need to get a consistent paycheck again. We talk about investors in the stock market having "confidence" but we never really talk about the construction sector having "confidence" in their paycheck because nobody has confidence when they are collecting unemployment (or not collecting a check of any sort). This is the sort of out of touch crap that infuriates me with the Dems...which is supposed to be the party of the common man.


I don't know about the credit to hire. I know you aren't publishing a finalized bill proposal here, but any incentive has to be tied to a net increase of employees...otherwise I can lay off an entire business unit and hire a new one and collect revenue that way. I kind of see that as throwing in the towel and begging for rich people to hire somebody...I think we can come up with better incentives that spur investment, which in turn spurs hiring.

I'm not really against the lowering of the corp tax rate to 25% itself. So long as when doing it we start closing all the loopholes in the process. I'd much rather have GE pay 25% of their profit than to have Joe's sandwich shop pay 35%...both from a practical standpoint and as a matter of general principle.

Corporate tax loopholes aren't going anywhere. The people who fund the politicians want every loophole they can get. The overall rate can go down just in case there aren't enough loopholes, but simplifying the corporate tax structure will never get past our corporate overlords.

Here is the problem. Google made $6.4 billion in profit in 2009. They paid 2.4% of that in taxes. Microsoft made 17.4 billion last year and only $445 million went to pay U.S. taxes.

Does this really effect many companies? These companies and more already have super low tax rates and it hasn't resulted in a ton of new jobs. Anytime we do cut breaks it just ends up going to bonuses it seems (see Cisco and the tax holiday). And while you can say that the execs would have to pay taxes on that, we're pushing to lower capital gains even more so they barely pay any of that.

I guess one of the problems I see is that you need a strong middle class to have a strong economy. And we keep pushing for this enormous inbalance. When a handful of people control all the money, you can't expect there to be high demand from everyone else.

The flip side of that is that if you raise the taxes, the businesses take their jobs to other countries. That's the problem we face now. At one point, business wouldn't have an option. The way business is conducted has changed so much that the country needs the business MUCH more than the business needs the country.

First positive I've heard associated with Romney in ages.

The estate tax might be one of the worst abominations ever undertaken by the federal government & one that there's no reasonable justification for (unless you consider jealousy a justification).

Would have to be a hell of an "X" since a significant part of the problem is that many unfilled (or uncreated) jobs are a matter of simple math: Cost of employee > benefit of employee. At this point I'd have to think you're talking about subsidizing virtually entire salaries.

Well that and forcing capitol to move to keep capital from massing in a limited number of families solely due to the luck of birth.

How do you explain companies in Germany and Scandinavia?

+1.

Right. So getting them to pay 25% with no loopholes is really where we need to be so that the actual small businesses who do struggle with 35% rates can expand.

I see the loopholes as the part that Dems should be fighting to close vehemently. I see the corp tax rate as what the Repubs should be fighting to get to vehemently. If both can frame their arguments well, then there should be wide consensus to do both (and gulp...compromise).

That said...JP is probably right about the final result. I guess we're just screwed.

Small businesses are likely not paying the 35%. Most are setup as LLC or S-Corps and passing costs through.

No, but if you actually eliminated most ways to avoid your corp costs, you'd impact these small businesses as well as the mega companies.

We need the mega companies to actually pay their share, rather than discourage small companies from trying new things. I don't want to rail on the big companies too much, as they facilitate a lot of economic activity and are the genesis of a lot of tax revenues (even if they aren't directly paying it), but whats good for GE or Google is good for Joe's sandwich shop.

Don't confuse headquarters with subsidiaries and where they're incorporated.



Sydney Morning Herald says Obama will push for another $300B plan:

http://www.smh.com.au/business/world...#ixzz1XM2q4vCy

There's plenty of manufacturing in Germany and Scandinavia and the compensation rates are generally higher than in the US. There's also the fact that a lot of the jobs that have been lost aren't outsourcable. You can't outsource home construction or service jobs.

I don't buy the idea that the only hope for the US economy is to embrace a lower standard of living for a large portion of the population.

I don't know what that number is. I'd imagine it's something that would have to be crunched by experts. But I do think there is a number that would encourage people to start hiring. If you're a software developer and you're able to get $15,000 back on hiring a $50,000 programmer, does that help you pull the trigger on the hire? Does a restaurant hire another server for their busier hours if they can get them cheaper? There would have to be a sweet spot where the credit is worthit.

When I look at what we're doing, it just seems woefully inefficient. Extending unemployment and giving these small rebates and cuts to our taxes is not doing anything. I'd rather that money go toward the actual hiring of employees. The government has been rather inefficient at creating jobs on their own money wise, so wouldn't it be better to just put an amount on a job and pay it directly to the employer? I saw a report this morning that a "weatherizing home" program in California was costing $175k per job created. Wouldn't we be better off just giving a company $25k for hiring someone?

This is also something that is done in other areas. Many states have programs in place that will give companies a large tax credit for hiring former convicts. This works too in many cases. I don't know why we couldn't do it to an extent elsewhere.

I own my own company and I can tell you that at a certain amount, I would definitely hire someone. It simply becomes too much of a value.

In both cases it seems to come back to what I was trying to say: the sweet spot is wherever you make more than New Employee X costs you.

I just don't get a sense that the difference is something marginal, or even close to marginal. The problem in most industries doesn't seem to be one of "oh if only a new person were 20% cheaper then we could do this", it's more like "why the hell would I hire someone when we're barely keeping the people we have busy". You don't need to make more widgets if nobody is buying widgets, and it's a hard sell to the person asked to take the risk to convince them that it'll all come around eventually if they'll just bite the $X bullet for a while.

Increased demand solves a lot of problems, although I don't believe that a magic wand to restore all demand at a given point (whatever the low for unemployment was in the last 5 or 10 years) would bring the same jobs back. There'll be no shortage of employers who've realized that a lot of their cutbacks eliminated inefficiencies as much as anything & will be more prepared to do more with less (than before) even if demand improves.

In short, our problem really doesn't seem to be entirely one of too few jobs, it's also too damned many people (and FTR, I'm not at all referring to anything political like legals/illegals, it's far more basic than that) for the work that is profitable to do.


That's a different question than the point I was getting at. I don't necessarily disagree with your basic point about that being a "better" option, I'd still be concerned with whether it's actually a "good" option, both practically and philosophically.

I think a lower unemployment rate fixes a lot of the demand problems. Sort of a domino effect. More people getting a weekly paycheck and the more comfortable they are going to be buying a TV, fixing their roof, or buying a new car.

You're right that it wouldn't work in a lot of areas. If you own a maid service, hiring extra maids when there aren't any jobs to send them out to is pointless. However, I think it would work well in growth areas such as R&D. Software development, pharmaceuticals, and a bunch of others would seemingly benefit from that. One of the bonuses of that would be that you're investing in growth from new technologies. So perhaps some of that snowballs into more jobs down the road.

One of the catches I referred to, at this point a surviving business owner is likely to say "you go first". Taking the risk once there's real signs of recovery is one thing, putting your neck closer to the chopping block to be the next business to go under is something else entirely.

Honestly, I don't see any way for any real recovery to even have a chance (*I don't believe one is coming regardless frankly) to happen until after the election one way or the other. Too much uncertainty does not an atmosphere for risk taking make.

Ultimately, this is what drives me nuts about our economy. How does one fix the lack of jobs problem, particularly in a consumer-based economy. It's like our solution is "Hey, I feel safe about having a job so time to go throw out my old stuff and get new stuff". There's no "let's make capital goods so we can make more goods" or anything more long lasting- it's just a perpetual cycle of "lets burn through as many resources as possible with no societal value".

SI

I believe what we're discovering is that, ultimately, you don't.


Not sure I'm following you here. Wouldn't that logically take place before the unemployment (and ensuing lack of demand) rather than during? For that matter, to some extent we've used capital goods (at least as I understand the phrase) to eliminate jobs, been doing that roughly since the industrial revolution started.

Seems to me that "means of production" upgrades often fall more in line with making the same (or more) with less people, not necessarily making better products. Today's example would be the 12,000 postal workers facing layoffs, in no small part because of technology (which seems to function as like a capital good, not sure whether it qualifies by definition though) that has made much of the mail once delivered obsolete.

I'm sure you've got a valid complaint/concern in there somewhere, I just don't think I'm following what you were driving at exactly.

I agree totally with you.

Now, if you'll excuse me while I finish putting flowers in my hair and going full on hippy ....

The reality of the changes of technology and globalisation of industries is that there simply aren't enough jobs to go around - nor should there be at this period in history really.

Two things are far out-dated imho and need to evolve and change in some manner so that society can move on and improve:

* Money
Money was created purely to allow people to barter and exchange goods efficiently; as such it was a means to an end to improve the lot of people within society.
It is no longer doing that - instead its congealing around a small section of society and being hoarded by them and largely denied to the less well off sections of society (ie. not providing them with what I personally would consider an adequate standard of living - not just in terms of food; heating ... but education etc.).

* Capitalism
This was used to encourage people to improve society and push technology forward etc. - unfortunately corporations are now at the size and influence where instead of this they are impeding social improvements (ie. avoiding paying tax on their profits, pay low wages, poor holiday entitlement etc.) and actively preventing technological improvements in order to maximise profits (ie. Oil companies etc).

What the solutions for these situations are - I don't know at present to be honest I don't think change is coming for quite a while yet, perhaps in my kids generation ..... but I can see the warning signs, people are being discriminated against and marginalized out of society because they're unemployed for (in many cases) no fault of their own.

At present because the unemployed are still a largely disorganized minority - this discrimination is tolerated within society, however this might change once they are the majority (not infeasible in 20 years time imho) ....

btw in case you wondered these comments are aimed at the 'world' at large and not any particular country.

I'd argue that what's become most outdated due to the changes you mention would be unrestricted birth rates and insufficient limits on immigration.

In case anyone isn't clear, yes I basically just said I think the Chinese have a pretty good idea on the whole baby limit thing.

As horribly eugenic as it is on the unrestricted birth rates (and as dirty as these words always make me feel): I'm with you JiMGA. It's only a matter of time before birthing is opt in and not opt out. It's never made any sense that it's much easier to give birth than to adopt, for instance. We have no problem letting whoever, from 13 year olds to 35 year olds on crack, have kids but if you want to adopt one that has been given up- it's a giant fight.

I'm pretty sure that sort of change happens in the next 50 years unless something else we do drastically balances out the population equation (war, plague, etc)

I don't know much about their immigration at all. I'm also kindof always befuddled by the last couple of page's emphasis on citizenship as a birthright to something. I've never quite understood why where someone was born guarantees them any sort of automatic rights (as an aside- it's why I've never understood the whole emotion attached to the "anchor baby" thing)

SI

I was at a wedding the other weekend where 2 of my wife's cousins could have starred in a show called 11 kids, no job. I don't get how the gov't allows people to keep getting pregnant. You'd think some sort of tipping point would occur when you hit your 3rd birth under 20, or your 4th kid in 6 years with no job. It's alarming. Cutting the food stamps off and shit is just going to harm those alive, but we can damn well shut down the birthing ovens on these women.

ie- One of the girls is under 30, unmarried, has 5 kids with a 6th in her uterus. No GED, No job. This is 2011, it shouldn't be possible for this to happen.

I don't believe in caps. There are some people who should have a lot of kids. They can afford them and will raise them to be productive members of society.

The problem I see is we have sort of made it taboo to tell someone they shouldn't have kids. If you're a single woman on minimum wage, you should not be procreating at this stage in life. But if someone came out and said that, they'd be hammered for saying it.

Until the public perception changes from "everyone should experience the joys of parenting" to "have kids if you will raise them well", I don't think we'll see any progress.

Hey, if the government is willing to pay for my Vasectomy to help limit population growth, I'm all for it!

We reward people for having children through tax credits.

What won't this guy do? I think I've counted 200 million new jobs in the first five minutes of the speech! Everyone gets a job!

Oprah's hiring us!

Your stats and summations are always something to take to the bank.

It would only take two words for Obummer to help the economy: "I quit"

I wish I could make false promises and get applause like he does. That would be fantastic. My favorite part was where he talked about getting American cars in foreign countries. Only way he's doing that is to toss unions wages out of American car production so they can offer competitive prices. That ain't happening.

My vasectomy cost $5. I would want the government to give more then that. ;)

So, after all the big fight over budget reform and the Dems refusing to budge on needing tax increases until the very last second, Obama can't talk about additional tax cuts enough?

cuz he knows he has to throw red meat to the Republican jackals in congress to get anything done.

Do you seriously believe that GWB or McCain would have fared better the last 3 years? I love how it's so easy to speculate how different things could have been if so and so was in charge. At the same time vilifying the people in control as a method to debase support, which ensures that nothing ever gets done.

Yes and so would other Democrats like Hillary who would have brought more experience. Obama is in over his head, I don't think that one is debated on either side of the aisle. There's no doubt he's intelligent, has ideas, is a hard worker, is a great speaker but he has done nothing to show that he is a leader.

Hillary would have been trampled. She was already carrying way too much baggage. You can lay the problems right at the feet of Pelosi and Reid for completely fucking things up when they should have been smart and accomplished something instead of acting like the little kid who just got the ball from the bully.

I'll give you Reid, but Pelosi was very effective at getting the House to pass bills.

Pelosi was very good about saying "Na-na-na-na-na-na, you have to listen to us now, because we say so," and proceeded to, IMO, undermine everything that Obama had been campaigning on.

I agree with the experience and leadership angle. I don't know if he's in over his head or just trying to get votes instead of doing what's right to fix the country.

Obama has been farther to the right than Bush or McCain though. So if you're pushing the "small government fixes our problems" mantra, I don't know why you'd take Bush or McCain over him.

I just don't see that. Everything went to die in the Senate because of unified GOP opposition and a handful of moderate Dems. If the Senate hadn't operated on a super majority requirement for every bill a truckload of bills would have become law. I don't think there's anything that Pelosi could have done to change that dynamic.

I was just saying they would have been better leaders than Obama. I guess I would think that I personally would have 100% of the positions I would want in a president but will concede Obama is a better leader than I would be so I don't know why it is hard to understand why I would think Bush and McCain and Hillary would be better leaders than Obama. None of the four would be near the top of my list by the way. :)

Didn't say that.

I said the most helpful thing for the economy the Obummer could have said last night was "I quit". Ridding the nation of the albatross he represents would do more for consumer confidence than any speech the worthless SOB could give.

That's different than the question you asked me.

You have a lot of faith in Joe Bidden.

Sad but true

At the end of the day, this is how I would be as President (I'm not saying I would be Obama, but similar personality types without the great speaking ability). I'd first try to appeal to the public and opponents with logic (the bully pulpit thing he does so well), have no problems compromising to get everyone on the same page but the moments one of the sides said "Nope, now we want more", I'd be pissed and be groping around in the dark just as he is.

SI

Actually Biden troubles me far more than Obama.

He might actually be capable of getting more of the batshit crazy stuff passed.

I've always wondered how this felt at the time as opposed to after the fact. I have this impression that Kennedy might have been much the same as Obama- stumbling and groping around and just, frankly, too young and inexperienced for the job. However, he could do a great speech and had some progressive ideas. The greatest thing he did to advance his legacy as President was, frankly, to die and have a veteran legislator ram through a bunch of things after his death.

I honestly wonder if the same scenario wouldn't play out now if Obama were assassinated.

SI

+1 This is the genesis of the (public) aggravation factor with Democrats imo as well.

They managed to pass the Stimulus and Health Care bills no problem...what they didnt even consider was that putting people to work en mass so that they could more easily justify a single payer system 2-3 years down the road. But you have to fix the crux of the problem before your pet projects & silly giveaways that don't amount to much. I think the general public saw this as the legislation the Dems pushed through, and punished them for it at the ballot box.

Watch what happens with Obama's jobs bill proposal. If the Repubs sit on their hands here, they too will be voted out to the extent possible.

That's interesting... and not that wrong, IMO.

I get the impression that Obama is the rookie QB with a ton of potential that was drafted by a bad team and was thrown to the wolves. He's David Carr. Had he taken the Aaron Rodgers route of sitting on the bench for a few years (a few terms as Senator), maybe he would have built up influence and sway over Congress before taking the Presidency. When he was elected, it seemed to me like Pelosi and Reid thought they had just been elected President and that they were going to control the direction the government went in.

The Democrats needed a win so they put in the guy they thought had the best chance to win, but for Obama, he really needed a few more terms as Senator, maybe even left the Senate and was Governor of a state for a term or two, before being President. I know the Republicans are stomping their feet, folding their arms and letting the crocodile tears flow until they get their way, but at the same time, Obama seems like he just doesn't know how to get things done.

I don't think they managed to passed the Health Care bill no problem. It took them over a year of negotiating, removing things, and they had to get 60 votes just to get it to the floor for a vote. In fact, I think nearly every appointment or bill has needed 60 votes just to get considered.

Obama has been pushed as a presidential candidate since 2000 or so. He's not a noob here.

Well, I think the perception is that "it got done". Meanwhile, policy which focused on jobs "did not get done" nor did it actually get the full focus that Health Care did.

People are (and were) trying to avoid losing the ability to pay for food & shelter...they'll worry about how they will buy healthcare after they secure the first part. This is the fundamental disconnect I think people feel with all of government, and the Dems under Pelosi/Reid did nothing to change that perception. So its little wonder why they were voted out (imo).

No way. 2004. He wasn't even in the U.S. Senate in 2000. By contrast, Romney has been running for eight years. He's young to the political game by any standard. Doesn't make the criticisms invalid, just trying to clear up the facts here.

I meant what I said. I was working with people around 2000 who were mentioning him as a future president, even as he ended up losing the House election that year. Much like Republicans this year, they were Democrats who hated having to put Gore forth, and were discussing alternatives. Obama wasn't an alternative then, but they saw him as a future candidate with seasoning. Yes, his big speech at the 2004 convention really put him on the map, but he was considered an up-and-comer 4 years earlier.

Barry never would've been elected as an elder statesman. To take your analogy and flip it a bit, he was a stud freshman in college that came to college with a ton of hype. After his 1st year, EVERYONE said he was a lottery pick and after some "pondering" and "speaking with trusted advisers" they realized that he'd never get a bigger payday than he did. So he HAD to declare early for the draft.

Now he's a starter on a veteran team and is expected to lead. But his blockers are aging, his wideouts can't score like they used to and his coaching staff don't really know how to manage him because they're just as new to the pro game as he is.

The shit he ran in college doesn't work in the bigs and so, we're 3 seasons in and everyone is angling to release or trade the guy. There's no franchise QB in the draft and all of the free agents out there come with their own flaws too. Still, it doesn't mean the kid was the right one out of the chute...it was just a timing thing and you had to take him 1.1 when he came out of the draft, there was just too much momentum around him.

He was half-black and articulate and had a great story and wrote a book. They were touting him as a future President in law school too. But the reality and the hyperbole are two completely different things. He wasn't seriously on the public's Presidential radar until 2004 and even then, he was no slam dunk in 2008. A lot conspired to put him forward and a lot of it came from a masterful campaign. He might suck as a President, but boy, he can work the stump like a champ.

But I get your sentiment. So I'll stop now. ;)

You generally can't get elected as president if you've been in a legislature too long. All those votes inevitably include a lot of material for attack ads. If you're in Congress and you want to run you need to do it ASAP. I think that's why Ryan should run now if he has any ambition.

I think Obama is too much of an idealist and not a realistic. He also doesn't seem to grasp how the business world works.

Japan is a good case to study, you can talk about the quality of stimulus there, you can also talk about the failure of bank bailouts. A lot of the crap that happened here had a lot of parallels to bad policy decisions in Japan to save 'Big Money'. For my part the crazy policy not involved around the stimulus was the killer in Japan (they would not let their megacorps fail, or force them to improve)... the stimulus does not even represent a majority of any debt projection. Its like blaming 100% of the problem on 10% of the scenario.

Not that I'm endorsing their particular spending stimulus... just want to have people look at it with a little more perspective. Read any line of discussion you want on Japan stagflation.. conservative, liberal, whatever, and you will find plenty of ammo fired at non-stimulus spending issues (particularly before stimulus spending became a big American buzzword and political dogfight).

This is true, technology can kill jobs as much as create them (overall there should be either a net improvement in resource utilization or standard of living as a result from the increased productivity). One of the problems in the modern economy is more of those cost savings are being thrown into executive compensation than growing the company, or workers, so a few hard working technologists are destroying jobs by the gross because the top class has no real incentive to grow when they are already flush with cash.

I still think overall there is more jobs that need doing and need for technology than there are people employed. If it really is true that we can do more for less, than we should emphasize doing it better and more for less as well. This means a green agenda to cut down on pollution, because if production is unnecessary and jobs are certainly not coming, then we might as well get efficiency so one aspect of the triangle is healthy.

If we had a country with solid infrastructure, inflation under control, and little health depleting externalities around us maybe I'd go more extreme than Jon and argue for euthanizing all the losers because we just don't need them and we want to keep a good ratio of quality to resources. Until then though I'm going to lean towards there is work to be done and we should be finding ways to encourage it.

Besides, population growth trends are slowing world wide in developed countries and even in some undeveloped near-slave states. In the long run the good infrastructure we build now may need to supply a lot smaller growth rate (perhaps even negative), so the cheap labor supply might be something to take advantage of while we have it in the next hundred years. Only scenarios I see beyond that are either utopian or post-apocalyptic (either we solve efficient resource utilization and stabilize standard of living, we start shooting everyone around us to horde cheezos, or technology and standard of living still manage to outpace population growth which I don't think will happen even with declining geometric expansion).

I support his attempt to stimulate jobs in the country.

We need to reward companies for hiring American workers but I would also like to add a penalty to companies that outsource. Get the f****** country working again and back its feet. Reign in CEO salaries that have ballooned to obscene levels while the average workers continue to get hosed.

Goodness knows we can't have relative value playing a role in compensation :rolls eyes:

There's nothing relative between the value of a CEO and the obscene amounts they get paid.

About as close as the value:compensation of the aforementioned "average worker".

Relative value of what? Sitting on their hands? I'm all for good CEOs getting whatever pay they want, but any statistical analysis you do linking CEO pay to company results is laughable.

The disconnect between executive pay and results is farthest than it has ever been, whether it is giant companies or government 'talent', the leadership has been less than shit lately and for a long time before that.

I'm surprised shareholders don't regularly go around half of these places with giant machine guns (of course there are no shareholders these days, only spot price speculators like me and machine ran mutual funds, so I guess there is no one to make a fuss).

Of finding a good one ... which is what every company thinks they have when they hire them. Or at least hopes they have. A good one is worth what they can get, problem is that the batting average of picking good ones sucks.

Meanwhile the average American worker can be replaced by a trained chimp ... and increasingly often seems to be.

Companies are "global" who can relocate and set up wholly-owned subsidiaries at any time, any place. How exactly would you punish them?

We need to fix our trade agreements.

agreed. the actual value of a CEO is horridly overrated. Kinda like a closer in baseball.

Total brainwash here. They are important because they told you they were. The total number of top CEO's is a very small group. Are we believe that they are a small handful of super-geniuses, like they tell us? C'mon, there are literally thousands of people who could do the job effectively. It's not skill, it's all about power, and power consolidation.

Well as far as chimps go, the median is ($31K) the mean ($41K). Those chimp trainers really need to get off their asses. Although I think the cost of your average chimp up front is in the 30K-40K range... maybe the median worker in the USA actually is a trained chimp! The figures are suspiciously close...

As for CEOs probably the average one is worth something, but when they fail they do so at an epic level. The problem is those epic failures have little correlation with salary, and even in some cases overly high salaries link more to failing CEOs than successful ones. (over time... this comes from the agent theory line of thinking where more compensation is either the cause of or a symptom of a CEO in the process of looting a company for 'rents')

A great CEO is worth a billion, and usually if they are that great they can EARN it, not demand it in a golden parachute contract. Most such CEOs don't tend to get shopped around to begin with because they are builders and they stay with companies they found or are heavilly invested in. So the pool of overpaid ninnies is probably quite large, and of course it is because the ones hiring are often ninnies!

Sounds like the alleged value of the "average worker".


Yep, and everybody would like to find one of those.


As if that isn't a skill? Beyond that, the biggest skill that seems to be in short supply is the ability not to fuck up ... that seems to be a rare commodity indeed.

Dola, all of this nitpicking from me is because I'm a stats junkie. Instead of fantasy football I play fantasy businessman... if I don't see positive relationships in the numbers I get jaded, and lately all that red ink out there, and worst the black ink but bad fundamentals the last two years, has me really pissy these days. I really think about half the companies out there should be bought out and broken up for asset value rather than let these asses keep pissing away useful cash, where is Gordon fuckin Gecko when you need him! If only I had billions to play with the fun I could have!

You believe that? CEO's fuck up all the time. Except that all their bonuses are paid upfront and their severance packages are guaranteed. They just go to another company, who doesn't give two shits what they just did, leaving a trail of shit in their paths, that the "average worker" ends up cleaning up.

I thought most CEOs earn the bulk of their compensation through stock options, not upfront bonuses?

I guess not just anybody should be doing that job then.

While we are at it, basketball players and racecar drivers shouldn't make $10M a year either.

Read what I said again, finding one that doesn't is the hard thing. The pay is because you believe/hope that you've found one that won't.

(Hence my comment about the ability to not fuck up being "a rare commodity indeed")

That is true. Puts them in a lower tax bracket and easier to get by a board of directors. It does lead to many running the company for the short term though, and causes huge risks. Just look at pretty much every major financial institution that would have gone under had they not been bailed out. You're talking about businesses that have been run for over 100 years that were destroyed in no time. Just to get a quick up in their stock. No one is in it for the long term and we've seen the results. So many companies have been destroyed over the years.

I do think most are heavily overpaid, but some aren't. What's the value of Steve Jobs? Could Apple pay him an amount over the years that would be equal to his value? Then you have Sam Fuld who basically lost his company hundreds of billions and made $22 million to do it.

The whole CEO compensation process is a scam. First the CEOs hire compensation consultants that shockingly say the guy that hired them should be paid a lot of money. Then the board, full of people that need favors from the CEO, decides the CEO really does deserve the crazy compensation suggested by the consultants. The next CEO hires the same consultants who now say that this guy deserves 10% more than the last guy since he's obviously better. The board doesn't want to lose a guy that's better than the competition's guy, so they agree.

Rinse and repeat.

Personal knowledge?

I can't speak for JPhillips, but I'm no CEO or compensation consultant. However, I do remember a congressional hearing a while back and dug up the link:

House Panel Finds Conflicts in Executive Pay Consulting - New York Times

From the article: "The committee report stated that the study’s findings were not proof of a causal relationship between higher executive pay and a possibly conflicted consultant. But it indicated that further investigation of the relationships was merited. " So, not conclusive but it looked like a pretty convenient coincidence.

SI

I meant to say "the bulk of their compensation" in my original post. As for the value of CEO, it's hard to judge. I have no problem in paying for someone who delivers a successful company. The problem with public companies is that investors expect short-term returns, with little regard for long-term success.

The "eat the rich" mentality always cracks me up especially when these same board members always tell me when I post Libertarian views that if I don't like it get one of my guys elected. Don't like the CEO pay then buy stock in the company and vote him out. It's the shareholders that agree to pay these guys the salaries. Another choice...stop doing business with Nike or Fedex or Coca Cola. System broken? Where have I heard that before. LOL.

EDIT: Shareholders who elect board of directors who pay CEO before someone nitpicks.

Yeah.

A few lifetimes ago I worked as a paralegal for a few corporate defense firms. One case I worked on concerned a very public CEO that was fired and given an enormous compensation on the way out. In going through documents the system I described was clearly seen as the norm both for this company and other companies connected through board members. Even the SEC saw nothing wrong with the general process, although they argued the amount was too high. I read email after email from corporate bigwig board members and former government official board members. They never questioned the total compensation because the consultants, hired by the CEO, had a fancy presentation that "proved" this was a reasonable compensation package. It was only after the compensation became public knowledge that the board members started doing their jobs an examining the compensation package.

I don't care about it as long as my tax dollars don't have to support the company through credits and bailouts. If you're paying your CEO $30 million, you really don't need government handouts.

Life must be pretty nice in free-market fantasy world. We had the discussion pages ago, I feel, but you do realize corporate governance has enormous agency problems, right? Running a proxy fight cost a lot of money. Even if you wanted to vote a director out, you'd pay 100% of the cost, but only get a slice of the benefits. For most investors, it's not worth it (and collective-action problems, among other things, prevent groups of shareholders from collaborating). Directors and executives exploit this situation for their own benefit. (In addition, the largest investors are often institutional funds, run by managers that have incentives to keep pay for these types of people high.)

To JP's point, it's fairly well known that when the SEC required the disclosure of executive compensation-hoping to shame companies into reining in executive pay-it actually increased pay. Rather than shame it executives, it gave them away to justify ever-higher compensation packages.

Mark Cuban has actually talked a lot about this. His take is interesting. Bunch of rich funds buy in to a company. They bring a guy in, pay him huge bonuses for making short term moves to raise the stock (layoffs, etc). Then they cash out and leave the remains to others.

Companies and investors don't worry about long-term anymore. It's why we've seen so many large companies destroyed over the past decade.

Which is why I agree with him that the stock market is for suckers.

You had me at hello.

I know some say too much, others say too little on Libya. I think it was about right for a non-strategic war for US and in supporting our allies in "old Europe" in their fight. I remember the Balkan war when we were dis-proportionately involved considering it was in our allies backyard.

Who Did What in Libya - Real Time Brussels - WSJ