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Rent seeking

Posted by david52 z5CO (My Page) on
Tue, Jul 9, 13 at 10:42

Who killed the American dream?

Whatever happened to the promise that anyone could build a better life by honest labor? That my life would be better than my parents', and that my kids' lives would be better than mine?

That America is gone, now seen only in old Frank Capra movies late at night.

Today in America, the rich are pulling away from the rest of us, taking almost all of the gains for themselves, leaving the middle class scrambling just to stay where they are, and forcing the poor to survive on an increasingly frayed safety net.

-snip -

More recently, an academic debate in a forthcoming issue of the Journal of Economic Perspective has brought inequality back in the news, thanks to a bluntly argued (and titled) paper "Defending the One Percent" by Harvard economist Greg Mankiw (who is a former adviser to George W. Bush, John McCain and Mitt Romney).

In his paper, Mankiw explains why the top 1% are doing so well while the rest of us sprint hopelessly to catch up: The rich are simply better than us. They make more money because they contribute more to society than we do. They are smarter, have the skills that are in high demand, have better entrepreneurial instincts, and work harder. What's more, their kids inherit these traits genetically.

Not only are the rich better than us, the world is also increasingly becoming their kind of place. Technological changes over the past 30 years have made their advantages even more rewarding than before.

The top 1% really do earn their money, and any effort to reduce inequality would make us all poorer, Mankiw says. We'd have to do without the innovations of people like Steve Jobs, J.K. Rowling and Greg Mankiw.

Mankiw takes it as a given that compensation equals marginal product. The rich earn their money because someone pays it to them, and that someone must have a good reason to pay that much. The markets decide pay, that's just Econ 101, and on that topic.

Plenty of pundits have responded to Mankiw's thesis, but none more effectively than Josh Bivens and Larry Mishel of the Economic Policy Institute, who also contributed a paper to the special issue of the JEP.

It turns out that it's not so much what you know, as Mankiw argues, but how much power you have, especially the power to extract economic rents. Bivens and Mishel show that the increase in the incomes of the top 1% over the past 30 years owes more to successful rent-seeking than it does to efficient and competitive markets rewarding education and skills.

What do economists mean by "rents"? Simply put, it's the income that's received over and above what would be required to induce the person to supply their labor or capital.

For instance, Bevins and Mishel say, "it seems likely that many top-level professional athletes would continue to supply essentially the same amount of labor to their sport, even if their salary was reduced by some substantial fraction, because even the reduced salary would be much higher than their next-best options."

Do we need to pay superstars exorbitant amounts of money to get them to show up for work every day? Clearly not. LeBron James voluntarily cut his own pay to help the Miami Heat win championships. His primary motivation is to play with a great team and to build his legacy as one of the greatest basketball players of all time, not to earn a few million extra. For James and many other stars, it's the relative level of their salary that matters most, not the absolute level. They just want to make more than their closest rivals.

One of Mankiw's own examples argues against his theory that innovators would refuse to work if we dared to raise their taxes.

Author J.K. Rowling wrote the first Harry Potter book without any expectation of getting it published, much less of earning a billion dollars from her imaginative stories. And Rowling very publicly remained in the U.K., even as her taxes were increased, because she said she owed her success to the British welfare state.

All this talk about innovators is a smoke screen, anyway. Most of the increase in income for the top 1% (which means most of the increase in income for all of the economy) has accrued to two sectors: Corporate executives and workers in the financial industry. Few of the top 1% are superstar athletes, inventors or artists.

Corporate executives receive millions in excess compensation because of rent-seeking. Many executives are mediocre at their jobs, yet receive extravagant pay packages, regardless of their performance. CEO pay increased by 14 times from the late 1970s to 2000, more than twice as fast as stock prices did, Bivens and Mishel found.

CEOs in other countries earn half as much for doing the same job. And we manage to find qualified people to lead other complex organizations without paying them an average of $14 million a year: The president of the United States makes $450,000 a year, including expenses. The chairman of the Federal Reserve makes just under $200,000. The chairman of the Joint Chiefs of Staff makes about $250,000.

Bivens and Mishel's research further shows that the horrendous widening of equality in America isn't the result of benign and impersonal market forces, but of conscious policy decisions -- for instance, lower tax rates and reduced bargaining power for workers -- that increased the ability of a few to capture almost all the benefits of the economy's growth over the past 30 years.

snip - end quote

this 'rent seeking' is a new concept to me - IOW, what you can get away with?

Here is a link that might be useful: link


Follow-Up Postings:

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RE: Rent seeking

The townspeople continue to see the fabulous clothes the 1% are wearing. Why?


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RE: Rent seeking

Why shouldn't the people that have the ideas, take the risks, and lead, be compensated for the fruits of their efforts?

Why should employees be entitled to those same fruits when they are compensated for their work?

While I agree that it is a positive thing for business owners to share in profits to reward performance, loyalty, consistency, and to encourage low turnover, why is an employee ENTITLED to anymore than a fair wage, agreed upon?

They don't have the ideas, they don't put up the capital or shoulder the burden of making loan payments, they don't have the stress of running a company, they don't take the risk.

There's a reason some people never do more than work for other people. There's nothing wrong with that--but there's a reason they don't deserve to share in the profits like the owner and others who contribute and sacrifice more.

This post was edited by demifloyd on Tue, Jul 9, 13 at 13:31


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RE: Rent seeking

this 'rent seeking' is a new concept to me - IOW, what you can get away with?

The other night a commercial customer said "I've had it up to here with these price gouging HVAC guys".

They asked how can someone justify charging them a few hundred bucks per hour in labor, then not bother to return their calls when their unit failed again.

I told them they can "get away with it" as they have more work/customers than they can handle and that's what others are willing to pay.


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RE: Rent seeking

CEO's aren't usually owners although their compensation package will often include shares of the company. They answer to the shareholders who are the owners of the company but it's the Board of Directors who will set the compensation package for the CEO.


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"Why shouldn't the people that have the ideas, take the risks, and lead, be compensated for the fruits of their efforts? "

This isn't the question, Demi. The question is "how much?" At what point will some people who fairly worship the ground these businessMEN walk on decide that enough is enough? They have pushed compensation to themselves to heights not even thought of only a few decades ago. I consider it a mental illness, akin to narcissism. This is the only way I can possibly understand the gigantic imbalance.

Your question above does not apply to the lowest wage-earners? Why should Walmart employees earn a non-living wage, without benefits? Do they not work hard enough? Are they not smart enough? Not creative enough?

Since you love to use the word "entitled," tell me why some people on this Earth are ENTITLED to compensation they, their children and their children's children could not spend in a lifetime? And all at the expense of those who work at the bottom.


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They answer to the shareholders who are the owners of the company but it's the Board of Directors who will set the compensation package for the CEO.

True, but if one pays a modest amount of attention to the annual reports and submits the proxys, one's only small means of protest is to vote against the election of the board of directors and against the compensation package proposals (like I've been doing for Bank of America for years). Shareholders pretty much blindly vote "for" any issue the company is for and "against" everything the company is against.


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RE: Rent seeking

Good article David. Thank you.


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Since you love to use the word "entitled," tell me why some people on this Earth are ENTITLED to compensation they, their children and their children's children could not spend in a lifetime? And all at the expense of those who work at the bottom.

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I don't think entitled comes into play at the top end or lower end of workers.

I think the market is the market.

If a person possesses skills that another or others feel is worth a certain amount, that is what the market will bear.

It's no one's business other than the people paying and the people agreeing to compensation what that number is.

It is not your business or mine to determine what those people might or might not do with that amount of compensation, or whether they will spend it or not. It confounds me for strangers to speculate about how much money THEY THINK someone else deserves or needs. Barack Obama is one of those people that has commented how much people need or don't need, when they have "enough."


It's simply irrelevant and not our business--it's an agreement and arrangement between an employer and an employee.


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I agree with sjerin. Demi is asking the wrong question.

The people at the top of a corporation have always and will always earn more than the people at the bottom. That is the way it should be. They work more hours, take more risks, have more responsibility.

The problem is the ever widening gap. It used to be that corporations cared about their employee base. The owners/top management still got rich, as they should. But, they also took care of the employee population, as they should. That is not the norm anymore.

I will never understand why this is OK with anyone not in that top 1%. I will never understand how it's not obvious to everyone this is a big problem for society. Let me be clear -- the problem is not that the top executives make a lot of money. They should make a lot of money, and they always have. The problem is that they make more and more money at the expense of their workers.


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The problem is that they make more and more money at the expense of their workers.

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Please expound on that.


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What continues to baffle me is why some are inclined to defend wages so low that tax payer subsidies are required so that the wage earner can have a bare living.

Whats more confounding is that they then complain when those very employees take those tax payer funded deductions and end up paying no taxes!!

Employers should bear the cost of a basic living wage from their bottom line ....not take it from the tax paying public


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In his paper, Mankiw explains why the top 1% are doing so well while the rest of us sprint hopelessly to catch up: The rich are simply better than us. They make more money because they contribute more to society than we do. They are smarter, have the skills that are in high demand, have better entrepreneurial instincts, and work harder. What's more, their kids inherit these traits genetically.

Pretty much says it all doesn't it. There are those who believe these premises and there are those who don't. I definitely fall in the latter.

-Ron-


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"Why should employees be entitled to those same fruits when they are compensated for their work? "

In most companies the CEO's COO's and executives are simply an employee too. Of course they should be compensated more given their responsibility etc but the success of the company comes largely from the employees below executive level and the compensation rates should reflect that,

I can also tell you that the risk taking, creativity and leadership exist at all levels of a company.

I agree there should be a considerable wage differential but the problem is that many large corporations are perfectly willing to stay at a minimum wage until forced to increase it while at the same time granting raises every year ...or even more often, to those higher up the food chain.

As a company prospers so should all who contribute to that...ALL.

Whats really wrong is that when a company is failing or doing poorly the executives either walk with a boat load of severance . Rarely does an executive really pay an penalty for poor performance.....not true of the poor schmuck at the bottom!


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Sjerin and jillinnj -
Thank you. Your posts were superb.

Yes, the "top of the totem pole", if you will, should make more than the base. But, if you think about it in a non-political or non-class view, the base (workers) provide the physical support for the entire operation. If workers do not have the company's best interest at heart, ie keeping the company's product available for use/consumption, then the company will soon become unprofitable and the workers will be out of work. That certainly is not in their best interest, is it? So why is it acceptable for the top to continue to increase their earnings and benefits while cutting hours and/or wages or even totally eliminating benefits for their workers? Does no one ever stop to think that at some point in time the base is possibly going to no longer exist except in a true slave labor sense? How is that justified? Is that what you want for your descendants? Or maybe you are part of that 1% and we just don't know it.

Why can't we all just find it acceptable, and be willing to speak up publically to that fact, that each and everyone should have the opportunity to earn a living that allows them and their families a decent, safe, and satisfying life? In the real world, workers of every level of knowledge and all type of skills are needed. What's wrong with that?

Chase - sorry, I was typing as you were posting so our posts are almost duplicates.

This post was edited by gmatx on Tue, Jul 9, 13 at 15:15


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Would someone explain the "risk" a CEO takes when he/she has a $15 million dollar contract with clauses for early termination, golden parachute, retirement package, etc etc? It seems to me you just need to show up for work, not break any laws your attorneys can't deal with in court, and you're set for life.

Its the same thing for financial services - the other hog trough. It isn't their money they're risking - its the investors money. Why should they be rewarded so handsomely for risking somebody else's' money?


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Its the same thing for financial services - the other hog trough. It isn't their money they're risking - its the investors money. Why should they be rewarded so handsomely for risking somebody else's' money?

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Because that's what someone wants to pay them and thinks they are worth.

Why do you care? It's none of your business what someone else is paid if you're not paying them.


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  • Posted by bboy USDA 8 Sunset 5 WA (My Page) on
    Tue, Jul 9, 13 at 15:48

Yeah! Leave the Royals alone!!

The rich don't operate completely independently from the tax base, quite the opposite. Look at Wal-Mart, with all the publicly funded underwriting that makes the Walton fortunes possible.


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"Because that's what someone wants to pay them and thinks they are worth. "

Well as an investor I care big time about the exorbitant fees and bonuses these folk get for playing with MY money!

They take ZERO risk yet put others money AT risk. Not only that but many of them were absolutely responsible for a financial crash that crippled the economy in the US and elsewhere.

" It's none of your business what someone else is paid if you're not paying them."

Not true..... Who do you think is paying them? They are paid from corporate profits and that comes from the consumer, from everyday folk .


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"Chase - sorry, I was typing as you were posting so our posts are almost duplicates."

Don't be sorry, gmatx. Perhaps we were separated at birth..... ;)


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"They make more money because they contribute more to society than we do."

This statement confuses me a bit. How do they contribute more? What about non-profits and the people who head them and work for them? I'd say they contribute more to society.


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"Sjerin and jillinnj -
Thank you. Your posts were superb."

I concur. Chase also makes excellent points.

There was a time when employees earned a living wage, as it compared to the cost of living, but that's not the norm we see today.

No one has said corporate executives shouldn't earn more than their workers, but the disparity today is astounding in its severity.

"I consider it a mental illness, akin to narcissism. This is the only way I can possibly understand the gigantic imbalance."

I would have to agree with that statement.

"The problem is that they make more and more money at the expense of their workers."

Without whom there wouldn't be a profit, at all.


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Posted by chase z6 (My Page) on
Tue, Jul 9, 13 at 15:49

"Because that's what someone wants to pay them and thinks they are worth. "

Well as an investor I care big time about the exorbitant fees and bonuses these folk get for playing with MY money!

They take ZERO risk yet put others money AT risk. Not only that but many of them were absolutely responsible for a financial crash that crippled the economy in the US and elsewhere.

" It's none of your business what someone else is paid if you're not paying them."

Not true..... Who do you think is paying them? They are paid from corporate profits and that comes from the consumer, from everyday folk .

*

Really? That's preposterous.

The consumers GET SOMETHING IN RETURN for their money--a product or a service. What happens to that money that they exchange for a product or service is NONE OF THEIR BUSINESS.

Everyday folk pay their money and get their product or service.
End of their involvement, Chase.

Lucy Jane buys a pair of running shoes and that's what she gets in exchange for her money. It's none of her business how much the running shoe company pays the CEO. If she doesn't like it, then she can buy running shoes from another company that pays their executives what she thinks an executive for a running shoe company should make.

Simple.

As to investors--investors know full well who is in charge of setting salaries and they can vote. If they don't like it they don't have to invest or can sell.

What's even more preposterous is that TAXPAYER MONEY goes to welfare recipients and just try and mention that that money should be controlled as to how it is spent and see the wailing going on about it's their money and their business.

What blatent hypocrisy!


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""Because that's what someone wants to pay them and thinks they are worth."

Ah, there in lies the crux. Because in practice, shareholders and investors have extremely limited, if not flat out 'no' say in the matter of what CEO's and fund managers are paid.

What are your options if you want to invest in a Standard and Poor 500 company, but avoid the blatant CEO ripoff?

"When the S&P 500 index soared to a record high earlier this month, everyone from investors and CEOs were reaping the benefits.

Everyone, that is, except for the workers.

The ratio of CEO-to-worker pay at companies in the S&P 500 was 354-to-1 last year, according to the AFL-CIO, the umbrella organization for many of America’s unions. That’s up from 281-to-1 in 2002 and 42-to-1 in 1982, the organization found.

This news probably comes as little surprise to regular readers of HuffPost Business. We’ve highlighted other reports in the past indicating that the ratio between worker and CEO pay is pretty out of whack at many American companies. For example, Walmart’s CEO earns 1,034 times that of the company’s median worker, according to a March analysis from PayScale.

The same analysis found that the CEO-to-worker pay ratio at Target was 597-to-1, and that the ratio at Walt Disney was 557-to-1. Other studies have found that CEO pay is growing at three times the rate of everybody else’s, and that CEO pay grew 127 times faster than worker pay over the past 30 years.

So, if you want to invest in any blue chip company, then you are pretty much forced to put up with exorbitant CEO pay.

But please, lets not interject the capitalist bromide about risk and reward. CEO's don't risk anything. And their reward is based on this concept of 'rent seeking', which in the US case is a rigged system where everyone on the top scratches each other's back with ludicrous compensation - they all sit on each others' boards of directors, etc. Its like the professional baseball players getting together and deciding their salaries, not the team owners.


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RE: Rent seeking

I never said CEOS risk their money in a company.

I said people that start businesses do, and take the risk.

CEOS are paid highly because that's what the people that pay them think they are worth.

They are not paid that money for no good reason.

The fact that it bothers you so much is confounding to me.

There is no finite piece of the pie.

Go start your own company or become a CEO.

Then you can keep the pay or give it away or build Habitat for Hunanity Homes with all of it. You can buy troll dolls with it for all I care. But even people that buy yachts or big houses with it contribute to the economy and hire people and cause people to be hired with their purchases.

I think that people being rewarded for possessing rare talent and insight in the business world and then providing more jobs for other people with their salary is a good thing.

If you can't get hired to become a CEO then that explains why it's not so easy.

This post was edited by demifloyd on Tue, Jul 9, 13 at 21:53


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RE: Rent seeking

At the link is a .pdf of the essay, "Defending the One Percent" - interesting to read. Excerpt:

"An especially important and particularly difficult case is the finance industry, where many hefty compensation packages can be found. On the one hand, there is no doubt that this sector plays a crucial role. Those who work in commercial banks, investment banks, hedge funds and other financial firms are in charge of allocating capital and risk, as well as providing liquidity. They decide, in a decentralized and competitive way, which firms and industries need to shrink and which will be encouraged to grow. It makes sense that a nation would allocate many of its most talented and thus highly compensated individuals to this activity. On the other hand, some of what occurs in financial firms does smack of rent seeking: when a high-frequency trader figures out a way to respond to news a fraction of a second faster than his competitor, his vast personal reward may well exceed the social value of what he is producing. Devising a legal and regulatory framework to ensure that we get the right kind and amount of financial activity is a difficult task. While the solution may well affect the degree of equality and the incomes of the 1 percent, the issue is primarily one of efficiency. A well-functioning economy needs the correct allocation of talent. The last thing we need is for the next Steve Jobs to forgo Silicon Valley in order to join the high-frequency traders on Wall Street. That is, we shouldn’t be concerned about the next Steve Jobs striking it rich, but we want to make sure he strikes it rich in a socially productive way."

Somehow, the essay doesn't touch on who brought down the world economy and threw the country into the Great Recession, costing millions of people their jobs, savings, homes, etc.

Here is a link that might be useful: link to the essay in question


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RE: Rent seeking

If someone earns a lot of money, how does that prevent others from earning more money also?

In other words, if Bill Gates earns an extra billion dollars from his investments this year, how does that stop you or me from earning more money?

If you prevent good ol' Bill from earning that extra billion dollars (or if you take it away after the fact), will you have more money in your pocket or paycheck as a result?

I doubt it.

Unless you own your own business and decide what to pay yourself, you get paid pretty much whatever the prevailing and customary wage is for your job. Your paycheck -- the value of your work -- reflects what your abilities, specialties, and experience are worth within your occupational field. And that changes from time to time. It also varies a bit within geographical areas. You've gotta roll with the punches and be willing and able to adapt.

If you want to be paid more money you have to be worth more and produce more value for your employer.

It's pretty much the same if you're self-employed. You can't pay yourself more than your business brings in. You prosper or go broke based on your ability to generate revenue.

High-powered, high-value professionals are a bit like the commodities market. They are worth whatever an employer ("buyer") believes they are worth now and will be worth in the near future. That assessment may turn out to be right or it may turn out to be wrong, in which case even high-powered executives are let go when they don't perform accordingly.


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Demi et al seem to think our market is a giant, robotic machine with no human interaction or tinkering involved. Theories are great in theory, but humans have a way of messing with them to tip the balance toward the top, always. Could we be more polarized on a subject?

"That assessment may turn out to be right or it may turn out to be wrong, in which case even high-powered executives are let go when they don't perform accordingly. "

Lionheart--they are let go with a huge, undeserved payout, in many cases. How does that fit into your business philosophy?


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Most of the big corporations are effectively in monopoly positions. Hog trough is about right. That explains the incredible compensations.

There is no comparison whatsoever with a small business owner competing in a local area with numerous other similar businesses.


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  • Posted by bboy USDA 8 Sunset 5 WA (My Page) on
    Tue, Jul 9, 13 at 19:42

Soon we must all learn to be sure and bow when the lord rides by so he does not take our shacks or crops and throw us off the estate. Definitely we must never speak to him out of turn, as he might take something we said as a complaint or criticism! We must leave him to go about his lordly business, without comment, as what he does is always to the full benefit of all of us.

This post was edited by bboy on Tue, Jul 9, 13 at 19:48


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"Lionheart--they are let go with a huge, undeserved payout, in many cases. How does that fit into your business philosophy?"

Well, if some employers are stupid enough to consent to such an arrangement, they certainly deserve to pay through the nose for their own incompetence when they hire someone who turns out to be inadequate and ineffective, to say the least.

I don't have much sympathy for those types of arrangements, but people are free to offer and accept whatever legal contracts they want. They may be risky and full of unintended consequences, but there are no guarantees.

Anyway, no matter how bad the results, you can't renege on contractual obligations. Sorry that it was a really stupid contract that put the employer at a big disadvantage, but paying the agreed upon severance is far cheaper than a lawsuit. Enforcing contracts is an appropriate function of government, and the company wouldn't have a leg to stand on if they were in violation of the contract.

No matter how much an employee is worth, try not paying them their wages. See what happens. There are laws against not paying employees what they are owed, regardless of how wealthy or impoverished they are.


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The problem is that they make more and more money at the expense of their workers.
*

Please expound on that.

Chase and others have already done that for me since I posted. Walmart is the perfect example. They have created a work place where the worker bees cannot make a decent living. They only higher part time so to avoid paying benefits. They cut hours. Their wages are horrendous. Doing all this makes the Walmart family richer and richer at the expense of their employees. They could pay employees a living wage and provide benefits and they still be very rich. Way way richer than their employees, as they should be.


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......and at the expense of the taxpayer who subsidize these low wages .


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Posted by chase z6 (My Page) on
Wed, Jul 10, 13 at 8:49

......and at the expense of the taxpayer who subsidize these low wages .

*

The taxpayer should not have to subsidize others because they don't make enough money for their wants and needs.

I agree that Walmart should probably raise their wages for some employees.

However, that would affect their success and low pricing, and artificially raise wages. If people are working at these jobs with what they pay, then that is what the job is worth.

Costco pays much more and is a very successful business model, but that is Costco's decision

People don't have to work at Walmart.
Taxpayers don't have to subsidize them.

There are other choices for employer and employee--the catch is they are not easy ones and most people want to take the easy way in life.


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RE: Rent seeking

What we're subsidizing is someone's inability, or unwillingness to support themselves, kids and their lifestyles.

We pay substantially higher than market rates however we have many employees on numerous forms of welfare as they work part-time, work full-time, but lack education, licenses, skills, knowledge, experience and performance, or they have kids they can't support, cars they can't afford, rents they can't afford - too much to list.

Many don't want to work full-time, overtime, nights, weekends, out-of-town, on the road, second shift, on-call hours, or they quit, so they never move up the ladder.


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Yes, Mark, we know since you constantly tell us. But, that's not the point of the OP.

People don't have to work at Walmart.

So easy to say. But when it's the only game in town because Walmart has forced most other stores out of business, a lot of people don't have many options.

It's also the easy way out. Sure, why should we bother to complain about their business practices and try to force a change when we can just say "don't work there" and look the other way. But, as Chase points out, it costs us all in the end.

Costco is apparently a good company to work for. However, they only have so many jobs available. It's too bad Walmart can't care for their employees the same way.

I cannot wait for the new Costco to open a few minutes from my house. I plan to shop there. And I will not buy anything at Walmart. Won't enter their stores and won't shop on line. Not giving them my money is all I can do. I wish more would do that, but I also understand that for some they have to shop there because some things are cheaper. It's a vicious cycle.


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If I didn't shop store A, B or C because I didn't like their business practices - there would be few stores left to shop, plus I'd be punishing their employees, many of which desperately need the income and experience.

Walmart will hire many of the job seekers others have rejected and the workers others have fired.


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I remember not so long ago when working at a grocery store was a viable career choice - they worked 40+ hour weeks with overtime, they had decent health and retirement benefits.

And then Walmart expanded and set the bar - low, part time wages, no benefits, and there were cheaper groceries.

And so to compete, all the other grocery store chains followed suit - bust the unions, lowered wages, hours, cut benefits, etc.

And, gee whiz, the companies started paying their CEO's exorbitant salaries and benefits.

So, the theory goes, the consumer saves $2 a week on groceries because the company slashed the wages of the majority of the workers, the tippytop management paying them selves some grotesque amount to carry out this revolutionary new, innovative, productive-to-society tactic, all so the taxpayers can shell out rent subsidies, food stamps, and medicaid to the newly impoverished workers.

Win win, I tell ya. This is what some of those leftist hippies call wealth redistribution.

Here is a link that might be useful: CEO Safeway stores compensation


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Before Walmart stores came to local regions the mom and pops, grocery stores, discount stores, drug stores etc were not only screwing workers, but price gouging customers as well.

Most of these businesses offered mostly part-time jobs with little chance for promotion. They could treat workers and customers like $hit due to the lack of competition.

When Walmart stores came to local regions, many left for jobs at Walmart as they had more full time jobs, higher part-time hours, more flexible scheduling and more chance for promotion.

Many of our relatives (currently working for grocery stores, or discount stores) have applied for jobs at Walmart as they'll work more hours, work full time and have a chance for promotion.

Walmart is easier to work for as well. They're not as quick to write up, suspend, demote or terminate workers for relatively minor issues.


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I'm talking about the major grocery chains - Safeway, Krogers, etc, not the mom and pops.


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We haven't given a cent to the Walmart corporation in well over a decade. It's our way of boycotting their business practices.

And we shop locally if we possibly can. We've been giving the smaller local pharmacy our business for about a decade, and also the smaller local grocery store, the hardware store, and auto parts store. Sometimes we have to shop online for the items we want, but my husband does a bit of research before purchasing so we know where our items originate from and how they're produced.

We're only one family, but it's our way of letting many of the larger corporations know that we do not approve of the way they do business, or the way they treat their employees.

And if we're conscientious about how corporations treat the environment and their employees, there must be a lot of other families that are, too.

The problem is, corporations like Walmart have maneuvered so they're practically the only game in town. In many areas, corporations like this feed off of and drain the economy... but the people have little choice but to work for and shop at these giants.

Meanwhile, the top executives manage to scrape every ounce of cream off the pie that they can get... never mind the abject disparity, or the fact that their employees are forced to supplement their income with state and federal assistance...



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RE: Rent seeking

As I've said before .......our lifestyle (the royal our) depends in great part on the efforts and work of those in menial jobs.

For many reasons everyone can't be in well paying jobs. Our social system wouldn't work if that was the case.

Those at the bottom of the food chain deserve a wage that allows a basic standard of living. One that allows them shelter, food and clothing without relying on the tax payer to subsidize their wages.

Such subsidizes are nothing short of corporate welfare....a welfare that seems to be OK with many. Instead those that receive these subsidies are criticized.


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RE: Rent seeking

I'm talking about the major grocery chains - Safeway, Krogers, etc, not the mom and pops.

Most of the stores I'm talking about are, or were major chains.

Our supermarket and discount store chains have the largest percentages of part-time workers and least chance for promotion.

Many workers have weeks with zero hours and many weeks with 1 or 2 4-hour shifts.

4 hour shifts are expensive for many workers due to transportation and daycare costs.

Many of these businesses are grossly overstaffed with scheduled and on-call part-timers necessary to meet changing daily/weekly/monthly demand, so few other then on-call workers have the opportunity to work many hours.

Wages have low ceilings as well. Many that have worked for these businesses for 10 plus years don't make much more than new hires.


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RE: Rent seeking

Such subsidizes are nothing short of corporate welfare....a welfare that seems to be OK with many. Instead those that receive these subsidies are criticized.

Exactly!


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RE: Rent seeking

CEO of Safeway made 11.3 mil.
CEO of Kroeger made 7.8 mil.
CEO of Albertsons made 38.6 mil in 5 years
CEO Walmart made 20 mil.

Going back to the theme of the OP, this is rent seeking - they do it because they can get away with it. Tell me what they do for society or their share holders or their employees that warrants that kind of annual income.

particularly in light of how other companies do so much a better job of it. like, say, Costco, whose employees make $17 an hour, and the CEO makes $500,000.

Admittedly, with bonuses, his income went up to 2 mil in 2011. Still a fraction of what the others rake in.

So I'd like to know why. Not some diversion about how I can do it too, or why do I care how much somebody else makes.

I care because the average worker at Walmart - as well as these other grocery chains that mimic their business model, receives $730 in Medicaid and $1,222 in other government assistance to meet basic household needs. While their CEOs rake it in by the millions.

As should every tax payer care. We're directly subsidizing a massive transfer of wealth.


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RE: Rent seeking

"We're directly subsidizing a massive transfer of wealth."

That's it in a nutshell, and it's incredibly wrong... but we can only stop it as a group.


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RE: Rent seeking

Very well said, David.

I would have no problem with the CEO of a company making whatever it is they make if their employees wages also rose at a similar rate over the last 30 or so years. But, they haven't. Therefore, the gap widens and we as a society are screwed. We subsidize the transfer of wealth and pay for the aid those employees on the bad end receive. And some people only complain about their taxes helping these people instead of complaining about why they need the help. I'll never understand the mindset.


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RE: Rent seeking

Lets look at other successful companies - Apple, Google, Microsoft, other tech companies. Where, arguably, the owners/inventors have made a significant contribution to society. They took risks, they worked hard, and the winners/ founders/risk takers are all billionaires.

At the link are their average starting and mid-career salaries. Not to mention the perks and benefits they get.

And their employees contribute to society by paying taxes, not the other way around.

So, IMHO, you have two business models under the good old capitalist system - one where there is a tangible benefit to society, risk takers are handsomely rewarded, great salaries and benefits.

And the other, where they make their money by hammering the employees and letting the tax payer pick up the difference between what they pay and survival.

And I can see where, if you hired away an individual entrepreneur, say a Steve Jobs, from Apple to work at Pixar, you can pay him a bundle because he's actually going to make you a few billion dollars more in profits.

I'm yet convinced that holds true with all these mega-salary CEO's.

Here is a link that might be useful: link to salaries in the tech sector


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RE: Rent seeking

It is any consolation to any of you this has all happened before and it always goes crash in the end when the peons with nothing to lose finally start killing the CEO's and Owners and get killed themselves in return-big mess, civilization as we know it ends and the whole mess starts over again.

If CEO's are so darn smart then why don't they see it coming? If you do not throw a bone or two to the workers they will finally throw a fit-not that it is going to get them anything but why not?

Through out history they aren't called CEO's -maybe the Oligarchy or the Aristocracy or something but they are the same hog like people who claim through some mumbo jumbo or other that they are due what they claim. At the moment we call it 'the market' like some god or other dictated that a very small group gets all the goodies and the rest get the skag end of nothing. So it goes.

edited to ask when Garden Web got spell check???? A bone, a bone!!!!

This post was edited by patriciae on Wed, Jul 10, 13 at 16:31


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RE: Rent seeking

Going back to the theme of the OP, this is rent seeking - they do it because they can get away with it. Tell me what they do for society or their share holders or their employees that warrants that kind of annual income.

*

WHO is the arbiter of who decides who "warrants" that income?

The COMPANY.

Which means it is none of your business what other people are paid if you're not paying the salary and what you think about whether someone "warrants" an amount in salary is totally inconsequential.


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RE: Rent seeking

Which means it is none of your business what other people are paid if you're not paying the salary and what you think about whether someone "warrants" an amount in salary is totally inconsequential.

Not true.

It is my business if wages are suppressed to the point that employees qualify for food stamps and other benefits.

It's my business anytime a company moves to socialize the costs while privatizing the profits. You can sit by while your community goes this route, but others disagree and have every right to publicize the 'hidden costs of low prices.'


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RE: Rent seeking

  • Posted by bboy USDA 8 Sunset 5 WA (My Page) on
    Wed, Jul 10, 13 at 23:07

Yes: Wal-Mart: The High Cost of Low Price. A few here need to watch this before making any additional completely erroneous statements about Mal-Wart and what it is all about. And the worldwide fallout of other businesses aping the model.

Catch Frontline: Is Wal-Mart Good for America? while you are at it.


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RE: Rent seeking

So another deflection - you couldn't answer the question of what they do to warrant that income.

Now, the CEO of Microsoft, Apple, Google, etc - thats pretty easy to explain why they warrant their income. They invent new products, new industries, they revolutionize the way we do business, they increase productivity, etc etc.

Why the CEO of Safeway? What did he do that is worth $11 million a year? What innovation, what new thing, what break through thats good for society, what massive benefit has he done for his share holders, employees, customers?


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RE: Rent seeking

bboy--I have seen the Walmart documentaries.

*

Posted by david52 z5CO (My Page) on
Wed, Jul 10, 13 at 23:25

So another deflection - you couldn't answer the question of what they do to warrant that income.

*****

--David--there is NO deflection and no need to deflect.

I don't have to answer the "question of what they do to warrant that income."

That is the POINT that I made about who is the arbiter--it is the arbiter that decides if the person they are paying warrants the income.

Your OPINION about whether someone warrants it or not is inconsequential.

Nancy, your comments fall under that answer, as well.

The fact that government sometimes supplements people does not justify paying someone more than they are worth (employees).

No one makes the government supplement people's incomes.
Plenty of people work more than one job, or work hard to be promoted and make more money. Mark James enumerated some of those reasons that people stay in low income jobs and don't rise above them. It's not Walmart's fault that people don't do better--the cream rises to the top and those worthy of higher paying jobs get them, or get the experience and go elsewhere.

I've already said that Walmart should, in some cases, increase salaries.

But that is THEIR business, and as long as they are complying with law, or any company is, it is entirely their business how much they compensate anyone--including their executives.

I don't have to answer how or if anyone warrants pay because it's not my money that's being paid out and it's not yours.


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RE: Rent seeking

The fact that government sometimes supplements people does not justify paying someone more than they are worth (employees).

Sometimes?

That's WM's policy regarding a large share of its store employees.

The communities that are stuck with the bill do have a right to involve themselves in WM's business.

Supporting living wage laws is a start.


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RE: Rent seeking

Posted by nancy_in_venice_ca SS24 z10 CA (My Page) on
Thu, Jul 11, 13 at 1:58

The fact that government sometimes supplements people does not justify paying someone more than they are worth (employees).

Sometimes?

That's WM's policy regarding a large share of its store employees.

*

Um, yes. Sometimes, like I said.

That is what "sometimes" means--by your own statement you qualified by "a large share of its store employees."

That means not all of them are subsidized all the time by the government.

So why did you ask "sometimes" when that's exactly what I said, exactly the truth, and exactly what you said with your qualifier?

Please advise me as to what number that "large share" is--exactly what share of Walmart employees are supplemented with welfare.

Those allegations are bandied around about and I don't see a breakdown of Walmart employees and welfare.

I'll wait while you back up your allegations with credible sources.

I will tell you now that it won't change a thing.

When Walmart complies with the law and pays minimum wage, they can pay people what THEY think they are worth and what you or David think they are worth or not worth, is totally inconsequential.

It is not your business and not your money.

I think working at a low paying job at Walmart is great experience for people that otherwise wouldn't have a job, and a great incentive to climb the ladder and do better, or go on to other work with the experience gained.

Did you ever stop to consider if you didn't support subsidizing these employees they might hurt just enough to want to do better on their own?

This reminds me of the story of young man (I won't use his name), a student of my husband's. He was failing math his senior year and despite missing appointments for special after school tutoring sessions my husband offered him, despite my husband pleading with his mother, this student would say, "Don't worry Mr. X, I'll get by." "I'll get by" got repeated most of the school year with a confident smile and dismissal of all help and no interest in trying.

Sure enough, he was failed.
Sure enough, somehow he graduated anyway.

He "got by" just like he knew he would.
He knew the system would compensate for his failure to try.

That's the same principle.

It's not Walmart that is the problem.

This post was edited by demifloyd on Thu, Jul 11, 13 at 2:27


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RE: Rent seeking

It is not your business and not your money.

Wrong on both counts.

The welfare of my community is my business, and WM's business model does cost me money.


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RE: Rent seeking

You don't get it.

Your community CHOOSES to give people money.
It doesn't have to.

YOU and your community cost yourselves money with YOUR choices to subsidize people.

I'm not surprised with this typical line of thinking, however.

It blames someone else for your choices.


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RE: Rent seeking

I do get it.

WM asks for concessions re property taxes and other assessments in turn for promises to provide employment. A land use committe makes a decision and then various council people - often recipients of campaign contributions from those favoring WM - vote. WM then pays the lowest possible wages - without benefits - adding an additional loss to the community.

The deck is always stacked in favor of WM.

I'm not surprised by your inability to view the entire context of any particular situation.

I am surprised by your support of WM, a company that has a history of bribery in Mexico, and illegal labor practices in the U.S.


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RE: Rent seeking

"Walmart fought hard to persuade DC residents to let it open stores in the district. But now the retail giant is threatening to walk away from three planned sites if the DC City Council passes a “living wage” bill that would require all major employers to pay workers a minimum of $12.50 an hour.

Walmart claims that the bill, which applies to retailers with corporate sales of $1 billion or more and stores that are 75,000 square feet or larger, is “arbitrary and discriminatory.” In a Washington Post editorial, general manager Alex Barron issued an ultimatum to Mayor Vincent Gray: veto the bill, or Walmart will halt construction on stores at Skyland, Capitol Gateway, and New York Avenue.

In less than 24 hours, the corporation is already seeing results: Some council members who voted for the living wage bill are now balking. Councilmember Kenyan McDuffie said he is “going to give this some thought” because he voted yes “without knowing Walmart was going to pull out.”

Walmart is accustomed to singlehandedly taking down worker rights legislation. Seven years ago, Walmart threatened to scrap its plans to open stores in Chicago after the city passed a similar living wage law. The mayor promptly vetoed the bill. In March, New York raised its minimum wage but gave tax subsidies to Walmart and other firms that hire seasonal workers. Unions claimed at the time that Walmart had influenced the deal behind the scenes.

Other large stores like Costco, Home Depot, Target, and Macy’s would also have to abide by the DC proposal. But the new $12.50 minimum would be an especially dramatic change for Walmart, which currently pays workers 28 percent less on average than other large retailers, even as it reaps profits of nearly $450 billion a year. In contrast, Costco will have no problem meeting DC’s requirement if it passes - the average Costco worker currently makes $21.96 an hour.

Walmart’s refusal to pay their employees a livable wage translates into a bigger burden for taxpayers. A Congressional report found that the workforce of a single Walmart store consume roughly a million dollars in public benefits every year, relying on “safety net” programs like Medicaid, food stamps, school lunch, and housing assistance to survive. Since Walmart is the largest private retailer in the nation, the full taxpayer cost of the store’s labor practices is exponentially higher."

Here is a link that might be useful: Can we get a living wage?


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RE: Rent seeking

I am surprised by your support of WM, a company that has a history of bribery in Mexico, and illegal labor practices in the U.S.

*

I do not necessarily support Walmart or not support Walmart.

I am only pointing out that Walmart's businesses choices are not to "blame" for someone else making the choice to dole out welfare.


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RE: Rent seeking

When taxpayer dollars are used to subsidize corporate profits it most definitely is the business of the citizenry. Corporate welfare is no different than personal welfare. If one is "our" business both are "our " business.

Walmart and others pay what they do because the law allows them to. It has nothing to do with the "worth" of an employee. If the minimum wage went up tomorrow would Walmart start paying employees more because the employee was "worth" more .....or because they had to?

In Canada Walmart pays a higher hourly rate AND a payroll tax that pays for health insurance. Same company.....why do they do it here? Because the law says they must. We have no footstamp program, no tax credits for low wages.

.....and the parking lots are full and the prices are low.

If wages that require high levels of social assistance are not anyones business neither is it their business that these people pay no taxes , nor is it their business how welfare money is spent.

You're right you get more of what you subsidize.........low wages and more foodstamps.


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RE: Rent seeking

I don't have to answer the "question of what they do to warrant that income."

The thread is about rent seeking. The question is: what do these CEO's do to justify that salary - 'justify' - in the sense of the OP and the Harvard dude economist high-fallutin' justify-capitalist talk. Rent seeking is the amount of money over and above what the job is worth.

You can't justify it, the authors of the papers can't justify it, and it flies in the face of clear evidence that they're grossly over-paid for doing the same job someone else does for a fraction - all the while treating their employees decently, not like so many disposable serfs.

And nobody can justify why the CEO of a retail grocery store should earn $20 million a year. Versus, say, 10% of that - like the guy at Costco.

At the link is a recent article on Costco, now the 2nd largest retailer in the US after Walmart. excerpts:

" Joe Carcello has a great job. The 59-year-old has an annual salary of $52,700, gets five weeks of vacation a year, and is looking forward to retiring on the sizable nest egg in his 401(k), which his employer augments with matching funds. After 26 years at his company, he’s not worried about layoffs. In 2009, as the recession deepened, his bosses handed out raises. “I’m just grateful to come here to work every day,” he says.

This wouldn’t be remarkable except that Carcello works in retail, one of the stingiest industries in America, with some of the most dissatisfied workers.

snip

While competitors lost customers to the Internet and weathered a wave of investor pessimism, Costco’s sales have grown 39 percent and its stock price has doubled since 2009. The hot streak continued through last year’s retirement of widely admired co-founder and Chief Executive Officer Jim Sinegal. The share price is up 30 percent under the leadership of its new, plain-spoken CEO, Craig Jelinek.

Despite the sagging economy and challenges to the industry, Costco pays its hourly workers an average of $20.89 an hour, not including overtime (vs. the minimum wage of $7.25 an hour). By comparison, Walmart said its average wage for full-time employees in the U.S. is $12.67 an hour, according to a letter it sent in April to activist Ralph Nader. Eighty-eight percent of Costco employees have company-sponsored health insurance; Walmart says that “more than half” of its do. Costco workers with coverage pay premiums that amount to less than 10 percent of the overall cost of their plans. It treats its employees well in the belief that a happier work environment will result in a more profitable company. “I just think people need to make a living wage with health benefits,” says Jelinek. “It also puts more money back into the economy and creates a healthier country. It’s really that simple.”

-snip-

Jelinek earned $650,000 in 2012, plus a $200,000 bonus and stock options worth about $4 million, based on the company’s performance. That’s more than Sinegal, who made $325,000 a year. By contrast, Walmart CEO Mike Duke’s 2012 base salary was $1.3 million; he was also awarded a $4.4 million cash bonus and $13.6 million in stock grants. snip end quote

Here is a link that might be useful: link


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RE: Rent seeking

David--it does not matter whether the salary can be justified or not, by anyone--other than the people paying the employee.

It is the PRINCIPLE of this tenet that an employer can pay an employee as much as it wants to without the government stepping in and legislating how much that person can be paid.

The government already has stepped in and dictates the minimum that someone is paid. Okay.

The government has no business setting IT'S valuation on an employee's salary in a private business.

It is still simply no one's business, regardless of whether you think it is justified, I think it is justified, Obama thinks it is justified ("I do think at a certain point you've made enough money"--Barack Obama--and very chilling I might add), or even the employee receiving the money is.

It is simply none of your business.

I can think of many positive and productive avenues other than complaining about and wanting to limit how much money the other guy makes.

It reminds me of the thinking that goes with many regarding Obamacare--as long as someone subsidizes me, I don't care if you have to pay more and lose what you have worked for.

I guess there will always be those that won't be satisfied until the other guy loses what he has worked and saved to acquire and it is taken by force to hand over to the other guy who has not done the same.

At the least, if that can't be accomplished, then legislate punishment because they accomplished something they didn't.

We have to have equalizers, don't we?

That would be the federal government and liberals.

This post was edited by demifloyd on Thu, Jul 11, 13 at 11:51


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RE: Rent seeking

Kudos for this weeks top string of blatant misinterpretation, diversion, and sequence of unrelated non-sequiturs.


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RE: Rent seeking

"Rent seeking is the amount of money over and above what the job is worth."

Not to be confused with consumer surplus, the "worth" a consumer reaps over and above what he pays for the product.

Worth?

Water and air are "worth" a lot to me. They really cost me very little.

Hay


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RE: Rent seeking

"The government has no business setting IT'S valuation on an employee's salary in a private business. "

.......it also has no business subsidizing corporate profits with taxpayer money but they do.

I recall Michelle Bachman saying that the minimum wage should reduced to , I think she said $2, then there would be no unemployment. Can you imagine the food stamp
programme then!


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RE: Rent seeking

  • Posted by bboy USDA 8 Sunset 5 WA (My Page) on
    Thu, Jul 11, 13 at 12:20

How much is the crowbar that might pry open closed minds worth?

We really need one here, as the simple relating of factual information, over and over appears to have no effect.

Or the forum can just go on being the same posting of falsehoods followed by corrections drill, for years.


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RE: Rent seeking

I agree that unless it is time of a national emergency, the federal government should not subsidize companies.

The glaring fact of the matter that is becoming more and more obvious is that the government is not a panacea to everyone's problems and not Santa Claus.

Well, it is, for now.

The reindeer are beginning to come home to roost.


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RE: Rent seeking

" agree that unless it is time of a national emergency, the federal government should not subsidize companies. "

The problem is that the issues, social and corporate, are so tightly intertwined that they cannot be undone easily.

It takes conviction and politicians who aren't beholding to corporate donors. My personal feeling is no one has the guts...and that's not a new thing.


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RE: Rent seeking

politicians who aren't beholding to corporate donors.

Not a chance in Hades with the Citizens United decision.


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RE: Rent seeking

How much is the crowbar that might pry open closed minds worth?
We really need one here, as the simple relating of factual information, over and over appears to have no effect.

Or the forum can just go on being the same posting of falsehoods followed by corrections drill, for years.

You can say that again! Oh, wait, I just did ;-)


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RE: Rent seeking

Yep.


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RE: Rent seeking

If we must have a retail/service industry economy, then I really do hope Costco hits our area. I'd suffer through the work day for a decent salary and benefits like that!

And I have a lot of respect for a CEO that believes keeping employees happy and healthy leads to a profitable company, and takes a lesser salary, himself, toward that end.

There is no way to justify $20 million as an annual salary... no job in the world is worth that much, when employees lower on the same totem pole have to beg for state assistance to supplement their salaries, and receive no health insurance or other benefits.


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RE: Rent seeking

If we must have a retail/service industry economy, then I really do hope Costco hits our area.

They may if you have enough upper class and business owners in your region.

Costco Member Demographics

Costco members are predominantly affluent, married, educated professionals. They are local business owners, homeowners, own two vehicles or more, and have higher than average household income and education.


Gender
Male 42.8%
Female 57.2%

Age
25-34 5.9%
35-44 18.6%
45-54 30.1%
55-64 23.7%
65-Older 20.8%
Median age 53.3

Household income
$20,000 - 29,999 2.0%
$30,000 - 39,999 2.7%
$40,000 - 49,999 4.5%
$50,000 - 74,999 14.0%
$75,000 - 99,999 13.7%
$100,000 - 199,999 44.1%
$200,000 or more 11.1%
Median income $107,800

Martial Status
Married 80.3%

Education
Any college 86.7%
Graduated college or more 55.2%

Primary residence
Own residence 94.1%

Business owners
Own a business 50.9%

Investments
Have/own investments 82.6%

Vehicle ownership
Own or lease any vehicles 97.7%

Internet usage
Used the Internet in the last 30 days 96.6%


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RE: Rent seeking

"CEOs in other countries earn half as much for doing the same job. And we manage to find qualified people to lead other complex organizations without paying them an average of $14 million a year: The president of the United States makes $450,000 a year, including expenses. The chairman of the Federal Reserve makes just under $200,000. The chairman of the Joint Chiefs of Staff makes about $250,000."

How much was Hillary making?

(NYT article from Google News. You might not be able to reach it from here. The title is "Hillary Clinton Taps Speechmaking Gold Mine", but here's the gist of it.)

I wouldn't be worrying too much about Obama getting underpaid. Obama and his kids, the Clintons and Chelsea won't ever have to worry about whether they can afford a nice vacation. For the rest of their lives.

But, they're "worth" it.

"Just a few months after leaving the State Department, Hillary Rodham Clinton has plunged into the lucrative world of paid speechmaking, joining a branch of the family business that has brought the Clintons more than $100 million since her husband left the White House in 2001.

For about $200,000, Mrs. Clinton will offer pithy reflections and Mitch Albom-style lessons from her time as the nation’s top diplomat. (“Leadership is a team sport.” “You can’t win if you don’t show up.” “A whisper can be louder than a shout.”

Not bad for a day's work. Worth every penny.

Hay


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RE: Rent seeking

I don't think the ORIGINAL articles have been posted on this thread.

I think this is the articles:

Defending the 1%

The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes

It doesn't look like the second paper is a direct rebuttal of the first paper. Just two articles about the general topic presented in a special journal publication about the topic.

And, since I have it, a short PBS article discussing the first author above.

Some of it is heavy reading and the terms "rent" and "rent-seekers" are used sometimes with different meanings, I think.

But good articles and good for seeing how economists on the two sides think and argue the points. I don't really have the time to debate them with you. Wish I did.

Hay


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RE: Rent seeking

I did post the original Harvard study - 24th post from the top.

We haven't touched on his contention that a significant portion of economic success is genetically inherited.


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RE: Rent seeking

By that, do we mean that fortunes and holdings are passed down to offspring, along with the availability of the finest in education and business or other contacts and advantages... or do we mean that the same actual genetic material causes them to have the same 'temperament' about holding wealth and power?


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RE: Rent seeking

Think of them as a master race of fine, upstanding wealthy people who deserve to rule the economy because of their superior linage.

Like, say, the Hapsburg dynasty.


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RE: Rent seeking

Well, I certainly wouldn't hold anyone up higher than anyone else... and I wouldn't say any one person is more deserving than another, either.

But that's just basic christianity 101.

I'm reminded of the so-called Aryan superiority...

No, I don't think that sort of genetics plays any role... I mean, c'mon... look at the Paris Hiltons of the jet set as example. ;-)

But seriously... if anything, it could be a genetic mutation in the way things are processed within the brain...


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RE: Rent seeking

"We haven't touched on his contention that a significant portion of economic success is genetically inherited."

I had forgotten the other reason that I didn't feel like debating the topic: You've already reached the conclusion. You're just looking for the premises to justify it.

I'm pretty sure you have very intelligent kids.

You ever wonder why that is so? The good air up there in Colorado? The local school system you're always raving about?

Here's a hint.

You want to deny that?

I finally came across an old article in the NYT that really impressed me years ago.

"The need to achieve, including ambition and an inclination to work hard toward goals, also was found to be genetically influenced..."

One more, just in case you need it.

"Heritabilities range from about 40% to 50% for personality, vocational interests, scholastic achievement and general intelligence... "

Jodi, did you even bother to glance at the 1% article? Why don't you tell us what the author REALLY did say. IN CONTEXT.

Hay


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RE: Rent seeking

Schizophrenia, bi-polar disease, and other mental illnesses have a genetic, inheritable component.

Intelligence as well, but thats not as well defined - A lot of smart people who come from not particularly bright families, and visa versa. You get into pre-natal, infant nutrition, exposure to stimulation at a very early age, and so on.

But this article assumes that outstanding financial success is very highly correlated with superior intelligence - and I don't see any data anywhere on, say, the average IQ of the American CEO. That most of them went to private prep schools, vacationed in Europe every summer, went to an Ivy League and got MBA's in prestigious schools and walked into very lucrative starting positions via family connections, sure. And while that might require slightly above average intelligence not to screw up, it doesn't necessarily mean they're all geniuses.

And as this thread is about rent seeking, IOW what they can get away with, where is the comparison with the Average IQ of a German or French or Japanese CEO who makes 5% of an American CEO's annual salary?

Or compare 'em the IQ of the computer geeks and engineers who actually run their business - say design and run the internet-based inventory system at Walmart so that each truck leaving the warehouses has a packing list for the stores they restock - vs the IQ of the billionaire Walmart heirs.

And there are an awful lot of really dumb CEO's who make millions - as Detroit packs it in, brings to mind GM and Roger Smith, and it doesn't take a lot of effort to come up with a lengthy list of mega-millionare CEO's who made really stupid, dumb moves and mistakes that cost their shareholders billions. And were paid very handsomely, tens of millions, including generous golden parachutes, as they did so.

Not to mention the corporate leadership so incompetent that they don't recognize that they're about to bring down the world economic system, the ones who head up the banks - who don't even know that they're holding billions of dollars worth of trash, not to mention the ones willing and knowingly selling them the trash.

So now maybe the CEO IQ comparison would be best done with expert con men.


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RE: Rent seeking

As I see it, a lot has to do with advantage and entitlements. With money comes power... the ability to influence others.

I've never seen anything on the IQ's of corporate heads, either... as it pertains to any higher numbers or higher intelligence. I don't believe that to be a factor, whatsoever.

Look at some of the idiotic things that come out of the mouths of some of those with advantage and money... not all of it could be said to belong to someone with an exceptionally high IQ... that's for sure!


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RE: Rent seeking

Tsk tsk I just don't know how those people got where they were being so stupid!

I know someone that is a friend of a Walton family member.
I'll be sure to pass along what has been said of their IQ.
NOT.

But if I did pass it along, do you think they would care?
Does anyone else care what anyone on this forum speculates about their IQ?

People in the business world aren't impressed with just intelligence quotient numbers. They want something behind it.

They would include a very strong work ethic (knocks out a lot of people right there) determination, confidence, talent, foresight, discernment, and other attributes.

At least most successful CEOs are smart enough not to spend their Friday nights sitting around on a forum trashing the intelligence and integrity of strangers only because they are financially successful and suggesting they only got where they were and only stay there because of connections and birth.

Apparently green is the feel good color of the moment.


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RE: Rent seeking

You are so right Demi. How can people doubt the intelligence of all of these wealthy people that inherited their money? Heck, just look at Paris Hilton. She has an abnormally high work ethic. Right?


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RE: Rent seeking

Posted by frank_il z5Illinois (My Page) on
Sat, Jul 20, 13 at 0:16

You are so right Demi. How can people doubt the intelligence of all of these wealthy people that inherited their money? Heck, just look at Paris Hilton. She has an abnormally high work ethic. Right?

*

Maybe, maybe not.

But she's smart enough to manipulate some very smart people into giving her the ability to parlay very little talent, if any, into a lot more money.

She's smart enough to use what talents she has--how little that may be, to generate money of her own.

If only others were that smart!


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RE: Rent seeking

"She's smart enough to use what talents she has"

You do know how she acquired that fame originally, don't you?


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RE: Rent seeking

So, that's how it works... it takes high IQ to be born into wealth and stand in line waiting for it to be passed down... who knew?


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RE: Rent seeking

"Yet the issue cannot be settled so easily, because the intergenerational transmission of income has many causes beyond unequal opportunity. In particular, parents and children share genes, a fact that would lead to intergenerational persistence in income even in a world of equal opportunities. IQ, for example, has been widely studied, and it has a large degree of heritability. Smart parents are more likely to have smart children, and their greater intelligence will be reflected, on average, in higher incomes. Of course, IQ is only one dimension of talent, but it is easy to believe that other dimensions, such as self-control, ability to focus, and interpersonal skills, have a degree of genetic heritability as well. This is not to say that we live in a world of genetic determinism, for surely we do not.

But it would be a mistake to go to the other extreme and presume no genetic transmission of economic outcomes. A recent survey of the small but growing field of genoeconomics by Benjamin et al. (2012) reports, “Twin studies suggest that economic outcomes and preferences, once corrected for measurement error, appear to be about as heritable as many medical conditions and personality traits.” Similarly, in his study of the life outcomes of adopted children, Sacerdote (2007) writes, “While educational attainment and income are frequently the focus of economic studies, these are among the outcomes least affected by differences in family environment.”

Hay


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RE: Rent seeking

I won't argue with that, Hay. I just don't see the connection between high intelligence and being a CEO reimbursed well beyond any reasonable measure.

Again, I'm not talking about the people who create stuff like Apple, Microsoft, Paypal, Google, Tesla electric cars - these are the models of how capitalism is successful. They take huge risks. If their new product is successful, they make lots of money. And society has the better for it. For the sake of argument, lets call them "true capitalists'.

Then we have CEO's who had nothing to do with the creation of the company, they're there to create more wealth for their share holders. Which they do by cutting salaries and benefits for their workforce, fire older more expensive workers, move manufacturing overseas, what ever. Its these guys we're talking about with 'rent seeking'. They don't risk anything. They get wonderful contracts with all sorts of pensions and buyout guarantees and nobody can justify just what they do to earn these ridiculous salaries, except by way of comparison - well, that other company pays their guy as much, so thats why we have to pay this to our guy.

And I sure don't see how inherited intelligence comes into play with this. If wee Master Rory Gates, you know, Bill and Melinda's kid, goes off and starts a new, wildly successful company, well there ya go, we agree.

But how does that translate to the CEO of Safeway, whose claim to fame is fending off a union while closing 38 stores, and getting paid $15 million to do so?


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RE: Rent seeking

Posted by frank_il z5Illinois (My Page) on
Sat, Jul 20, 13 at 0:40

"She's smart enough to use what talents she has"

You do know how she acquired that fame originally, don't you?

*

Yea, I think she had sex and it was recorded on videotape.
I imagine a lot of people have done that

Not just anyone can use that to manipulate people into asking her to endorse products, garner invitations to exclusive events,
become a sought after guest and have their own television show. It may not be positive attention in the eyes of some of us--certainly not mine--but she is smart enough to make her OWN money, and do it legally.


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RE: Rent seeking

I'd love to meet your wife someday, Dave. She must be super, super smart. I mean SUPER. Your kids are super smart and your son, at least, is super funny.

Genetics? I can see it.

Drum roll.....

"I won't argue with that, Hay."

But you did!!!

And got Jodi and Frank in an uproar in the process.

Gotta run.

Hay


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RE: Rent seeking

Maybe when you come back, you can connect why the CEO of Albertsons Grocery stores should be paid $12 million a year.

And what that has to do with inherited intelligence.


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RE: Rent seeking

Posted by david52 z5CO (My Page) on
Sat, Jul 20, 13 at 10:51

Maybe when you come back, you can connect why the CEO of Albertsons Grocery stores should be paid $12 million a year.

*

I'm not Hay, but I happen to think it's no one's place to explain or justify the CEO of Albertson's Grocery store salary to you or anyone else.

FWIW, over thirty years ago my cousin worked at Albertsons as a bagger while in high school.

He worked very hard, left his home town and transferred all over the country when given promotions and opportunities, and while I do not recall his exactly position with Albertsons, he was able to comfortably retire in his forties.

I am proud of him.
Obviously, Albertsons was proud of him and felt his contributions warranted his paycheck.

The day that companies are prevented from compensating people what THEY think they are worth and forced to redistributing wealth in their company per government mandate, that is the day that innovation and hard work start the descent from which there is no return.

There simply is no incentive to work hard and not be compensated, only to see the fruits of your labor handed to someone else that did not make the sacrifice, do not possess the talents, and do not work as hard.

This does not mean not sharing, it means why should wealth be redistributed because someone wants a cell phone and a computer and can't afford it?

This post was edited by demifloyd on Sat, Jul 20, 13 at 13:23


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RE: Rent seeking

Demi-if what you say is true then most of the people in European countries would be sitting on their keisters waiting for the next handout but they don't-they go to work and work hard. Strange isn't it?
You worry a lot about the capitalist working hard and not getting compensated for his work but how about all the worker bees who have to be working hard and not getting compensated for the CEO to make 15 million dollars because where else would the money come from?


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RE: Rent seeking

It would be fascinating to know your personal background and what you do for a living, Demi. And what your father/mother did. No, I'm definitely not asking, just saying it would probably shed some light on your very one-sided viewpoints, which I find absolutely puzzling.


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RE: Rent seeking

i am a capitalist and I firmly believe that the profits of a company should adequately compensate all the employees that contribute to that success.

I do NOT mean equally . There needs to be significant differences in pay based on the complexity and significance of contribution.

However, what has happened is that rewards are being shared at totally disproportionate levels in some large corporations.

In my view it has become a serious issue that will cost the tax payer and society much.


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RE: Rent seeking

It will cost everyone in the end... money might be nice, but you can't eat it.


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RE: Rent seeking

See, whats fun here is that nobody has yet been able to give a justification of why the CEO of a company should be given some guaranteed mega-wealth contract just to show up. It doesn't matter if they help the company or hurt the company, they still walk off with millions.

The answer is none of your business, why do you care, blah blah. There is no explanation of: gee, they took risks, they should be rewarded. They never took any risks. Their ideas built the company. No, they walked into an existing company at the top floor.

What you get, and nobody has even bothered to put this one forward, is that So-and-So restructured the company, laid off the most expensive workers, busted the union, moved production overseas, and increased the profits for the shareholders. Ok, I can see that. If the mega-compensation comes after they've done their magic. Because of your wonderful new management ideas, the company became 30% more efficient, after you took the helm, then sure, paying that guy 20 million is worth it.

But how about when he retires, and the next guy walks in, fresh faced and ready to go. Should he be paid 22 million because the guy before him was paid 20 million?

They still get paid megabucks if what they tried didn't work and didn't increase profits and they end up losing money for the shareholders. They still walk away with millions.

When it comes to the concept of rent seeking, we have the examples of all these highly successful European, Japanese, Korean, etc companies engaged in the same business who pay their CEO's far, far less to do the same thing.


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RE: Rent seeking

It is a fallacy that the execs of large corporations are taking personal risks.

Very few have their salary tied to results...bonuses maybe, maybe not. No matter how the company does they get the big paycheck and if it is so bad they are fired...then there is most often a golden parachute.

I cannot tell you how many time I have seen an exec demand certain results even in the face of concrete arguments as to why that may not be attainable. Demand it and then when it fails they penalize the guy below them.....nothing is ever their fault. They claim only the successes.

I have also worked for some very good, execs who truly cared about the company and the employees....but that was a while ago.

.


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RE: Rent seeking

This isn't the question, Demi. The question is "how much?" At what point will some people who fairly worship the ground these businessMEN walk on decide that enough is enough? They have pushed compensation to themselves to heights not even thought of only a few decades ago. I consider it a mental illness, akin to narcissism. This is the only way I can possibly understand the gigantic imbalance.

I think I have shared this story before but here it is again.....I am sorry if I have shared it before but it fits this discussion. It makes you wonder how much is enough? When do people get numb to the point that it is only about themselves?

I was in a budget meeting 20 years ago and the salary increase time was discussed. It was budgeted to not give raises that quarter because after bonus to us there was not enough to give salary increases. The President at that time said forgo his bonus and give the increases to the cafeteria workers and he would look into what could be done to give the rest of the staff increases.

He looked around the room and I knew he was looking for support from others to forgo their bonus. Some stepped up others mumbled and said they had spent their bonus already and could not give it up. All the hourly staff received no less than a 3% raise that year.

I will remember that action the rest of my time working. I wonder how many CEO's think to give up their bonus to ensure the lowest paid get incentive for their work. He was willing to give up his 20 thousand bonus to ensure the minimum wage earners did not suffer at the expense of greed on his part. But although religion was forbidden to be discussed in the work place the things he said would slip and it made me understand he would think as because of hi belief he could not be comfortable seeing the lest suffer when he had so much.


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RE: Rent seeking

Posted by sjerin 10 (My Page) on
Sat, Jul 20, 13 at 13:30

It would be fascinating to know your personal background and what you do for a living, Demi. And what your father/mother did. No, I'm definitely not asking, just saying it would probably shed some light on your very one-sided viewpoints, which I find absolutely puzzling.

*

It is not fascinating I can assure you.

My father came from a extremely poor family, he was left alone as a child because his mother left his dad because he would not allow her to leave the house he was very jealous and much older, she was forced to marry him at age 14 by her stepmother so there would be one less mouth to feed. He was the youngest of three children, the only one to make it past age 5. He was forced by his new stepfather to quit high school to lay floors to bring home money. He met my mom working at an industrial company, she was a secretary, and she was an only child and her father was a painter. Her mother was a telephone operator and worked almost all of her life. Nobody had any money.

My parents got married while he was in the service at 19 and 20 and she saved up pennies to walk three miles in the snow to buy a pork chop for him. When they got married at the chapel on base, he gave his last few dollars to the guy that played the organ and they had no more money until pay day. Someone on base gave them a case of what was then Sugar Pops and they lived on that for about two weeks until pay day. Dad got his GED while in the army and then worked at a job and at night went to business school. He eventually got a job as a traveling salesman and after years, started his own small company selling the supplies that he sold as a salesman. It was successful but he never got rich, we always had to watch money. Mom never worked after she joined him at the army base to marry him there.

I grew up in a small town where most people were poor, although there was a family we considered wealthy that owned a timber company. We had more than most because we had a new ranch style house we built on land purchased from my mother's uncle. I was able to take piano and dance lessons and my grandmother sewed or bought clothes, but things were often tight.

I was valedictorian of my class and the first person in my family to go to college. I had a very strong sense of justice and wanted to get into criminal justice, and was the first person to obtain that degree at the university I attended, it was a new degree they offered. Most people I know got married and went to work right out of school and married their high school sweethearts. I worked as an investigator for an attorney and then for the Internal Revenue Service, than was asked to come to work for the U.S. Department of Justice as a paralegal and investigator.

Later, I worked for a private law firm as an investigator and a paralegal both in family and criminal law and in real estate and estate planning.

I had intentions of going to law school but wanted to work for awhile, then after getting married and immediately transferring, it became more problematic logistically. My older daughter now is still trying to get me to pack up and go to law school but I have nothing to prove and my opinion is the last thing the world needs is another lawyer, even if it is one that would do primarily pro bono work.

I came from a good family, no money, that worked hard and was responsible, taught me right from wrong but to always treat everyone well, and I do not know exactly where that very strong sense of independence and personal responsibility came from but it is there and has been there since I was a baby, according to my mother I would say no and knock her hand away when she tried to do something for me.

I do not know where they came from but if anyone knows anything about astrology they can no doubt guess my sign, and I think that explains a lot.

I have always had an innate sense of independence and justice and doing the right thing and very little patience with people that complained about life and didn't buck up and deal with whatever happened to be on their plate.

That may sound uncaring to you and others, and I'm sure my stances do sometimes, but it's actually tough love. I believe that people should live their lives to the fullest of their potential and if they do not, they others should not have to compensate for the failure to do that. I believe in compassion, but not handouts.

So, this turned out to be way more than asked and no doubt more than anyone wants to know, but no, I did not come from money, only hard working rural people with hard times like a lot of other people. I am not a snob. Money is not important to me other than for security and it frightens me that the government may take so much one day that I am dependent on the government or someone else in my old age, especially since we planned to care for ourselves without dependence.

As to the future I may or may not get another degree or work or I may continue to stay busy doing for others and caring for this property, which I love dearly and requires a lot of time, effort and expense. I love sharing it with other people, friends and family alike. Whatever I do will not be for money but will enhance the lives of others, like help the elderly with legal issues or perhaps get back into working with juveniles, especially teaching them responsibility and life skills in the preteen years.

Whatever it is I no doubt will always believe in independence, sacrifice, doing the right thing, and being personally responsible.


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RE: Rent seeking

The problem is, no one is independent of everyone else... the success of one is inextricably tied to many others. It is a community effort, a social effort. No one is an island unto himself. It has nothing to do with "personal responsibility".


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RE: Rent seeking

Posted by jodik 5 (My Page) on
Sat, Jul 20, 13 at 16:24

The problem is, no one is independent of everyone else... the success of one is inextricably tied to many others. It is a community effort, a social effort. No one is an island unto himself. It has nothing to do with "personal responsibility".

*

There is no problem.

Of course we are intertwined, to a degree.

There are people that live in the woods by themselves and they are not dependent at all, so that is not true of everyone.

Lives being intertwined does not preclude being personally responsible--taking care of one's own needs in life without depending on the government--taxpayers, to do for a person what that person is capable of doing themselves but does not.


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RE: Rent seeking

See, whats fun here is that nobody has yet been able to give a justification of why the CEO of a company should be given some guaranteed mega-wealth contract just to show up.

I couldn't justify it if my life depended on it.

There is a huge conflict however between the notions of personal responsibility and social responsibility. The goal of a CEO who is operating under the influence of personal responsibility is to make as much money as possible for himself and his shareholders. The goal of a CEO who is operating under the influence of social responsibility understands that the people who work for him ARE the corporation, as much so as any shareholder, and, like Marquest's boss, wants to make sure that they are as happy and well treated as he can make them. His goal is not to make as much money as possible but to make sure that the tide raises all the boats out there.


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RE: Rent seeking

There is a huge conflict however between the notions of personal responsibility and social responsibility.

And that's it in a nutshell.

As far as the government dictating what business shall pay or how they operate -- that' already been established as minimum wage laws, pollution controls, zoning laws, workplace safety, equitable treatment re profit-sharing plans, etc.

The community has every right to question how a business operates and whether it's just extracting all the money it can rather than being concerned with the general welfare of the residents (and acting on it).


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RE: Rent seeking

I am a capitalist and have no problem with whatever salary a company wants to pay its CEO UNLESS they are paying them that at the sacrifice of the employees. It used to be all the employees benefited from the company being very successful. Companies like Walmart are the perfect example of that no longer happening. Screw the lower level employees. Obviously, they haven't shown "personal responsibility" or they wouldn't have to work that low level job. Like I said, must be nice to have that "personal responsibility" card in your back pocket to pull out when needed so one doesn't need to care about those lower level employees. I am missing that card. And thankful I am.

As people have repeatedly pointed out, someone has to do those low level jobs. Not paying them a wage they can live on without government help, and people thinking that's ok, is self defeating.


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RE: Rent seeking

Everyone believes in doing the right thing. Im a huge champion of doing the right thing.

But " the right thing" along with "truth" is almost always in the eyes of the beholder.

Its like the person who proudly proclaims to always be truthful, even though it hurts.

What that person imo often misses is that it is THEIR truth....the truth *according to their own perception of the truth in that given situation.*

Which just ends up making that person rude when handing out " the truth" in a lot of instances.

Don't misunderstand, Im not referring to you in any way about the proposed " truth teller", heck, I would imagine we all have known someone at some point who was proud of their truth telling ability which was, unknown to them, to be regarded as a rude and pompous side to their nature - Im just giving that as a "for instance".

Probably most people, despite the vast differences of opinions, see and highly value within themselves just those traits you do in yourself. Maybe some you think are distinctly lacking, and vice versa, because everyone's perceptions of what equals those traits might be a little, or a lot different.

But certainly everyone Ive ever known have felt those same values to be a great part of who they are, in a positive way. Because of that, at least in this forum its a shame that the majority of us have been unable to meet in the middle at least half the time. Some never will or are simply unable to for various reasons or shortcomings, but I do feel most of us easily have that ability - but not for the tiresome oneupmanship in direction which these threads take.

Maybe that is not the function intended by the set up of this specific forum?

These days, I have a greater understanding of why KT left for good.


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RE: Rent seeking

You've all reached your conclusion: Therefore the rich are bad and undeserving of their wealth and so it's OK that we take it from them.

You just need the premises.

"See, whats fun here is that nobody has yet been able to give a justification of why the CEO of a company should be given some guaranteed mega-wealth contract just to show up."

What nonsense! You want someone to respond to THAT?

Somehow, without the great natural resources of some countries like CANADA, the United States manages to produce a disproportionate amount of GDP (Gross Domestic Product) PER CAPITA. How does that happen? Our superior workforce? I doubt it.

Check it out: GDP per Capita by country

Many of the high numbers can be explained by lots of natural resources.

Many of the highest got that way by becoming capitalist leaning financial centers with economic freedom.

United States:$50,000
Germany: $40,000
France:$36,000
United Kingdom:$36,000
Japan:$35,000
European Union:$33,000
South Korea:$33,000
Portugal: $25,000
Greece:$25,000
Venezuela:$13,000
World:$12,000
China:$9,000

All those cheap CEO's in the European Union make only $33,000 worth of product per capita when the US CEO's manage to produce $50,000? Is that what's going on? I'm asking. The World CEO's manage about $12,000.

I'm asking.


Hay


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RE: Rent seeking

i am a capitalist and I firmly believe that the profits of a company should adequately compensate all the employees that contribute to that success."

Chase is a capitalist? Not if you read the rest of the sentence. Your funny son has competition, Dave.

"Capitalism is an economic system in which capital assets are privately owned and items are brought to market for profit. In a capitalist economy, the parties to a transaction determine the prices at which assets, goods, and services are exchanged."

Hay is a Communist infiltrator.

Hay


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RE: Rent seeking

I'm going to be getting very busy for the rest of the Summer, so I can't be spending much more time running around for you, Dave. Getting to the end of my participation... Enjoy it.

The Albertsons CEO?

Here's one of those little "Thought Experiments" for you to contemplate. Suppose Albertsons decided to toss their overpaid, $12 million dollar CEO, and replace him with a few of you instead. Dave, Frank, Jodi, jillinng, chase, nancy.... Pick your best 12 and pay them a million dollars each. Funny, huh? I agree; I'd love to see it.

The best 12 of you or 1 of these:

"Albertson's CEO (2006-)
Rite Aid CEO (1999-2003)
Kroger Vice Chairman and COO (1999)
Fred Meyer Stores CEO (1991-99)
Albertson's EVP Retail Operations (1989-91)
Albertson's Senior VP and Regional Manager (1985-89)
Member of the Board of Harrah's Entertainment
Member of the Board of Nordstrom (2005-)
Member of the Board of PacifiCorp
Member of the Board of Pathmark Stores
Member of the Board of Rite Aid (1999-, as Chairman 1999-2007, continuing)
Member of the Board of Wild Oats Markets, Inc. (2004-06)"

Here's the company your're all so qualified to manage so cheaply. Read about your day to day life.

"In 2004, Albertsons acquired Shaw's Supermarkets and Star Market Company from Sainsbury's for $2.5 billion."

Just curious, which one of you would have managed this transaction?

Bye.

Hay


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RE: Rent seeking

OMGosh, Hay, I am ROTF.

Distillation at it's best.


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RE: Rent seeking

I'd do like they all do and hire a Wall Street bank or brokerage house with a decent Mergers and Acquisition department.

Edited to add a question: why does a PerCapita income thats 30% higher translate into CEO salaries that are 1500% higher?

This post was edited by david52 on Sun, Jul 21, 13 at 13:12


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RE: Rent seeking

Therein lies the rub, Jill... it's at the sacrifice of the workers.

How is it in any way ethical or moral to force the workers to live at or below a poverty level, while at the same time extracting hundreds or thousands percent more than that amount for themselves, while offering the consumer a sub-par item?

How in the world can one justify such a thing? There is no justification, as far as I can tell.


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RE: Rent seeking

"The rich are bad and undeserving of their wealth and so it's ok if we take it from them."

Im waiting for my Mr.to quit fiddling around ( while doing a favor for ME haha) so we can leave so I cant go back to read the whole thread, but anyone here who said those words sure as heck don't speak for me.

I have nothing against the rich. I wish I were rich, if I were rich I would buy a perfectly beautiful small lot in order to be able to build my perfectly beautiful ( small) house to my specifications ( huge baseboards, gorgeous crown molding, molding of all sorts with closet space and a master bath three times the size as the one I have but still in a small house, (considering what it would cost me per sq foot) and I would hire a pro to help me design beautiful landscaping and flowers for cutting on that small lot.

Id travel to a few of the places I not yet have been and would like to see ( hello Ireland and Scotland) and love it all without the tiniest squeak of guilt at my great fortune because along with enjoying the wealth for us, then I would also do my most basic human duty as a person and especially one of wealth- to those who are in desperate need, without whining about how they refuse to help themselves. A charitable wallet without sticky tape or judgements on who in my opinion were or were not deserving of help in the circumstances they are in. Because if Im full of judgement, I might as well keep the charity as its really more entertainment money than a freely given help to those who are in need.

In truth I would probably keep the assistance certainly anonymous and more probably within this state, perhaps sticking to the same charities at I have had to narrowly stick to in all the years I have been not rich, which has been all my years.
Though never having had the kind of income where a professional adviser was part of my staff because 'staff' in this house was the children and adults living in the home, dwindling to the two of us and because of his back, now Im the merry maid - but I would indulge myself by hiring out that which I no longer want to do myself, paying a decent living wage and into social security, and hire someone to help us figure out the best way to directly improve the greatest numbers of individuals in my local area - improve in a way both those in need and the two of us could see and directly, on a daily basis.

So, I sure as heck would not look with disdain upon any 'rich' person, nor for the comforts of life they are able to enjoy because of their richness. What's to judge?
They can afford a life of comfort as well as pay a living wage as well as help make profound differences in the lives of some of the poor. What's not to like?

With 'rich' kind of money comes with an additional greater obligation imo, especially to those who are hired to help that 'richness' hit the bank. A decent wage, while keeping the money flow within a reasonable rate for everyone would be a great start, if the money came from a company I started or bought.
Id love to be rich because of what it could and should do for everyone in need *including* myself, even if I wanted to live a life of extreme indulgence because I lucked into extreme income. That sort of living doesnt interest me, but if the wages I paid were honorable in the eyes of every employee and I was equally as charitable with those in need then if I chose to live a hugely indulged life because it was important to me, why not?

What's not to LOVE about that? And what the heck is bad about that?

Those people Hay quoted sure dont speak for me!


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RE: Rent seeking

Hay's example of the CEO of Albertsons being on the board of directors of so many other companies brings up again that - while the boards set the salaries, its the same people sitting on these same boards that get the exorbitant salaries.

Its like all the base ball players from around the league are sitting on all the other teams' salary committees.


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RE: Rent seeking

  • Posted by bboy USDA 8 Sunset 5 WA (My Page) on
    Sun, Jul 21, 13 at 14:25

Shhhh! Leave them alone! They're all such great guys that are looking out for everyone.

And even if they do end up leaving most of the rest of us to starve it's okay because they're all such great guys - and the rest of us deserve to starve because we aren't such great guys as they are.


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