Yet another example of widening wealth inequality. One of the FAME V conference speakers, Stephane I believe, also noted widening wealth inequality as an economic problem.
Although the Swiss government can not cap executive pay stockholders apparently can via a binding vote (in Switzerland). I am okay with that as long as the stockholders have a means to get together and have these binding votes on executive pay. Employees of privately held corporations probably do not have stock therefore no means to vote.
Let me touch on employees as stockholders a little bit more. Employees with defined benefit (pension) plans and defined contribution
(401k) plans are stockholders. But, the mechanism to get the will of the masses (workers) into action does not appear to be working. Income and wealth inequality are still growing around the world.
I can think of several reasons why the worker-owners (via retirement plan holdings) are not addressing the widening wealth gap:
2. Executives, who ironically are supposed to act on the behalf of shareholders, may issue enough stock to themselves so they retain voting control. It is for this reason I will not invest in Facebook.
3. Outside investors such as wealthy individuals or hedge funds have more ownership than those working at a firm.
4. Worker-owners are unaware of their collective voting power.
5. Disinformation is used to trick worker-owners into voting in favor of wealth and income gap widening initiatives.
Item number 3 points to an interesting research idea: do firms with more employee ownership have more equitable pay? I will end with that question to ponder.
A public service announcement from me…
When debating the pros and cons of the Affordable Care Act, make sure you base your discussion on facts. One unbiased website to get those facts is factcheck.org
Boy, I sure hope the sun will shine tomorrow if the government shuts down.
So let me get this straight. For the past 30 or 40 years Congress has defined the “baseline” budget as one with automatic 6-7% annual spending increases? Please note this is not a Democrat nor a Republican construct. The auto-increase approach has lasted through many permutations of Democratic and Republican leadership over the decades.
I like the author’s suggestion that we return to the old baseline definition: just use prior year spending without any automatic increases. Isn’t that how you create your baseline budget? Who would put in automatic spending increases unconnected to any revenue increases?
The Forbes author noted the current definition for baseline amounts to political doublespeak. For example, calling an increase of 4% a “cut” or “reduction” from the baseline budget. Regardless of your party affiliation, please seek truth and understanding rather than doublespeak-based talking points.
The goal of dialogue should be understanding otherwise it is a waste of time. In the case of our politicians it is also a waste of our tax dollars going towards their compensation.
Finally, how do you think military intervention in Syria would impact the budget deficit? I for one am glad a diplomatic solution may prevail.
This is an interesting article that gives five reasons to ignore college rankings by US News & World Report.
And they complain about taxes and big government? Checkout my Cadence of Finance presentation, accessible via my homepage of efficientminds.com, for causes of the widening wealth gap See Robert Reich’s Aftershock for suggested remedies.
Also see this article from the managing editor of Fortune magazine.