[FoRK] Why they get paid the big bucks...

Stephen Williams sdw at lig.net
Thu Jun 19 11:07:22 PDT 2008


Jeff Bone wrote:
>     
> Ha!  I love it!  Economists using the looters' logic (the part used to 
> justify progressive tax structures) to explain why the income 
> distribution is what it is!
Looter's logic?  They are just saying that what the marginal tax rate is 
doesn't matter when corporations are competing for, and incenting top 
leaders / performers because the bidders will just compensate.  I 
suppose you are referring to the overall topic of trying to address high 
CEO pay in public corporations.  How big of an issue that is depends on 
a number of factors.  I don't really have a problem with it in most 
cases.  It is fine when it is a founder, or someone who somehow is worth 
it (skill, connections, etc.), or when the competitive pool of 
candidates requires it.  It is bad when it is part of a corporate 
looting operation that is killing the corporation and stealing from 
shareholders and employees without value.

I like the pressure that excessive executive funding, along with other 
drains, have that create a negative economy of scale that makes room for 
smaller, more innovative and healthy firms to survive, compete, and 
overtake aged behemoths.

Diminishing marginal utility is what I was describing with marginal 
discretionary income ratios.  You aren't denying that the effect , i.e. 
sub-linearity of utility above middle-class subsistence requirements, 
exists are you?

sdw
>
>   http://econlog.econlib.org/archives/2008/06/trends_in_relat.html
>
> jb



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