PJ Media

87. Mongoose: - Are they not really trying to seek in socialism? Can you honestly say otherwise?
I wouldn’t expect so. David S is an avowed Socialist, he is happy to see the country moving closer to socialism, which is why he was so supportive of BHO.

@78. HonestJon:- Thank you Mr. Malone …

Wow, here’s the sort of exchange one doesn’t often find anymore. Kudos to you AND Marc M.

If I might be permitted to contribute…

- … I am advocating that above a certain level, that the profits that were gained by the people actually in the trench digging the ditch should share in the enhanced profits that their hard work has made possible.
HJ, my first thought here is that there is absolutely nothing to stop those in the trenches from reaping the potential rewards. They can purchase stock in their company like anyone else (assuming it’s public) and are very often able to do so at a discount. This is more often the case with companies reaping so-called “obscene” profits than others.

That said, my question on this suggestion would be: who decides that “certain level”? And who decides the ditch-digger’s share? Based on what? Both are completely subjective assessments. This is why “from each according to his gifts, to each according to his need” is completely unworkable. No human society is capable of defining “gifts” and “need” to everyone’s satisfaction, to say nothing of their actual, objective meaning. It’s the same, or at least directly analogous, here. This is especially true in an enterprise where the level of responsibility and/or risk taken on by a particular individual far outweighs the contribution of any one worker (or, more typically, many).

- In all of my work experiences, I’ve never been permitted to know what my contribution to any company actually means … and in light of the multimillion dollar bonuses that some executives reap; and with consideration to my level of education, knowledge, and experience, how can they possibly be worth so much (in excess of extravagance) while I just (in comparison) barely manage to get by?
It’s not likely you’re ever going to be provided with this information in a company of more than 20 people. Even there, things can get complicated enough to throw doubt on any ostensibly objective assessment of a given individual’s contribution. The only workable alternative is a contract between the employer and employee that formalizes their mutual agreement regarding what the employee’s effort is worth to the company under the best circumstances. In the case of highly paid executives, whether or not we worker bees understand it based on our limited knowledge of how a company is actually run, the compensation level determined by that agreement is always directly proportional to the executive’s perceived financial impact on the company. Many such contracts are written to provide bonuses and the like regardless of the company’s performance, and obviously some Boards consider that arrangement acceptable for certain circumstances. So when we have cases where executives get huge bonuses even when their company lost money, it’s likely due to a contractual obligation that did not factor in unforseeable events – like the sudden worthlessness of real estate backed securities caused by the Dems’ torpedoing the housing market with extended abuse of CRA regulations.

My suggestion here would be this: mortgage all of your assets and start your own small business; take on the responsibility of paying thirty-two employees as well as that of providing for their health benefits, etc.; manage that risk for six years. Whether or not you’re profitable, at the end of six years, measure the risk you took, the ulcers you developed, the overwhelming level of finances you managed and the endless hassles with government (and unions, if applicable) you had to deal with as an employer. Note that in all this your employees took little-to-no risk and made no financial investment whatsoever in accepting your offer of employment. Their rewards were based solely on their ability to make good on their promise to do the job they agreed to do for you, at a rate you both deemed fair. Your rewards are based on far more nebulous factors, requiring orders of magnitude more creativity, commitment, risk, patience, diplomacy and long hours. At the end of that exercise, if you don’t believe you earned the $100M you made when you sold your company to IBM – just as your employees earned what you mutually agreed to pay them (along with whatever they collected on the generous stock option plan you provided) – then I’d be very interested in whatever conclusion you do come to.

This is a scenario based on the rule, not the exception. Those few individual CEOs being demonized by politicians and the media for making so-called “obscene” salaries are a tiny fraction of the whole, but it allows people like BHO to paint with a very broad brush. Executives typically earn what you (in your personal opinion) consider ‘beyond extravagance’ precisely because they handle the nebulous part of the company business, and have an inordinate impact on the company financially.

- … owner/shareholder greed seems to get in the way somehow (no matter what) unless one has connections.
This is a curious statement. When you purchase stock, you expect it to increase in value, yes? And if it doesn’t, you withdraw your investment in favor of a better one. Is that “greed”, HJ? Because that’s what’s at the heart of what you’re describing (actually, complaining about) here. Owners are going to feel entitled to what they’re earning based on the scenario I outlined above. It’s in their best interests to give their shareholders the best ROI they can so that they have the invested cash to grow their company, provide salary increases, etc. Recent volatility in the stock market, thanks to the way the government incessantly tries to micromanage the economy, has distorted this process in such a way that preference is given to shareholder confidence, where possible. The reason being that without that confidence, many companies would cease to operate, meaning their employees would be looking for a job, not simply complaining that they didn’t get a raise.

- As a general rule, the owners/management only very rarely pay as much as they could (and still gain reasonable profit.) They’re in it for the money-and only that. Humanitarian considerations always come second. Greed is always first-grab as grab can.
In my experience this is absolutely not true. Only in the rarest few cases have I ever seen anything remotely like what you describe here. Small businesses – the vast majority of employers – simply do not take this attitude. People won’t work for them and/or won’t be very productive when they do. Larger corporations give the appearance of this condition due to the nature of bureaucracy, which abets a lack of accountability (see also: federal government). That’s a function of size, complexity and human nature, not capitalism.

- Come in, punch the clock, work, live well. If you show up on time when you’re supposed to, do the company a good job, and work hard (with the caveat that the company remains sucessful), then a person should, absolutely, be able to live well.
You don’t get rewards just for ‘showing up’, although that’s exactly what our public education systems have begun preaching to our young.

The problem here, HJ, is that – like ‘gifts’ and ‘need’ – everyone’s definition of ‘live well’ is different. Someone who defines ‘living well’ as having three homes – one in Manhattan, one on Long Island and one in Bermuda – a 60′ sailboat, private plane, 6 weeks’ annual vacation and an apartment for her ‘squeeze’ on the side is going to strive for a very different level of compensation than someone who defines ‘living well” as owning their own home and taking a two-week cruise every other year.

- The general may call the shots, but is he really the one who wins the war? I respectfully disagree with you if you believe that to be so. It is always the dedication of the soldiers that wins a war.
I’m sorry to tell you this HJ, but here you are clearly mistaken. The fact is that both are required. The problem with this analogy, however, is that it’s a false one in this context (employee compensation) because the distribution and level of risk are completely different in war than they are in civilian peacetime.

- How the economic system is supposed to work is not how it is working today.
Here I’d absolutely have to agree. To the extent that overweening government and unions have distorted the normal function of capitalism, confounding the basic principles of honest competition and free enterprise, the economic system is completely broken. And that’s before we even begin to talk about the bankrupting effects of comprehensive health insurance and the wholesale, systematic abuse of various entitlement programs.

- You cannot reasonably argue that John Thain really deserves a toilet worth $35,000…
Here’s the problem, HJ. The question is not what he ‘deserves’. It’s a question of what he’s earned and of his perceived financial impact on his company. Ridiculing Thain’s (or, in this case, the company’s) definition of ‘living well’ (with hyperbole, no less is an exercise in futility. Both your and his opinion there are completely subjective.

- The problem is the gap in remunerative compensation.
No, that’s not the problem, and this is the biggest myth of all. But it’s a convenient stick with which to beat the masses into a frenzy, isn’t it. It’s the same one used by Che, Castro and others who promised “Change”.

The “problem”, if you really want to know, is that we now live in The Age of No Accountability. But that’s another subject entirely.

There have always been and will always be filthy, stinking rich people and filthy, stinking poor people. There will always be this so-called ‘gap’. No system devised so far has ever been able to change that in tens of thousands of years. Capitalism as practiced in America is the closest we’ve ever come as a species, and in numbers this large, to raising so many members of society so far above the level of abject squalor and starvation. That was accomplished by accepting and ignoring the gap, not trying to shrink it based on some arbitrary ideology that pretends all outcomes should be equal. Criticizing that (ongoing) success as ‘not enough’ is an exercise in demanding immediate, unreal perfection. Instead of criticizing, why not help it work even better to finish the job it is already well on the way to accomplishing?

- When I see some rich guy roll down the window on his limo and ask the flagman at a road construction site whether or not he has any Grey Poupon, I get very much excited.
Hmmm… I thought you were a serious person until I read this.

- Here is what I fear, sir. Eventually, the lesser classes are going to revolt against this perceived economic injustice on a wide scale.
Well then what you should be working toward is correcting that false perception, which is fomented using class-baiting rhetoric. What happened to leadership that inspires everyone to do and be the best they can – to live as well as they can? Let’s take even just 50% of the effort currently used to hype the ‘gap’ and apply it toward making government and private bureaucrats accountable – in some tangible way – for their actions. You do that and everything else will magically take care of itself.

We’ve already seen how wealth redistribution works out, and how many lives are lost in the process of trying to force it to work. I’ve studied the history. I’m satisfied that socialism is an utterly discredited ideology.

- Thou shalt not steal.
Not sure you could come up with an argument that makes this applicable. But I’ve been wrong before.