by Roy W. Bakos
This short missive was written in response to a piece published in the outstanding Buffalo, NY free-press weekly, Artvoice. It can be found here: http://blogs.artvoice.com/avdaily/2013/01/15/fuck-your-gun/
An interesting take except that all folks that like the Second Amendment are not necessarily right wingnuts. I happen to be pretty left of center on most issues. I believe that the Supreme Court has been far too slow (including the Warren Court) to act regarding ensuring all of the protections of the Bill of Rights to all of our citizens. I often point out that one of the most restrictive state gun control laws was championed by Ronald Reagan (and written by Ed Meese) as a racist attempt to keep guns out of the hands of the Black Panthers (and which resulted in an explosion of illegal gun acquisitions in the inner-cities of California that continue to this day). I believe that the first and best book of American history is Howard Zinn’s, “A People’s History of the United States.” I also believe that those in power like to make sure that those that are not in power have the least amount of means to protect themselves against or take umbrage with policies or laws or encroachments upon their (the power-challenged masses) rights. All of the first 10 Amendments to the US Constitution were designed to protect us from ourselves by enumerating some important things as “rights” that cannot be abridged. In this sense, the Second Amendment is just as important as any other in the Bill of Rights.
I think that where the left and the right (or the parts of each camp that wish to) can come together is on the Constitution and the Amendments to it that have increased the amount of people that are entitled to liberty over the years (with the exception of the 18th Amendment…the only one that ever curtailed individual liberty). The Bill of Rights has continually been under attack, by both Republican and Democratic Administrations and Congresses, and these attacks are based on irrational fears masked as patriotism (the Patriot Act, the NDAA and Military Commissions Act provisions that enable habeas corpus to be suspended, etc.). The fact that, ” notwithstanding… the government could – if it wanted to –
easily take out your entire neighborhood with an unmanned drone operated by a teenager nursing a Monster Energy Drink in a dank, smelly basement in Northern Virginia[,]” should be a rallying cry across the political spectrum for all Americans to pay attention and act more vigilantly when our government acts outside of our interests.
Like it or not, the Second Amendment was put into the Constitution by the framers and the SCOTUS has interpreted it to mean that individuals have the right to arm themselves. This right, along with all of the others listed in the first 10 Amendments and filtered down to all US citizens through the 14th Amendment, can only be completely abridged by a change to the Constitution.
Reasonably regulate guns and gun ownership? Yes. Close the “gun-show” loophole? Absolutely. Require that private sales must go through a licensed broker so that background checks and the like can be accurately performed? Yes on that too. Better enforcement of laws that are already on the books which limit the 2nd Amendment? Yes. A complete ban on a type of weapon (outside of machine guns or missiles or things like that which are already banned)? No. We must be careful in how far the restrictions on our rights go, especially in times when the mass of the the public is demanding action (see Iraq War, Patriot Act, and the internment of Japanese Americans during WWII for examples of overreach here). Lets have a common sense discussion on both sides of the issue which results in an expansion of liberty rather than a contraction of it.
Alright folks, thank God it’s finally here. I can’t wait to get this election over so that we can get on with the 2016 election choices…just kidding…
The view ensconced in my safely Blue state of Maryland is normal. I live in a city with about 35,000 Democrats out of about 40ish,000 total population.
Ultimately, though, I don’t really understand what people mean when they say that this election is the most important of our lifetime or that things are going to change so drastically that life in America is going to look significantly different January 21st, 2013.
Yet, I have sincerely told my wife that if Romney is elected, we will move to her home country of Greece, yes that Greece, before his inauguration: it’s a strange dissonance inside my head.
But seriously, what really would change based on the outcome of this election? The President has continued or increased many of the foreign policy decisions of the Bush administration; those would continue under President Romney. The President will continue spending government money in ways that he feels will best help his allies and, through them, the country; while President Romney would spend government money to help his allies and, through them, the country.
Can it really come down to Supreme Court Justices? Roe v. Wade; 4th Amendment protections (which have been hollowed by Congress and the Executive over the last decade in the name of national security); 1st Amendment protections (see: above)…So it seems that this election is not about deciding who will run the country, but rather, who will referee the person running the country 15 years from now…Like I said, I hope to be in Greece by then, so what does it matter?
Today the Greek Prime Minister is meeting with leaders from the three parties that make up his coalition to discuss the details of the proposals on the table to save Greece from messy default and likely exit from the Eurozone. It seems that every week is the “most important” for the future of Greece, and that may be because no ultimate decision has been made in all of these “most important” weeks. The clock is ticking though, because Greece has to come up with some way to make good on a bond payment of more than 10 billion Euros (that it doesn’t have) by the second week of March. If not, it’s off to the races with the (official, rather than nominal) default. This default would not be of the orderly variety and would, most likely, also result in Greece’s expulsion from the Eurozone. Then the dominoes would begin to fall, with (order subject to change) Italy, Ireland, Spain, Portugal falling next, leading the northern European countries to flounder with bank failure (Germany denied world domination for the third time in a century) and then the slow, piecemeal, almost nonexistent recovery in the United States put in great danger.
The sticking point at this point in the most important week for Greece, is that many people are starting to realize (or at least talk about the fact that they’ve realized) that there is only so much austerity, tax hikes, and service cuts, that the public can stand before it makes no sense. The IMF, in the past week, has said that the deep austerity forced on Greece in exchange for the bailout funds thus far given, is actually harming, that’s right, harming Greece. A conclusion that much of the rest of the world is realizing as other nations contemplate their own faltering economies. But why listen to experts and economists, when public opinion polls show that the Germans think Greece should leave the Eurozone? And why not thank the debt holders for their generosity in agreeing to write down (yes 70% is a lot, but 30% of something is better than 100% of nothing) as suggested by the outgoing head of Deutsche Bank on his way to Athens for negotiations?
In the architecture of the most recent “plan” to save Greece from collapsing under the weight of their debt, is a further reduction of the minimum wage (which, at the moment, sits at the equivalent of around $5.15/hr), the elimination of the culturally important Christmas and Easter bonuses, and supplementary pensions which have all been a mainstay of the Greek social compact of the modern era.
With yesterday’s ultimatum from Eurogroup head, Jean-Claude Junker, that the Greeks accept the plan as it exists now, or default, positions are being entrenched, ire is being raised, and (for someone who has studied a bit of Greek history, both modern and ancient) it appears we might be headed rather rapidly towards a “Malon Labe!“ moment (this was the iconic response by King Leonidas to the demand that the Greeks at Thermopylae lay down their weapons and surrender to the Persian Empire, it means, “Come and take them”).
While ultimate bankruptcy and default will not happen until March, it is widely understood that this weekend is the deadline for some sort of agreement in order to get bailout funds to Greece to make its March bond payment. So, perhaps, finally, we are at the actual most important week for the future of Greece…until next week, that is…
This article first appeared here: http://findingthehellenictrail.blogspot.com/2012/02/shockingly-another-do-or-die-week-for.html
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Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
by Anonymous with an introduction from Roy W. Bakos
I have a friend that cares very deeply about the issues that we face in our society today. We have talked, albeit briefly, about many of these and some solutions and I had also told him about this website. He sent me this take on the Occupy Movement and corporate greed that lays out what he sees as the causes and offers a solution to them that is logical and makes a lot of sense. Bear with the length of the piece…the problems were not caused in a soundbite and the solution won’t be a soundbite either. Length and Logic might disqualify many things from being aired in the mainstream but here at the Moose, we revel in things like this. Enjoy, reflect, and please comment and share.
This is a discussion about greed and its impact on the socio-economic well being of our society as a whole. It can be argued that greed is the root cause of poverty and most other manifestations of economic instability in our country. Webster’s defines greed as “excessive desire for getting or having, esp. wealth; desire for more than one needs or deserves; avarice; cupidity”. This definition falls short, however, in that it does not encompass another important aspect of greed – the obstruction of opportunity for others to get or to have what those others minimally need or deserve. The accumulation of wealth is not in and of itself evil or immoral. It is human nature to desire to achieve the reasonable security and wellbeing that comes with a modest surplus of personal wealth, and we cannot reasonably fault those who aspire to better themselves. Generally speaking, we all want more than we have, and few are able to fully suppress this natural inclination. However, when the pursuit of wealth goes beyond that which is necessary to attain a reasonable level of security and wellbeing, and when the methods employed in the pursuit of excessive wealth effectively deny others the opportunity to achieve a reasonable level of security and wellbeing, the pursuit of such excessive wealth then fits the expanded definition of greed, and may rightly be viewed by society as both evil and immoral.
It is troubling to observe that our society, the most advanced, educated, and sophisticated society ever to have developed throughout the span of civilization, consistently fails to recognize, appreciate, and learn from the events leading to the demise of other societies over the course of recorded history. How can we overlook the glaring fact that the common denominator in the collapse of those other societies has been the concentration of wealth and power in the hands of a relatively small number of “elite” individuals at the expense of a dwindling middle class, ultimately resulting in a grossly disproportionate two class socio-economic system in which the poor greatly outnumber the wealthy? Why do we treat the historical accounts of the French Revolution, the Bolshevik Revolution, Mao Tse Tung’s Long March, and, to a lesser extent, our own American Revolution, as if they were mere stories for the entertainment of children? These events happened. They happened because the societies they sprang from had been allowed to deteriorate into lopsided two class socio-economic systems in which the poor grew to a critical mass, and such events can happen again whenever similar conditions are allowed to persist. Yet there are those today who bandy about the term “Class Warfare” in an effort to ridicule attempts to rectify such dangerous imbalances, without understanding the historical nature and consequences of true “Class Warfare”. It is not without good reason that the phrase “Those who do not learn well the lessons of history are doomed to repeat them,” was coined.
Our society was founded on the principle, among others, that we are all entitled to life, liberty, and the pursuit of happiness. It is no coincidence that these entitlements are presented in the Declaration of Independence in this particular order, for without life there can be no liberty, and without liberty there can be no pursuit of happiness, other than the pursuit of liberty itself. By virtue of this hierarchy, the exercise of the right of one individual to pursue happiness may not limit or impinge upon the right of another individual to enjoy life and liberty. This principle is aptly illustrated by the old saw (paraphrased) “Your right to swing your fist ends immediately before contact with my nose begins.” Further, our society has devised laws that forbid one individual to take the life of another, to deliberately or negligently injure another, or to imprison or otherwise constrain the liberty of another.
It can be argued that the right to life is more than merely the right to live, but, rather, the right to live and enjoy at least a certain reasonable minimum or “basic” quality of life. It can be argued further that a basic quality of life in modern times should include, in addition to liberty and the freedom to pursue happiness, the basic essentials of life as they are currently recognized – clean air to breathe, clean water to drink, sufficient untainted food suitable for sustenance, clothing and shelter adequate to provide both privacy and protection from the elements, safe and timely disposal of wastes, and access to adequate health care – without fear that those essentials may become tainted or inaccessible. It would be unreasonable to expect that any rational individual would knowingly and willingly forgo his own access to any one of these essentials, except in reaction to circumstances immediately threatening life and limb, either to himself or to those for whom he cares.
Unfortunately, within our society there is rampant disregard for the precedence that should rightfully be accorded to the right of an individual to enjoy a basic quality of life. Our socio-economic system routinely fails to constrain or dissuade individuals who, in the exercise of their lesser right to pursue happiness, directly or indirectly curtail or disregard the greater right of other individuals to enjoy life and a basic quality of life. Notwithstanding the laws we have made intending to protect these basic rights from direct infringement, we consistently tolerate, to varying degrees, actions that do not directly or immediately take life or cause injury or physically constrain liberty, but which nonetheless indirectly diminish or constrain our enjoyment of life and a basic quality of life.
Until recently, a classic example of this phenomenon could be seen in our nearly nationwide tolerance of tobacco smoking. Smoking is a purely self-indulgent activity, performed for purposes of pleasure, vanity, rebellion against authority, or to avoid the discomfort of withdrawal. As such, smoking cannot qualify or even remotely approach qualification as an essential of life. Rather, in terms of rights, smoking qualifies only as a means by which happiness may be pursued. Further, long term repetitive exposure to tobacco smoke, both primary and secondary, has been scientifically proven to be a cause of cancer and emphysema, and even a single short term exposure can trigger fatal reactions in some asthmatics. The act of smoking in the presence of any nonsmoker clearly exposes the nonsmoking individual to risks of potentially fatal consequences, yet, until very recently, our society accepted and condoned such conduct because a single exposure rarely resulted in immediate loss of life or the onset of other symptoms. We did not consider the separate inconsiderate acts of individual smokers, the collective acts of many, or even such acts accumulated over time, to be immediately life threatening. Yet, we allowed smokers, as a result of their accumulated acts, to slowly kill thousands of nonsmokers annually. An individual who eventually dies as a result of accumulated secondary exposure to tobacco smoke is no less deprived of his right to life than one who is killed instantly by an assailant, yet we did little or nothing to enjoin smokers from their inconsiderate acts so as to protect the nonsmokers’ right to life. Effectively, the right to pursue happiness was allowed to trump not only the right to a basic quality of life, but the right to life itself. However, within the last few years a more enlightened viewpoint has led to legislation to ban smoking in most public places, and private industry is largely following suit.
The argument condemning smoking is no less valid for many other forms of cumulatively life threatening activity. For example, nearly all types of pollution are cumulatively life threatening, and can be traced back to pursuit of happiness as the root motivation for the acts that cause their release into the environment. So too are starvation, exposure, and lack of access to adequate health care both life threatening and traceable to pursuit of happiness by a select group as the root cause. The common thread here is that the decisions that result in environmental pollution, mass layoffs, foreign outsourcing, and inadequate pay and benefits for the rank and file, are almost universally made on the basis of high profit motivations which, in turn, are based on the desire to satisfy disproportionately high ambitions for the pursuit of happiness by a fortunate few. We consistently allow a relatively small number of individuals to live like kings, while our so-called middle class shrinks and millions of individuals are forced into poverty. In essence, we tolerate greed, and fail to recognize greed as an infringement on the right to a basic quality of life for those who are either directly or indirectly impacted by that greed.
There are those who will argue that it is not an act of greed for investors to expect a reasonable return, thus, the profits to support that return are entirely justifiable. That argument is not disputed here, nor is the companion argument that it is necessary to compensate handsomely in order to retain the business leaders who are able to deliver the expected return. However, it can also be argued that disproportionately high returns and compensation are not justified when they are garnered at the expense of a basic quality of life for those who do the actual work that generates the returns. It can further be argued that the level of compensation demanded by corporate executives, sports figures, and other “superstars” is artificially high because we tolerate such demands in deference to the supply and demand nature of free enterprise, or because the well-off are simply willing and able to pay whatever price is asked. How then can we reconcile these conflicting arguments? On the one hand, we seek to achieve a more fair and equitable distribution of wealth, while, on the other hand, we do not wish to discourage the “superstars” from offering their services in a competitive market. This is the dilemma that we must address.
It can be reasonably argued that greed is an integral part of human nature, that we are all in some way guilty of acts or desires that would qualify as greed, and that it is not feasible to remove greed from our nature through regulation. However, it may be feasible to regulate the more egregious manifestations of greed. In our pursuit of a solution, we must be vigilant in our preservation of both free enterprise and the principle of superior reward for superior value of performance. Without them, our economy will grind to a halt for lack of incentive. We must be careful, therefore, to avoid approaches that may result in the elimination of incentive, as well as those that may encourage those who would seek to gain reward without contributing fair value of performance in return. However, we must also avoid approaches that offer incentives that may result in rewards that are disproportionate to value of performance. Therefore, we must devise approaches that provide adequate but realistic incentives, and demand realistic fair value of performance in return. The goal here is to develop a system that provides equal opportunity to earn rewards for all who are willing and able to deliver fair value of performance, while, at the same time, curbing the excesses that ultimately result in the obstruction of opportunity for many because the available reward is monopolized by a select few.
In order to effectively curb excess, it must be carefully defined. It can be argued that, within a given organization, any individual who is willing and able to provide value of performance is, in turn, entitled to reward commensurate with the value of performance delivered. However, reward for value of performance is typically skewed disproportionately in favor of executive management. Further, the incentives for executive performance are typically structured to encourage executives to implement policies that diminish that portion of the available reward that represents fair compensation for the value of performance provided by their subordinates, in order to provide greater reward for themselves. It is not uncommon to learn that an executive at the helm of a business entity is compensated at a rate that is hundreds, or even thousands of times that of his average subordinate, and that the same executive can earn bonus compensation many times that of his base by implementing policies that further reduce the total and average compensation of his subordinates. Executives rarely include themselves among those affected by policies intended to reduce costs in an effort to boost profits. It may be argued, therefore, that the executive’s performance is disproportionately overvalued, while the performance of his subordinates is disproportionately undervalued.
In the natural order of things, the degree of difficulty associated with achievement of objectives typically increases more rapidly in proportion to increases in the objectives themselves. This is the law of diminishing returns. However, the law of diminishing returns has in some way been circumvented when it comes to executive compensation. We typically reward executives rather lavishly for achievements over which they have presided, but which were brought about not by their direct efforts, but by the efforts and sacrifices of their subordinates. Contrary to common sense, we also reward executives for failures – there is no rational, ethical, or moral justification for paying bonuses at all, much less exorbitant bonuses, to executives presiding over failing businesses. For the purposes of this discussion, failing businesses include not only those that lose money or fail to make a profit, but also those that fail in their responsibility to provide job security and realistic opportunity to achieve prosperity for all of their employees. That there should be superior reward for higher responsibility and the rigors of leadership is not questioned, rather, it is the excess to which that reward is typically allowed to elevate, and the means by which it can be realized, that must be scrutinized.
How then shall we define excessive reward? Excess could be defined as that which exceeds that which is needed to achieve the reasonable security and well being that comes with a modest surplus of personal wealth. Excess could also be defined as that which exceeds the true value of performance associated with a given level of responsibility. Excess could even be defined as that which is disproportionately large in comparison to the compensation assigned to others whose efforts directly cause the means to reward to be realized. In any case, excess cannot be assigned an absolute value because the relative degree of need and the relative value of a given level of responsibility can vary widely among individuals and organizations. There are no common reference points against which needs and values can be uniformly evaluated. Yet, for the sake of this exercise, it may be conductive to identify some practical examples to serve as discussion reference points. For those who are unable to afford a reasonable minimum or “basic” quality of life, it is difficult to imagine how any given individual could truly need more than one million dollars per year to achieve the reasonable security and wellbeing that comes with a modest surplus of personal wealth. It is equally difficult to imagine anyone bearing a level of responsibility greater than that of the President of the United States, a position that pays considerably less than one million dollars per year, with no bonus incentives whatever. It is also difficult to imagine how the true value of performance of any one individual in a given organization could possibly be more than one hundred times greater than that of any other individual in that same organization.
This line of reasoning may lead some to conclude that a hard limit on annual executive compensation is being proposed. On the contrary, while a hard limit on executive compensation may be perceived as a potentially effective curb on excess, the imposition of hard limits on executive compensation would effectively eliminate the incentive for the executive to deliver greater value of performance once the hard limit is reached, and is therefore not an acceptable approach. It is instead necessary to devise means by which the executive may achieve greater compensation in return for greater value of performance, while at the same time maintaining that compensation in reasonable proportion both to the value of the executive’s performance and to the value of the performance of his subordinates. For the purposes of this discussion, the term “executive” applies to any Officer or Director of a business entity, and we will cite the CEO as the prime example.
Consider that the CEO is charged with the responsibility to operate the business profitably by leading and directing the activities of his subordinates. Consider further that an inherent responsibility of leadership is to develop and maintain reasonable opportunity to achieve security and wellbeing for all subordinates who deliver a reasonably achievable value of performance. It can be argued that the CEO has a responsibility to achieve prosperity not only for the business entity, but also for the people who physically perform the business of that entity and without whom the entity could not function. It can also be reasonably argued that the executive talent, for which the entity awards the CEO the highest compensation, should be capable of achieving prosperity for all – the business entity, its employees, and the CEO, in that order.
That limits of some kind are required seems clear, since no other approach has yielded acceptable results. The “Trickle-Down” approach has demonstrated itself to be a dismal failure, and is most unlikely to prove otherwise, not because the basic premise is flawed (under ideal circumstances “Trickle-Down” should readily achieve the desired result), but because it cannot be successfully applied in the face of uncontrolled greed. In order for prosperity to “Trickle-Down”, those at the top must be willing to relinquish that portion of their own prosperity that represents excess. Again, it is not feasible to remove greed from human nature, so the “Trickle-Down” theory will never work in practice because the prosperous will rarely admit to having any excess, much less relinquish it. Instead, perhaps we can find a way to leverage greed. What if executive incentives could be tied not only to profit objectives, but to employment and compensation levels as well? What if the executive, in addition to achieving a reasonable return on investment, must also achieve job security and equitable compensation for his subordinates as a factor in raising the limits on his own compensation? Instead of the “Trickle-Down” theory, what if we tried the “Buoy-Up” theory instead? Just as a deeper layer of more dense liquid is required to float a denser object than can be floated by a shallow layer of lighter liquid, a larger, more highly compensated workforce should be required to “float” higher executive compensation than that permitted for a smaller and lower compensated workforce. It is not unreasonable to expect corporate leadership to lead not just itself and its investors, but the entire organization to greater prosperity. Again, the superior talent it takes to command high executive compensation should be more than capable of balancing the conflicting goals of return on investment and full, fairly compensated employment. It follows then that it may be possible to effectively and equitably regulate executive compensation by establishing variable limits that are tied not only to business profit but also to overall, average, and lowest level compensation within the workforce employed by the business entity.
Clearly, some formula or set of rules must be devised to effectively channel executive talent to achieve the desired results. There will undoubtedly be widely differing opinions regarding the form and function of such rules, and it is not intended that the examples presented here be considered as any direct recommendation. Rather, these ideas are intended to be initial inputs to a dialog from which acceptable guidelines may be developed. For the sake of the exercise, let’s start out by designating one million dollars per year, including benefits, perks, profit-sharing, stock options and bonus, as the threshold executive compensation level subject to limitation. Next, let’s limit annual executive compensation, including benefits, perks, profit-sharing, stock options and bonus, to 100 times the annual compensation of the lowest paid full time employee in the organization. Let’s further limit the executive’s compensation to 50 times the average compensation for all employees, and 5 percent of the total compensation for all employees. For illustration purposes, let’s say the lowest paid full time employee earns the federally mandated minimum wage – $7.25/hr X 40hrs/week X 52 weeks/year = $15,080/year. Add 35% for the value of benefits, and total lowest compensation comes to $20,358. This would set the first limit on executive compensation above one million at $2,035,800. Now let’s say the average annual compensation, including benefits, for all employees other than the CEO is $47,000. This would set the second limit on executive compensation at $2,362,500. Finally, let’s say the total compensation for the organization, other than the CEO, is $13,500,000, which would set the third limit on executive compensation at $675,000. The lowest figure resulting from the three limits shall apply, except where that figure is below one million. In this case, the $675,000 limit is raised to $1,000,000. Raising lowest and/or average compensation without raising total compensation, which could only be accomplished by reducing the total number of employees, will not result in higher executive compensation. Raising average and total compensation without also raising lowest compensation, the typical result of increases and bonus compensation awarded only to management, will still limit executive compensation to no more than $2,035,800.
While the compensation-based limits provide incentive to the CEO to foster a more equitable distribution of compensation, they may not do enough to encourage stability and growth of the workforce. This can be addressed by applying another limit, not subject to the one million dollar threshold, tied to the number of full-time jobs held within the organization by US citizens. Based on the average and total compensation figures used above to determine the compensation-based limits, our hypothetical organization has the equivalent of 286 full-time employees (for an organization with part-time employees, full-time equivalents are determined by dividing total annual part-time hours by 2080). Let’s say all of the employees are US citizens, and that all have been employed by the organization continuously for at least one full fiscal year. We’ll let the average number of US citizens employed by the organization simultaneously in each of the two most recently completed fiscal years serve as the basis for calculating the job-based limit on executive compensation. That limit will be a percentage determined by dividing the average number of US citizens employed during the first basis fiscal year by the average number of US citizens employed during the second basis fiscal year, applied to the previously determined limits.
If average employment has remained stable, in this case 286 over both basis fiscal years, and average compensation remains at $47K, a factor of 100% is applied to the previously determined limit, and our CEO gets the entire $1,000,000 for which he otherwise qualifies. If average employment increases, let’s say to 300, up from 286, a factor of 105% is applied, and our CEO gets $1,050,000, assuming average compensation remains at $47K bringing total compensation up to $14,100,000. If average employment decreases, let’s say to 250, down from 286, a factor of 87% is applied, and our CEO gets $870,000, assuming average compensation remains at $47K bringing total compensation down to $11,750,000. In this case, our CEO has failed to perform well enough to maintain level employment and the value of his performance to the 36 people who lost their jobs is zero. If the remaining employees have their compensation reduced in order to keep their jobs, everyone in the organization, including the executives, should bear the same burden in proportion to his otherwise qualified compensation. For example, if average compensation drops 10% to $42,300, the CEO now qualifies for only $783,000, down from $870,000.
If our CEO wants to make more money, as we can rest assured he does, then all he has to do is use his superior mind and business expertise to achieve the profits demanded by ownership while simultaneously maintaining or increasing employment and compensation for the workforce. Success means achieving all of these objectives. Failure to achieve any one of these objectives, regardless of which, is still failure, and failure should not be rewarded. This stricture should apply to executive severance as well, and the clearly immoral and unethical practice of awarding “golden parachutes” to failed executives when they “resign” or are discharged should be brought to an end.
The beauty of this kind of system is that it is very simple, there are no absolute limits on the executive’s compensation, and he can earn as much as his investors are willing to give him, as long as the rest of the organization prospers as well. The system encourages full and fairly compensated employment by rewarding the executive for finding ways to maintain or increase both the number of employees and their compensation, lowest, average and total, while at the same time achieving the profit goals set by the investors. Notice that there has been no call whatsoever for higher taxes or for social programs to hand the CEO’s money over to people who are not working. We are simply asking the CEO to use his high-priced talent to satisfy both the investors and the public interest, which is to put as many US citizens as possible to work in jobs that will provide them with the means to achieve a reasonable level of security and wellbeing.
Again, this approach places no upper limits whatsoever on potential executive compensation, a skilled executive can still earn as much as his investors are willing to pay him, provided he is successful on behalf of the entire organization. This approach does not deny the executive the right to employ non-citizens, it merely offers him strong incentives to give employment preference to US citizens, and to pay them in fair proportion to the value of their performance. What it does do, is to ensure that the executive is compensated in fair proportion to the value of his performance, not only to his investors, but to the people who actually perform the work that results in the achievement of that value, and to our society as a whole.
Some may argue that this approach does nothing to encourage investment, and may in fact discourage investment, as profit potential may be reduced by a full employment – fair compensation policy. The counter-argument is that this approach supports full, fairly compensated employment which, in turn, will inject more money into the overall economic system as more people are able to spend more to achieve a reasonable minimum or “basic” quality of life and to pursue happiness. The logical extension of the “Buoy-Up” approach is that an increase in “bottom-up” spending will result in greater business volume for all competently managed businesses, yielding greater profits for investors.
What about those who are compensated in excess of one million dollars per year, but are not executives? Professional athletes, entertainers, licensed professionals, sole practitioners, investors who are not Officers or Directors, etc., who either have completely passive roles in the business entity, or are only marginal employers having few if any direct employees, or are directly responsible for generating their own compensation based exclusively on their own personal performance. These individuals are paid what their investments, sponsors or clients are willing to pay, are in businesses that do not require the subordinate employees and payroll volume necessary to make “Buoy-Up” feasible, and cannot be regulated in the same way as executives. These individuals, who generate in excess of one million dollars from investments or personal performance, without significant reliance on direct employees, require different incentives that encourage them to keep their surplus wealth in circulation through reinvestment or acquisition of American goods and services. In this case it is the sequestration of accumulated wealth, not the means by which it is acquired, that effectively denies opportunity for others to achieve a reasonable minimum or “basic” quality of life.
It is likely that there will be those who will choose not to invest in any American enterprises because the return potential is not to their liking, or because they are opposed to the “Buoy-Up” approach on principle. Those opposed to “Buoy-Up” might choose instead to invest in foreign enterprises or to simply “park” their cash in ordinary savings rather than support full employment at fair compensation. To counteract that tactic, incentives must be devised that would make it more attractive to invest in American enterprises than anywhere else. Again, the following suggestion is not intended to be a recommendation but, rather, an idea to act as a starting point for discussion. Why not take a “use it or lose it” stance on 50% of any surplus net worth in excess of one million dollars that is not invested in American real estate, American enterprise, American Government securities, or personal property in the form of American made goods? Further, why not encourage those who have such surplus net worth in excess of one million dollars to engage the services of American citizens and enterprises by exempting surplus net worth equal to the value of the services obtained from American sources, and by inflating their surplus net worth by adding the difference in cost between the lowest cost available American services and the actual cost of non-American services engaged?
Exemptions could be made where it can be demonstrated that the specific goods or services required, or the quality of the goods or services required, were obtained from non-American sources because they could not be obtained from American citizens or enterprises. At the end of each fiscal year, 50% of surplus net worth, that amount in excess of one million dollars that is not invested in American endeavors or exempt foreign endeavors, must be liquidated and paid into a federally managed full & fairly compensated employment fund (FFCE), which in turn must invest in American enterprises and programs designed to increase fairly compensated employment of American citizens earning less than one million dollars per year. Dividends realized from those investments must be paid back to the involuntary investors. The initial investment remains an asset of the individual, and figures in the calculation of his total and exempt surplus net worth at the end of the next fiscal year. The investment can be withdrawn by the individual when and to the extent subsequent direct investment in American enterprise, goods or services can be demonstrated.
To illustrate how this would work, let’s say an individual has a total net worth of $2 million. Of that total, $500K is not invested in any American endeavor and is therefore not exempt. Of that $500K, 50% or $250K must be placed in the FFCE fund. If all other factors remain unchanged, at the next fiscal year end the individual’s total net worth is still $2 million but his exempt surplus is now $750K, leaving only $250K subject to 50% FFCE placement. Of that $250K, 50% or $125K must be placed in the FFCE fund. If the individual subsequently arranges to directly invest $125K of his surplus in an American endeavor, $125K is immediately released from the FFCE fund directly to the arranged investment, and if all other factors remain unchanged his exempt surplus at the next fiscal year end becomes $875K. If the individual subsequently arranges to directly invest the $250K FFCE balance in an American endeavor, $250K is immediately released from the FFCE fund directly to the arranged investment, and if all other factors remain unchanged his exempt surplus at the next fiscal year end remains $875K, leaving $125K subject to 50% FFCE placement. However, if the individual directly invests his remaining $125K in an American endeavor before the next fiscal year end, his exempt surplus is $1 million and he no longer has any surplus subject to 50% FFCE placement.
If that arrangement is not enough to convince investors to invest in American enterprise, goods, and services of their own volition, then perhaps they should consider the historically predictable consequences of the current downward economic spiral should we fail to break it – half a loaf is better than none.
The current state of affairs in Greece is such that it seems almost every week is a crucial week for the people of Greece and their ongoing crisis. Greece sits on a razor’s edge, perpetually teetering on the precipice of total societal collapse. The good news isn’t really good, it’s just less bad: Greece received the next tranche of the agreed upon international bailout funds this week, allowing the country to limp along in financial limbo, looking only towards what needs to be done to secure the next set of bailout funds, but not making the fundamental changes necessary to begin the national recovery to secure the future of Greece. All the while, the citizens increasingly lose hope and the chance for any type of better future.
Greece News Roundup:
- Index reverts to downward course
- Euro Zone Leaders Weigh New Budget Rules
- Greece’s Bond Haircut won’t make things easier in the short term
- Ratings Firms Misread Signs of Greek Woes
- European Finance Ministers Approve Billions in Loans for Greece
- Misguided solutions for the country’s economy
- Detached election obsessives
Article first appeared here: Finding the Hellenic Trail
For those of you who don’t know much about post WWII Greek history, Thursday of this week will mark an important anniversary in the Greek psyche. November 17th, 1973 marked the culmination of the series of events known as the Athens Polytechnic Uprising against the military dictatorship (Regime of the Colonels, or Juda, as it’s known in Greece).
The events began days earlier when students at Athens’ Polytechnic University began protesting against the dictatorship and went on strike. Because of its nonviolent nature, the authorities initially allowed the protest and strike to continue. The dictatorship was also well aware that its recently professed desire to return to political rule of the country and away from military rule was being put to the test. The students, who called themselves the “Free Besieged,” barricaded the main gate of the campus and constructed a radio transmitter out of laboratory parts. The radio station repeatedly transmitted the lines, “Here is Polytechneion! People of Greece, the Polytechneion is the flag bearer of our struggle and your struggle, our common struggle against the dictatorship and for democracy!” As word of the protests spread, speakers rallied the people of Athens with the improvised radio station. Moved by the speakers, citizens (mainly the young and the working class) began to converge on the Polytechneion in support of the strike and protests.
In the early hours of November 17th, the government hastily decided the time had come to end the protests (which by that time, were not only against the ruling military dictatorship, but also the United States because of her role in supporting the Colonels in their coup of 1967). Accounts differ, but the general memory is that protesters attempted to prevent authorities from entering the university campus by clinging to the closed main gate, even in the face of a tank sent by the dictatorship to gain entry. Eventually, orders were given for the tank to gain entrance to the campus, crashing through the main gate of the Polytechneion. It is unclear if any students were still holding on to the gate at the time the tank entered. Again, conventional memory of the Greek people says that there were students crushed between the tank and the gate, although officially, there were no casualties in this event.
The events culminating in November 17th would mark truly the beginning of the end for the dictatorship and it would fall in the Spring of 1974. The events of that week are remembered each year in Greece, with wreath-layings, solemn gatherings and, traditionally, a protest march which begins on the campus of the Polytechneion and ends at the United States Embassy. The memory of the events are so seared into the Greek consciousness that a Greek militant revolutionary group took as its name, Revolutionary Organization 17 November.
This year’s remembrances could become especially “boisterous,” given the current sentiment among the Greek people, the ongoing austerity and financial crisis, the recent instability within the elected government of Greece, and the pressure from Europe at large to institute quickly still more harsh spending cuts, layoffs, and tax increases. The knowledge I have on the ground in Greece suggests that this is going to be a long, cold winter for the general public, with no real alternative to avoid it. While certainly, the vast majority of any demonstrators who appear this week to remember the uprising, and its costs, will be solemn and peaceful, there will always be that small, radical element, which wishes to spark large clashes with the authorities. A little knowledge of history will help us to understand why patience will be especially important this week in Athens.
Find the original article here: Four Days Hence
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Welcome to the conversation!
Ok, so Lucas Papademos has been appointed as the new Greek Prime Minister. Read more through the links below to find out who he has named to his Cabinet.
- Papademos vows to keep Greece in the Eurozone
- New Cabinet Sworn In
- New Greek PM
- They saved Europe, any way forward hurts the Greek People
- The euro crisis: slouching towards Bethlehem
*Original Article found here: Finding The Hellenic Trail
|Greek ruins off the Aegean coast.|
So it seems that the Greeks had a minor freak out yesterday as they were trying to put this whole government leadership thing to bed. After a night’s sleep and, probably, some ouzo, the Greeks have arrived at the decision which is considered by many to be the best choice forward as Prime Minister. My question still is: why is the guy who helped cause the problem the right guy to single-handedly lead Greece out of the consequences of the problem?
Read more below…
- Which way now, Prime Minister Papademos?
- KKE (Greek Communist Party) isn’t too keen on the new PM
- Papandreou: The rise and fall of a Greek prince
- New York Times
- The Guardian