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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Metacomet who wrote (17117)	4/25/2006 5:07:53 PM
From: TimF	Respond to of 542941

Not silly at all. It is true. Its much less silly than claiming the government policy on taxation, health care, and housing determines the compensation from work or capital investment. Sure such things have an effect at the margin, and for specific jobs or investments the effect might be decisive, but government doesn't cause corporate executives, or top entertainers and athletes to make hundreds, thousands or tens of thousands of times what someone on minium wage makes. Jack up the tax rate on high incomes to 60% and double the minium wage and you still have an enormous gap, while in the mean time you will have put a lot of people out of work.

To: Metacomet who wrote (17117)	4/28/2006 5:44:53 PM
From: TimF	Respond to of 542941

I suppose there is an infinitismal supply of CEO types willing to work for 200 times the average pay of their employees. Sure there is a large supply of people willing to work for 200 times the average pay. But there is a small supply of people that the companies would be willing to pay so much to. If an executive actually is more effective than average then if he is in charge of a large company he can increase its profitability by far more than 200 times the average employee income. Assuming that people with the talents to be very good executives can be identified than it is highly predictable that market forces would tend to cause those people to be very highly compensated. Which doesn't mean that companies do not often get it wrong, but if the executive is perceived as being very good market forces will give him high compensation even if he isn't very good. His lack of eventual performance is not a sign that supply and demand is not relevant merely a sign that the demand was based on inaccurate information, just as when any number of high priced athletes fail to perform up to expectations when they get a fat contract. There is the additional concern that executives have to much control over their own wages. That may be true but its a special case for top executives and not something that applies to wealthy people in general. Its also something I've already addressed in other posts. Tim