Monday, January 21, 2008

"Some of us still believe that the worth of a CEO should be determined by stockholders rather than the President of the United States."

David Harsanyi, author of The Nanny State, is worried about the expanded role of government that Hillary Clinton proposes:

According to the New York Times, Hillary Clinton says that if she becomes president the federal government will take a more active role in the economy “to address what she called the excesses of the market and of the Bush administration.” Scary stuff for anyone who still believes in the free market.

I agree--scary stuff. What's next? Holding wages down on those people she deems make too much money, taxing the daylights out of those who are successful? What will become of a country that rewards doing poorly with tax rebates and penalizes those who are successful with higher taxes? You get more of what you reward. But then, isn't that the idea? Remember the lyrics to the the old Rainmaker's song, Government Cheese:

They'll turn us all into beggars 'cause they're easier to please
They're feeding our people that Government Cheese ....

Perhaps that should be the new slogan for the Hillary campaign.


Anonymous Anonymous said...

Basic Progressivism, I guess. Goes all the way back to Teddy Roosevelt and trust-busting. Trouble is, some Progressives don't know when to quit. I think that's when they become Socialists.

4:54 PM, January 21, 2008  
Blogger gossypol said...

Dr. Helen, you asked, "What's next? Holding wages down on those people she deems make too much money, taxing the daylights out of those who are successful?"

No need to wonder too much. In June of 2004, Hillary reportedly said to a group of rich supporters, "We're going to take things away from you on behalf of the common good."

And I remember something from the original Hillarycare campaign about how doctors should be allowed to make enough money to buy one Mercedes, but not two. Hillary has tried to make amends recently for telling nurses to get into a different line of work if they wanted to make money consistent with their education and responsibilities.

One concept I find especially troubling is the idea that people shouldn't be allowed to make real money if they are providing goods and services people really need. That's how Venezuela ended up with only luxury goods on supermarket shelves and a bunch of glitzy malls no one can afford to go to.

Demonization of those who make money doing good could be a factor in Chelsea's decision to pursue a career in finance instead of something like medicine. Since ordinary people don't "need" these types of services, it is acceptable to make money providing them. On the other hand, it would be greedy for her to make money saving lives as a doctor or as an employee of a pharmaceutical company.

5:31 PM, January 21, 2008  
Blogger Pixelkiller said...

Socialism: The Road to Serfdom.
(Hayek, University of Chicago Press, 1944)
He said that the extended collectivism towards which free nations are gradually moving is incompatible with democracy, that social planning, as interpreted today, may eventually destroy all individual freedom, political no less than economic.
Gee, and 64 years ago too.
He also said that only if we understand why and how certain kinds of economic controls tend to paralize the driving forces of a free society, and which measures are particularly dangerous in this respect, can we hope that social experimentation will not lead us into situations none of us want.
Yeah! The road to hell is paved with good intentions. . . Or what are preceived as good intentions.

6:05 PM, January 21, 2008  
Blogger Unknown said...

"They'll turn us all into beggars 'cause they're easier to please." I was watching a show on North Korea. In it, foreign doctors were performing simple cataract surgery on some of the North Koreans. Even the most routine kind of health care is not available to these people because of their "dear leader". And the first thing these people do when their sight is restored is to bow down before a picture of their leader and thank him for this great gift he has given them.

6:10 PM, January 21, 2008  
Anonymous Anonymous said...

If she makes a successful bid for the white house, and tries to implement many of the things she has been speaking about all these years, she will be but a one term president.

But our nation is heading in that direction (socialism). And for the life of me I can't understand why. It doesn't make a particle of sense.

6:20 PM, January 21, 2008  
Blogger Patrick said...

Believe me, I am no fan of Hillary. She would be a disaster.

But let's stop pretending that CEO salaries are determined by the market. Wrong. They are set by a board of directors composed of people who themselves are/were/will be CEOs, who have a massive conflict of interest and want to set CEO salaries sky high, in hopes that what goes around comes around.

This of course does not apply to other highly paid people, such as professional athletes, best-selling authors, etc.

6:30 PM, January 21, 2008  
Blogger Pius Aeneas said...

"But our nation is heading in that direction (socialism). And for the life of me I can't understand why. It doesn't make a particle of sense."

Sadly, it makes perfect sense. Government largess is like a drug. Someone who's never had heroin before wouldn't miss it, or even understand why they'd want it. But once you're hooked, it's easy to keep taking more, but nearly impossible to cut back.

Once entitlements and government programs are enacted, they essentially become set in stone. Even though they were never provided or guaranteed to begin with, removing them once they exist becomes a ruthless deprivation to the people. Even trying to reduce the growth of such spending and not the amount itself almost guarantees you a comparison to Ebenezer Scrooge, or worse.

6:54 PM, January 21, 2008  
Blogger David Foster said...

Note that Democrats are much more concerned about CEO pay than about the incomes of movie stars, singers, athletes, and trial lawyers.

7:29 PM, January 21, 2008  
Blogger David Foster said...

gossypol..."Hillary has tried to make amends recently for telling nurses to get into a different line of work if they wanted to make money consistent with their education and responsibilities" you by any chance have a link on that?..sounds interesting!

7:34 PM, January 21, 2008  
Blogger The Opinionated Bastard said...

While you quoted the NYT correctly, they didn't quite quote Hillary correctly.

I hate the Borg Queen, but at best she implied that perhaps the financial markets need a little more watching.

She also endorses shifting the tax cut away from the > $250,000 set in order to increase it for people under that, which actually makes a certain amount of sense as a job stimulus package.

7:41 PM, January 21, 2008  
Blogger Latino said...

I have no doubt that those who support Hillary/Democrats will do much better in terms of government regulated compensation than those Republican dinosaurs who still support free markets. Her statism will lead to a one party system (see, USSR). This is all of a piece with her attacks on the electoral vote system and federalism in general.

7:49 PM, January 21, 2008  
Blogger Kai Carver said...

You can hear the Government Cheese song here:
Mmm, cheese.

7:51 PM, January 21, 2008  
Blogger Kai Carver said...

"Government Cheese" by the Rainmakers (audio only)

7:52 PM, January 21, 2008  
Blogger Some Schmuck said...

Private property regulated heavily regulated by the government. Isn't this the famous "third way"?

Liberal Fascism indeed

8:38 PM, January 21, 2008  
Blogger Unknown said...

Re: tax rebates for people who don't pay taxes - sounds like an incentive for those of us who pay lots of money in taxes to stop being productive...stop working...take government handouts.

TANSTAFL (pron. tans-TAF-l): There ain't no such thing as a free lunch.

9:37 PM, January 21, 2008  
Blogger JorgXMcKie said...

"She also endorses shifting the tax cut away from the > $250,000 set in order to increase it for people under that, which actually makes a certain amount of sense as a job stimulus package."

Uh, no, it doesn't. It doesn't kick in soon emough to provide any stimulus, it is a slow drip, drip, of money not a stimulus, and it penalizes those who most stimulate the economy.

You might want to check out the infamous "Luxury Boat Tax" of 1992 or so. The idea was to tax new boats that cost more than $200,000 at 10%. This was suppose to raise $15M per year. In fact, sales of big new boats all but stopped, businesses closed and about 5000 boat building jobs were lost. The unemployment alone cost more than $15M and the tax brought in essentially nothing. This is the opposite side of taxing those >$250,000 to provide, what, about $100/person/year in the lower brackets.

I guarantee it'll cost way more than it brings in and it'll not stimulate the economy.

10:10 PM, January 21, 2008  
Blogger gs said...

Patrick wrote, "Believe me, I am no fan of Hillary...(p)But let's stop pretending that CEO salaries are determined by the market."

I agree with both remarks.
When George W. Bush was inaugurated on January 20, 2001, the S&P 500 was at 1343. Last Friday it closed at 1325. Our stock market was closed today, but as I type the futures market has the S&P 500 at 1268.

Well, at least the index is valued in rock-solid American dollars...nevermind.

10:18 PM, January 21, 2008  
Blogger DADvocate said...

Hillary appeals to the petty, and dangerous, jealousy of the less successful. Take away the incentives to perform at a high level and fewer people will perform at a high level. Whether you like it or not many people excel in order to have big houses, fancy cars, boats, vacation homes, etc.

In the process of excelling they do a lot of good for the rest of us. It is only a recent phenomena that we reward people for sitting around doing nothing, watching big screen TVs and getting fat. I don't begrudge CEOs their salaries or their lifestyle. I'm happy with mine and don't want to wear a suit every day and sit in endless meetings.

Our next president needs to work on making our federal government as productive and efficient as the corporations that Hillary hates so much. Given their recent performances, we certainly pay our Senators, Representatives and President too much. Their pay should be docked. Bringing businesses down is not the answer but raising the performance standards of government is a laudable goal.

Hillary appeals to the base, negative emotions and desires in people. Nothing good comes out of that.

10:48 PM, January 21, 2008  
Blogger SBW said...

I do begrudge CEOs their salaries. Unless all your workers are illiterate jackasses, and you are some brilliant puppet master, your success directly depends on the work ethic, intelligence, and ‘esprit de corps’ of thousands of subordinates. I’m minimalist to say the least, but the hero worship of CEOs among the right is pathetic, and I vote right. I had and have tremendous respect for the Marine generals I served under, but make no mistake, they were nothing without all the competent and dedicated officers and enlisted under their authority. The fact that a lot of people on this thread can’t see the parallel in private companies is astonishing. You are as powerful as the power of the individuals you lead. Government intrusion in salaries? No thanks, but don’t bullshit me on the value of CEOs.

11:16 PM, January 21, 2008  
Blogger tomcal said...

She said it again tonight, a forced re-negotiation of mortgage contracts and a suspension of the foreclosure process.

I expect this kind of thing in the banana republics of Central America, but here in the U.S. a deal has to be a deal. If it is not, then we might as well just throw out more than 2 centuries of the development of our economic system and start over on the basis of Marxist economic theories.

I think wage and price freezes were tested adequately in 1970 - they don't work. A re-negotiation of commercial contracts mandated by government fiat would be a hundred times worse. Why stop at mortgages? Let's force all contracts to be re-negotiated as soon as it becomes apparent that one party made a better deal than the other.

Excuse me while I go throw up.

12:36 AM, January 22, 2008  
Blogger tomcal said...

Correction: 1971.

12:42 AM, January 22, 2008  
Blogger gossypol said...


Hillary Clinton's website has a video called "Nurse for a Day" in which she follows a nurse around to see what nurses do:

I can't find the original post I read, but the point was made that Hillary apparently did not have a good understanding of nurses' duties during the original Hillarycare campaign, when she was trying implement a government take-over of the entire health care system. Hence her former view that nurses should not expect to be well-paid. With her new appreciation of a nurse's duties, Hillary is now making a big push for the support of nurses' unions.

You should be able to access a series of videos at Hillary's site. I especially like the "Presents" video, about the Christmas gifts she plans to give to America on your dime.

But back to the "gifts" Hugo Chavez is giving to the Venezuelan people:

1:52 AM, January 22, 2008  
Anonymous Anonymous said...

You take a spoonful of 1984, a spoonful of the Communist Manifesto, and season with Saul Alinsky, and you have Hillary Clinton in a lamb suit. Not a whole lot of difference in Obama.

The Democrat party takes over, and becomes "the party". You have the inner members, the rulers - and the outer members, the bureacrats - that goes all the way down the line to include school teachers, water works employees, trash men. And they are all keeping their eyes on everyone else. You know, for the good of the party.

The rest of us? A small class of bourgeoisie, with the rest of us the proletariat.

Naaaaa, it can't happen here.

6:15 AM, January 22, 2008  
Blogger Derve Swanson said...

Um, have many of you taken a quick glance at the "free" market lately?

Maybe she just wants to cut away at some of the entitlements, and kickbacks to friendly contributors to make it function efficiently again.

We can't all be insulated from reality, bound and determined to keep a straight face when things seem to be, say, heading south all around the regions.

Romney too, like Teddy Roosevelt, understands that you do what it takes, sometimes taking a more active role no matter how much the more incentive-entitled whine. If you don't like the gov'mint cheese, you learn to make your own fair and square. But conditions have to allow for that. Nobody forces it down your throat, helen, fear not. And y'all's cheese-making skills can't be all that rusty, so don't worry about losing what you have...

8:03 AM, January 22, 2008  
Anonymous Anonymous said...


"Exxon - Mobil made 34 billion dollars last year! I want that money!!" Gee, who said that?

That was after E-M payed 44 billion in taxes.

8:26 AM, January 22, 2008  
Blogger tomcal said...


The suit Hillary was wearing at last night's debate may have looked like a lamb suit to you, but it looked like a Mao suit to me.

8:55 AM, January 22, 2008  
Blogger Ken said...

Take the following two statements that appear to be the centerpiece of Lady Macbeth's program:

1. "We're going to take things away from you on behalf of the common good."

Is there an echo of "from each..." there?

2. "If you work hard and play by the rules, you can have a good life."

There's an echo there, too, but that's all I'm going to say, lest someone invoke Godwin's Law.

9:36 AM, January 22, 2008  
Anonymous Anonymous said...

I'll bet the Amero won't even be the same size as the dollar bill.

10:37 AM, January 22, 2008  
Blogger tomcal said...

Re: The Amero

No it won't; it will be much bigger so that the picture of Hillary in her Mao suit will be more visible from a distance.

The denominations will be smaller in order to ensure an extremely large number of Hillary portraits in circulation.

1:40 PM, January 22, 2008  
Blogger DADvocate said...

sbw - nothing you say justifies limiting CEO salaries. Begrudging someone their success says much more about you than them.
Envy, perhaps? The Marines have "competent and dedicated officers and enlisted" because they only take a "few good men" and women. Good CEOs do the same.

There's no worship of CEOs here. Just recognition that it's OK for them to get big bucks. They made choices and, for the most part, worked to get where they are. I did the same. I'm rather minimalist also. I don't want to live in an upscale house in an uppity neighborhood or have a mansion somewhere. I like living in the country in a modest house although I want more acreage. But that will come.

BTW - I love Exxon-Mobile. They bring by fuel for my vehicle from across the ocean and sell it in places so convenient that I don't go 10 feet out of my way to buy it. I'm glad they make enough money to motivate them to do this.

Hillary Clinton has no idea how to improve our economy, average income, etc. She just knows how to make empty promised to sucker the truly greedy into voting for her. In the long run, her approach will hurt Americans more than George Bush's ever did.

2:11 PM, January 22, 2008  
Blogger SBW said...

Interesting. My background is in Geology and Geophysics. I know well the risks (monetary and otherwise) of oil exploration, more than many people that complain about gas prices. I for one have no issue with higher market-driven cost, because the actions taken to extract oil are sometimes extraordinary. But the reason that Exxon can bring oil to your neighborhood is that many engineers (petroleum and otherwise), most educated at state schools, and many geologists, most educated at state schools, along with armies of logistics personnel, production platform workers, business personnel, etc make that happen. I would like the CEO to do it armed with 100,00 idiots.

I approve of private companies making money. The more the better. I happen to work for one. Obviously, the big difference between me and you, with the intelligence (perhaps envy!) difference in my favor, is I realize that thousands of people in the organization made it happen, not the CEO.

You obviously believe is charismatic leadership. I do not subscribe to the caudillo factor, don't believe it is in the least bit American, and realize that CEOs, whom you seem to worship--okay, fawn over, are only a minor factor in a successful organization. Can a CEO ruin a company? Sure. Can many average men stewardship a company filled with thousands of educated workers? Damn straight.

CEO salaries will remain high as long as shareholders are convinced they are worth the price. I, as a shareholder, do not think they are worth the amount they are paid, by an order of magnitude. And I obviously hope that many Americans will share my view. Many do, and surprisingly, vote Republican or Libertarian. Love of free market certainly does not mean defending CEOs. I seem to see that all around the blogosphere.

As a postscript, from my view, admittedly, Marine generals have little determination in who makes it into the Marine Corps. Most of the selection process occurs by personnel at the Captain or below level on the officer side, and the GySgt (mainly lower) on the enlisted side. Again, many quality people make the determination, not the leader. But he should be compensated--in all forms--300 - 400 times as much, right? (Generals don't, not by a long shot, but that would be the equivalent in the private sector).

11:51 PM, January 22, 2008  
Blogger tomcal said...


Your comment about the "Caudillo Factor" is interesting.

The word "Caudillo" is widely used in Latin America, where I have a lot of experience. I really don't know whether it has a true English translation - it may, but if it does, I dont know it. If it is commonly used outside of the Spanish language, I was unaware.

In any case, a "Caudillo" is basically the top guy in what we call rule by hegemony - "a kind of domination that implies a measure of consent by those at the bottom" (Chasteen, "Born In Blood And Fire", W.W. Norton, 2001).

I would agree with you if this conversation were taking place in the mid-1980's, when corporate governance was indeed hegemonistic. In the mid to late 1980's, however, the advent of the "leveraged buyout" essentialy put an end to hegemonistic corporate leadership. From that point forward, corporate leaders who were not providing value to their shareholders were easy Pickens for corporate raiders who maximized shareholder value.

From that point forward, in my humble opinion, it became very difficult for entrenched executives to enrich themselves (over the long term) to the detriment of shareholders.

Nowadays, if a CEO is not providing value in excess of his compensation to his shareholders (or even his "stakeholders" if you subscribe to PCBS) he will be replaced very quickly.

12:40 AM, January 23, 2008  
Blogger Bruce Hayden said...

The problem with a lot of CEO salaries is that many of them are not driven by profits and the like, but rather by the incestuous relationship between them and their boards of directors. First, many CEOs have at least some power over who sits on their boards. Secondly, many boards have CEOs from other companies, and the CEO of one company is often on the board of another.

But the solution is not to limit CEO pay, per se, but rather, reform corporate governance. There are CEOs who are worth huge amounts of money. The big issue is with CEOs making such as they lay off line workers and force pay cuts below them. A lot of this though can probably be solved by limiting the incestuous nature between boards and CEOs.

I would suggest more pay through stock appreciation - except that we have seen a lot of cheating in that area, with back-dating of stock options, etc. But if the stock is going up quickly (and legally), there shouldn't be the problem of rewarding the CEO while the ship sinks.

2:17 PM, January 23, 2008  
Blogger DADvocate said...

You obviously believe is charismatic leadership.

Since I don't believe in "charismatic leadership" per se, I'm not sure why you think it is obvious I do. I believe in competent, honest leadership. One of the best bosses I ever had had the personality of a rock. But he told you exactly what he wanted and rewarded you exactly as he said he would when you performance met his standards, which were reasonable.

The CEOs of Enron weren't honest nor competent. Robert McNamara was an imcompetent who somehow managed to keep getting high paying positions. Jack Welch was worth it at GE.

I agree with bruce hayden for the most part. In general I don't have a problem with the salaries until, due to those incestuous relationships, CEOs are getting paid big bucks for failing.

2:51 PM, January 24, 2008  
Blogger Kurt said...

Lately Chairman Hillary has been talking in ads about putting a moratorium or a freeze on foreclosures if she's elected. While I thought that the Bush housing bailout plan was a bad idea, this idea is simply atrocious. I can't imagine what sort of damage that would do to the economy. I wonder how many financial institutions would have to go out of business because they couldn't put an end to their losses through foreclosure. And the sad truth is that many Americans are so ignorant about economics (not to mention history) that they think this sort of pandering sounds like a good idea.

5:23 PM, January 24, 2008  
Blogger tomcal said...

Well I hope she changes the terms of my mortgages, both residential and commercial. I would save a lot of money if I didn't have to pay the bank back.

But on the other hand, it would put the banks out of business. I have banks as tenants - if they go out of business I'll have a vacancy problem. Also, since the banks would be out of business I would never be able to get new loan to finance the growth of my business. Maybe I should reconsider...

Fortunately this whole foreclosure freeze idea is just campaign rhetoric to get the Clintons back in the White House after their 8 year hiatus. It is a lie just like all their other lies, a play to get the ignoramus vote. They know full well what a freeze would do to the economy and would never actually put it in place. So short-term, they really don’t worry me.

Long-term is another issue. They clearly intend to put insidious long term policies, with the following goals, in place:

Chelsea, born in February 1980, will turn 35 in February 2015 (making her eligible to run in the 2016 elections with her mother and father at her side). She will be elected and will formally establish the dynasty in 2017. She will accomplish this by using seemingly innocuous legislation which her parents intend to push through Congress during the next 9 years. The legislation will be contained in riders to a number of bills, any one not appearing threatening, but the sum total changing enough rules to guarantee her election.

Just a thought…

11:35 PM, January 24, 2008  
Blogger Serket said...

I first saw Hillary's quote in Glenn Beck's newsletter yesterday. Not only do the socialists fear the free market, but they want the government to have an even bigger budget than it already has. It is very scary and we are definitely in danger of economic collapse. I also think it is interesting how she uses hatred of Bush to promote her agenda. Want to implement a new policy? Just say that Bush oppposes it.

Gossypol - I am surprised that with parents like these, Chelsea became an important figure at an investment company, but your explanation is intriguing.

Steven - I heard there was flooding in some areas of North Korea and the people were risking their lives to save pictures of their Dear Leader. I have an uncle who was adopted from South Korea, near the northern border.

the ob: She also endorses shifting the tax cut away from the > $250,000 set in order to increase it for people under that, which actually makes a certain amount of sense as a job stimulus package.

While poor people are more likely to buy goods, rich people are more likely to create jobs. I believe Bush has tried the stimulus approach twice and it led to success. A "bonus" for the poor people will create a temporary boon, but allowing a better environment for new jobs will create long term improvement.

Mitt Romney is falsely perceived as being good with the economy. During his term taxes were raised and job growth was ranked 46th in the nation. I imagine the misunderstanding comes from his wealth, but would George Soros make sound economic policies?

I've noticed that there seems to be an increasing amount of Republicans who oppose free trade agreements and do not trust the Federal Reserve.

br549, I remember one of my professors talking about the Democrats wanting oil profits and at the time McDonalds had a really profitable year and he wondered why there weren't clamoring for that money.

6:10 PM, January 25, 2008  
Anonymous Anonymous said...


Eating at McDonald's contributes to an earlier than natural death. Less people reaching S.S. age.

8:47 PM, January 25, 2008  
Blogger tomcal said...

The earlier death caused by eating at McDonalds will also provide years of employment for lawyers working "American Obese vs. McDonald's Corporation". The massive body of plaintiffs in this soon to be filed case will dwarf all previous classes in class-actions.

3:15 AM, January 26, 2008  
Blogger the green goober said...

CEOs demand the salaries they are given because you need someone with that level of experience running your company. And if you don't pay them competitively they will be snatched by a head hunter for another company. It's really that simple- the economy naturally figures this out on it's own. Hillary needs to be tied to a chair in an economics class before speaking again.

1:29 PM, January 26, 2008  
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