Query by BigBubbaLove: Is this the legacy of Ronald Regan, the Republicans, and the GOP?
http://finance.yahoo.com/profession-work/write-up/107069/spend-dirt-the-executive-spend-technique-is-broken?mod=profession-salary_negotiation
The Regan Administration took away the majority of restrictions on corporations. This led to rampant corruption at the corporate level and unreasonably huge CEO compensation.
Right here is a quote from the write-up
“It wasn’t usually like this.
From the Excellent Depression until the late 1980s, CEO spend levels stayed pretty continuous. Adjusted for inflation, a CEO in 1988 earned as significantly as one did in 1934, according to analysis published in 1990 by Michael Jensen and Kevin Murphy. ‘We are confident that the causes are systemic,’ they wrote. With no ‘the creation of a new regime in compensation practice’ far more organizations could get into trouble because of skewed incentives, they added.
So why has CEO spend surged so drastically since the late 1980s? A lot of authorities blame the following: Golden parachutes, annual stock-choice grants, peer-group comparison surveys and reaction to new government regulations.
The two compensation experts re-visited the problem in 2004 in the wake of the Enron scandal and concluded that factors had changed “substantially” for the worse.”
So the query.
Is this entire monetary crisis the outcome of “Reganomics”? Of rewarding the wealthy and expecting to have the billions of excess CEO compensation trickle down to the typical worker?
Bill G.
That is not how a free of charge market is supposed to work. A cost-free industry is based on provide and demand, not CEO compensation and corporate bonuses. Besides, if you study the post, you would comprehend that the problem is systemic. All CEO’s do this, thus, it is impossible to quit acquiring their items as you recommend.
To all,
I refer to Reganomics, or the economics of rewarding the rich with the belief that they will bring up the rest of the nation.
OH, and by the way. That neighborhood reinvestment act which you trumpet so loudly by no means triggered this dilemma. That act accounted for less than 2% of the total bad loans given by banks. Stop blaming the poor on the problems the wealthy triggered. The problem was that CEO’s had as well a lot incentive to dish out loans. This result in them to leverage a lot more than they had. They did this so they could get their golden bonuses.
Sorry. I am proper! And so is Warren Buffet, who argued this extremely very same thing.
Best answer:
Answer by Atheist in the Foxhole
Reaganomics sucked then, and they suck now.
What do you consider? Answer beneath!
