Tuesday, October 19, 2004

If You Lived Here, You'd Be Home Now

For all of you who think another four years of Bunnypants will be just peachy, primarilly because he wants to make his tax cuts permanent, you may want to read this article in the LA Times Magazine that spells out how well the top 1% have done while the rest of us have been eating shit:
If ordinary workers' annual pay had risen at the same rate as CEO pay since 1990, a report by the Institute for Policy Studies points out, they would be making $75,338 today—instead of the $26,899 they are taking home. Adjusted for inflation, that's only marginally more than what they made in 1980.

...According to the Congressional Budget Office, between 1979 and 1997 the richest 1% of American families—those who had an annual income of at least $677,900 in '97—saw their incomes more than double. But for families in the middle, income grew by only 10%. For the lowest 20%, it actually fell. That helps explain why the number of Americans living below the poverty line swelled by more than 1 million last year.

You may well answer with the hard-and-fast standard conservative rationale, they deserve that bigger chunk because of ability, i.e. they're so fandamntastic at what they do, they deserve to make the big bucks, the results of their toil justify their obscenely fat paychecks.

Wrong, wrong, wrong:
A study released this year by Rutgers University analyzed more than 1,500 U.S. companies over a 10-year period. It found no correlation between higher executive remuneration and bigger gains for shareholders.

Worse, many companies have seen their earnings and stock prices fall while their executives' pay keeps rising. Occidental Petroleum suffered a 14% decrease in net income in 2002, but CEO Ray Irani's bonus increased to give him a total take-home of more than $24.3 million, twice what he'd hauled in the year before. SBC Communications Inc.'s profit fell 25% last year, and its stock price dipped as well, but Chairman Ed Whitacre still got a fat raise that boosted his take-home pay to $24.8 million. And then there's Michael Eisner, whom Forbes magazine recently declared one of the worst bosses in America in terms of financial performance. Over the last six years, Eisner averaged $121 million in annual compensation, while shareholders were stuck with an average annualized return of minus 5% for the same period.

Basically, the author says, CEO's haven't prospered because they've done well by the stockholders or the health of their companies but because of an "old-boy's club" network, increasingly deferential tax/economic/legal policies, and the continued specious argument that if they do well, we all do well.

Ezra over at Pandagon (where I learned about this article) comments that "This country, I think, would be well served by a bit of class warfare." Hell, it's pretty clear to me that class warfare has been waged fiercly against us by these shitbags for at least 20 years.


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