What level of disparity should be allowed by the market?

[MaggieD]

Re: CEO vs Neurosurgeon

Hmm. Seems to me, based upon you not being willing to give an answer to that question, you do believe that there is some point when income disparity becomes rediculous. Now we just need to figure out what that point is.

I gave you a Like because it was such a nice try.

 

[imagep]

Re: CEO vs Neurosurgeon

I don't have a doubt in my mind that the income inequality in this country is going to continue to grow. The market will survive but American society won't. We're going to transition to something like Brazil.

What is "something like Brazil". I know nothing about Brazil.

 

[pdog]

Re: CEO vs Neurosurgeon

But workers at McDonald's don't make a dollar an hour. And the manager doesn't make a million dollars an hour.

Fail.

He's not pushing your buttons - he's simply pushing your belief to the absolute of an ever balanced market. From your previous answers, I'd say an acceptable answer from you would be "yes, if that's what the market bears." Do that, there's nothing left to argue. But waver, and it is worth exploring. See what I'm saying. Everybody should let their guard down a little. I'm genuinely interested in not letting this turn into the 399th class warfare thread. Just trying to understand the core of people's beliefs. You believe that everybody should get what they set out to make, and that's fine. What's not so obvious to me is WHY do you believe that. Not in a long philosophical sense - just the core certainty that holds it all together. I'm running with "the market" since it seems to be somewhat immune to the usual poison that seems to get everybody's hackles up.

 

[pdog]

Re: CEO vs Neurosurgeon

I gave you a Like because it was such a nice try.

Common, give it a shot. Lets see how far this rabbit hole goes .

 

[RiverDad]

Please explain. If pay is determined by the market, wouldn't corruption be an INPUT into the market, and not something sitting on top of it? If not doesn't that mean that a CEO is NOT collecting the market rate and is instead earning something he's not entitled to?

Look at the thread I started today about an attack on inequality that I support. Google and other high tech firms colluded amongst themselves to not hire employees away from each other. This severely distorted the labor market. The market worked well, but there were corrupt actors who were distorting what was going on.

The same thing is happening with CEO pay packages. There is a group of interlilnked board members who all scratch each other's backs and boost each other's pay.

What CEOs get paid is not society's business and I don't understand why you have a bee in your bonnet about this. The pay that they get doesn't influence you at all. It has no impact on you. They're taking money from the shareholders. It's the shareholders who should be upset.

This is my thread . If you'd like to enlighten me, please be my guest. Ideally it should support your poll answer. But I'm not sure how you're going to break apart immigration from a perfect market. It seems like you're trying to say the market cannot be out of balance and then say that immigration has knocked it out of balance.

If the pay disparity between a CEO and his workers was 40x and today it's 400x, a good part of that disparity arises from the fact that the average skill of the worker is valued less in the market today than it was in the past and that's due to the lower social capital of the worker. If we import a low skill worker from rural Mexico then simply breathing American air isn't going to magically make him 20x more productive, to the level of older American workers.

 

[pdog]

Re: CEO vs Neurosurgeon

I don't have a doubt in my mind that the income inequality in this country is going to continue to grow. The market will survive but American society won't. We're going to transition to something like Brazil.

Interesting. I'm not sure how to separate the two. If american society is dead, what market are we talking about? I don't want to talk about the global market. I want to talk about the market that creates the american society. Is that possible? If not what bounds do we need to set before our market is no longer recognizable?

 

[imagep]

Re: CEO vs Neurosurgeon

I don't believe that the market values everything perfectly, and I do believe that when the market creates malvaluations, that it harms our economy, and our creation of wealth.

Nothing is perfect, and anything can be fine tuned to make it better.

If the market was perfect, then scammers would never be able to perpetuate their scams. If the market was perfect, then people like G. Richard “Rick” Wagoner Jr. would never have received huge pay raises and bonuses for running GM into the ground, year after year after year. If the market was perfect, then money managers would never be paid millions of dollars a year to run funds that have a less than index rate return.

It's basically inconceivable to me that any one human being can be thousands or millions of times more productive than the median worker. Maybe 10 times, maybe even 40 times (which may be a stretch), but certainly not a million times. Simply put, no individual is that smart, no individual can work 8,000 hours in a day, no individual is that strong or that fast. It's distortions in our markets that create the situation where some people get paid far more than they personally produce.

These distortions are often necessary, as motivators, and thus as long as they are held in check, they are economically valuable. But only within reason. When they exceed reason, they are economically harmful.

I believe that we should establish common sense public policies that keep these market distortions in check. We can't prevent them, but we can certainly keep them restrained within reason.

 

[RiverDad]

Re: CEO vs Neurosurgeon

Interesting. I'm not sure how to separate the two. If american society is dead, what market are we talking about? I don't want to talk about the global market. I want to talk about the market that creates the american society. Is that possible? If not what bounds do we need to set before our market is no longer recognizable?

America as a nation can continue, but the society we know today will be radically different in the tomorrow. More inequality, more racial strife, more racial segregation, more walled communities. Rich people in Brazil are commuting by helicopters these days in order to avoid the masses of poor people and to lower their risk of being kidnapped. That's America's future.

You need to take your lessons from other laboratories, other societies. Plenty of liberals point to the Scandinavians as great role models. They love their social system, their tax system and their culture of equality. What they want to ignore is the high levels of racial and ethnic and religious homogeneity. Liberals in the US have ****ed us but good with their crazy love-affair with racial diversity. Multiculturalism is like an acid when applied to a society - it destroys society.

 

[imagep]

...

The same thing is happening with CEO pay packages. There is a group of interlilnked board members who all scratch each other's backs and boost each other's pay....

If nothing else, I agree 100% with the part I quoted above. That's EXACTLY why many CEO's get overpaid.

 

[pdog]

Look at the thread I started today about an attack on inequality that I support. Google and other high tech firms colluded amongst themselves to not hire employees away from each other. This severely distorted the labor market. The market worked well, but there were corrupt actors who were distorting what was going on.

The same thing is happening with CEO pay packages. There is a group of interlilnked board members who all scratch each other's backs and boost each other's pay.

I'm getting mixed signals here. For somebody that talks about a working market, you sure do point out a lot of flaws in the calculations. Aren't these people simply acquiring what the market offers them? If not, are you not saying that something is wrong and needs to be corrected.

What CEOs get paid is not society's business and I don't understand why you have a bee in your bonnet about this. The pay that they get doesn't influence you at all. It has no impact on you. They're taking money from the shareholders. It's the shareholders who should be upset.

For me it's not that simple, but I'm trying to understand the viewpoint of those who think it is. My bee seems to be bothering you as much as it is me. Frankly, I think you're quite conflicted on this. For somebody that thinks the market is fine, you do see quite eager to fix it.

If the pay disparity between a CEO and his workers was 40x and today it's 400x, a good part of that disparity arises from the fact that the average skill of the worker is valued less in the market today than it was in the past and that's due to the lower social capital of the worker. If we import a low skill worker from rural Mexico then simply breathing American air isn't going to magically make him 20x more productive, to the level of older American workers.

I'm not sure I buy that. I'll entertain the notion that immigration lowers wages, but you'd be hard pressed to tell me that higher wages is purely a numbers game from diluted stock.

 

[pdog]

Re: CEO vs Neurosurgeon

America as a nation can continue, but the society we know today will be radically different in the tomorrow. More inequality, more racial strife, more racial segregation, more walled communities. Rich people in Brazil are commuting by helicopters these days in order to avoid the masses of poor people and to lower their risk of being kidnapped. That's America's future.

So this should be allowed? For the sake of what? Saying we didn't mess with the market?

 

[Henrin]

People get paid whatever those that hire them are willing to pay them. I do not agree with any suggestions to resolve this problem that would have to involve forcing people to pay workers more or less than they desire to pay them. Sorry, but violating the rights of employers is not acceptable.

 

[Henrin]

If nothing else, I agree 100% with the part I quoted above. That's EXACTLY why many CEO's get overpaid.

There is no such thing as getting underpaid or overpaid.

 

[imagep]

Re: CEO vs Neurosurgeon

So this should be allowed? For the sake of what? Saying we didn't mess with the market?

Nope, it should not be allowed. Humans are the only animals on earth that have the ability to significantly modify our environment. I'm not a religious person, but I do believe that God (mother nature, Alla, or what ever you want to call him/her/it) gave us this ability for a reason. It is within our ability to create the world which we desire to live in. I desire to live in a world where human discomfort is minimized, this I desire to have an economy and social system which results in minimum human suffering.

Every successful entity is managed in some way. No business can succeed without a manager. I really don't understand why people believe that our economy and society should not also be managed and directed and molded.

 

[RiverDad]

Re: CEO vs Neurosurgeon

Nothing is perfect, and anything can be fine tuned to make it better.

The market can be described in another way - the wisdom of crowds. Your fine tuning amounts to the wisdom of Obama or the wisdom of RiverDad. Pick someone - whatever wisdom they have is going to be rejected by someone else, but unlike with the wisdom of crowds this person's wisdom is going to be shoved down the throats of anyone without them having a say about it.

If the market was perfect, then scammers would never be able to perpetuate their scams.

If our legal system was perfect, then no crimes would be committed and go unsolved. Our legal system is not perfect. Crime are committed and remain unsolved. Does this mean that the legal system can be improved by instituting a Judge Dredd program where the cops become cop, prosecutor, judge and executioner? That will certainly solve some problems but how about the people who are opposed to that concentration of power. Our legal system is like a marketplace in that it distributes power through many channels, a Judge Dredd program concentrates it all onto one person and if he makes a wrong call then everyone is screwed.

If the market was perfect, then people like G. Richard “Rick” Wagoner Jr. would never have received huge pay raises and bonuses for running GM into the ground, year after year after year.

A mother loves her children. She has a soft heart. She loves her children so much that she hates to see them be upset. They want to eat candy for dinner every night. She loves them so much that she serves them candy every night. They have heart attacks and die as obese whales at the age of 20.

No one is questioning that the mother loved her children, what's at issue is how she expressed her love.

Market success is not synonymous with "making the right decisions." People who lose their shirts are an integral part of a functioning market. People make the wrong calls all the time. Some people think a mother's love is expressed by serving candy for dinner, others believe that a mother's love is best expressed by serving a balanced meal to children. Both sides are showing love, but only one side is the winner.

If the market was perfect, then money managers would never be paid millions of dollars a year to run funds that have a less than index rate return.

Sure they would. You just have a fundamental misunderstanding of how markets are defined. Those money managers are paid what they're paid because people are willing to pay them rather than manage their own money via an index fund or because they're willing to gamble that this year the money manager will beat the market.

It's this simple - if you decide to pay the money manager, then the money manager is getting paid fairly.

It's basically inconceivable to me that any one human being can be thousands or millions of times more productive than the median worker.

And for other people it's inconceivable that some people don't believe in God. To them his existence is self-evident. How can someone not believe?

For other people, it's inconceivable to them that some people don't like chocolate.

Simply put, no individual is that smart, no individual can work 8,000 hours in a day, no individual is that strong or that fast. It's distortions in our markets that create the situation where some people get paid far more than they personally produce.

If Kobe Bryant or Michael Jordan can entertain 10 million people who watch a game, then they're worth more money than the best neighborhood player who can entertain 20 of his friends with his basketball prowess.

Your error is to focus on what they do - Was Jordon 20 million times a better play than a good HS player? No, he wasn't. What he was was a player who could find 20 million people who were willing to watch him play and did so because he offered them something that other players couldn't.

It's not the time put in by the player, it's how many customers are willing to be entertained by the player. That's what counts.

I believe that we should establish common sense public policies that keep these market distortions in check. We can't prevent them, but we can certainly keep them restrained within reason.

Let me guess, common sense is defined as doing things the way you want them done. It doesn't matter if I object because my objecting would be going against common sense.

 

[imagep]

There is no such thing as getting underpaid or overpaid.

Bullcrap. If you and another guy were both working for the same company doing the same job to the same level of quality and production, and you discovered that the other guy was making ten times what you were making, you would feel that either you are underpaid, or that he is overpaid. You probably wouldn't go too long before you asked for a raise - or quit.

 

[Henrin]

Bullcrap. If you and another guy were both working for the same company doing the same job to the same level of quality and production, and you discovered that the other guy was making ten times what you were making, you would feel that either you are underpaid, or that he is overpaid. You probably wouldn't go too long before you asked for a raise - or quit.

No. All it would mean is that he got a better deal than I did.

 

[imagep]

Re: CEO vs Neurosurgeon

The market can be described in another way - the wisdom of crowds....

You have obviously never met the American public. I wouldn't exactly most of us as being "wise".

 

[RiverDad]

Bullcrap. If you and another guy were both working for the same company doing the same job to the same level of quality and production, and you discovered that the other guy was making ten times what you were making, you would feel that either you are underpaid, or that he is overpaid. You probably wouldn't go too long before you asked for a raise - or quit.

There is no such thing as a dragon.

Bullcrap. If you met a green creature, covered with scales, who snorted fire out of his nostrils you'd believe that there are dragons.

Look if this is your definition of being underpaid, then it's a very artificial construction for no companies operate that way. You'd either get identical pay or you'd quit. If you got identical pay then the company is not underpaying you and if you quit then you're still not underpaid and your replacement will run into the same thing. It's a very unstable scenario that you created.

On a second front, if you accepted this low wage, then you're paid what your work is worth. If the next day you change your mind and decide that your work is worth more and you get a raise, then your work is worth more. These valuations only occur at the moments where you bargain with your employer or accept an offer. When you accepted the low wage you were paid what you work was worth. The new information about a higher wage given to a coworker helps you revalue your work, but it's still worth what its worth. Only when you renegotiate does the valuation change.

 

[RiverDad]

Re: CEO vs Neurosurgeon

So this should be allowed? For the sake of what? Saying we didn't mess with the market?

I don't think it should be allowed but I can't seem to convince liberals that they're destroying society. They're like frogs being slowly boiled alive. They'll only discover the folly of their ways when they're fully cooked by the boiling water. In other words, when it's too late.

 

[brothern]

Re: CEO vs Neurosurgeon

You need to take your lessons from other laboratories, other societies. Plenty of liberals point to the Scandinavians as great role models. They love their social system, their tax system and their culture of equality. What they want to ignore is the high levels of racial and ethnic and religious homogeneity. Liberals in the US have ****ed us but good with their crazy love-affair with racial diversity. Multiculturalism is like an acid when applied to a society - it destroys society.

We need to take our lessons from other "laboratories", but multiculturalism is an acid when applied to a society ...

Riiiight. I think you need to revisit the drawing board on that one.

 

[RiverDad]

Re: CEO vs Neurosurgeon

We need to take our lessons from other "laboratories", but multiculturalism is an acid when applied to a society ...

Riiiight. I think you need to revisit the drawing board on that one.

And your mother wears combat boots.

Does my response engage your "position" in any way? I sure hope not because I'm trying to mirror your response to me. Telling me that I need to revisit the drawing board tells me NOTHING. You haven't made an argument, you've just made a statement. Your statement has zero calories.

 

[brothern]

Re: CEO vs Neurosurgeon

And your mother wears combat boots.

Does my response engage your "position" in any way? I sure hope not because I'm trying to mirror your response to me. Telling me that I need to revisit the drawing board tells me NOTHING. You haven't made an argument, you've just made a statement. Your statement has zero calories.

No, it doesn't. You've taken two conservatives memes -- one primarily used in the context of Federalism, the other stemming from anti-immigration and nationalism -- and smashed them together in a manner that is diametrically opposed. So you have a choice Mr. Conservative Philosopher: Are you going to argue for isolationism, or engaging the rest of the world?

 

[RiverDad]

Re: CEO vs Neurosurgeon

No, it doesn't. You've taken two conservatives memes -- one primarily used in the context of Federalism, the other stemming from anti-immigration and nationalism -- and smashed them together in a manner that is diametrically opposed. So you have a choice Mr. Conservative Philosopher: Are you going to argue for isolationism, or engaging the rest of the world?

I'm sure that whatever your criticism is it's more well developed in your mind than what you wrote here because I can't make sense of what your point is. There is just too much missing text/ideas for it to be a coherent response to my first comment.

 

[pdog]

Re: CEO vs Neurosurgeon

I don't think it should be allowed but I can't seem to convince liberals that they're destroying society.

Honestly I think you're struggling to have your cake and eat it too. You seem to be avoiding the posts that point it out. You talk about day to day worth simply being what it is and then go off in another direction talking about corruption and self-dealing, implying that the market is NOT in control and/or not operating at equilibrium. You say the market is working great and the talk about society crumbling as if one doesn't affect the other. These are interconnected things, if not the same thing.