Income Disparity and CEO Compensation - Who's to Blame?

Check Out the CEO's Paycheck - RF CafeI am not of the Occupy Wall Street (OWS) mindset, but an honest assessment of the income disparity between the Haves and Have-nots has indisputably increased considerably in the last decade or so. A recent report by the good folks at EE Times culled data from sources like Roosevelt Institute, IC Insights, and the AFL-CIO to present the rather shocking reality of modern day global caste systems (my characterization) firmly in place. In summary, average pay for 2012 including salaries, bonuses, perks, stock awards, stock options and other incentives for CEOs of the U.S.'s 327 biggest companies was $12.3 million. By comparison, the 2012 average yearly pay for the private sector was $44,300 per the Social Security Administration, and for government employees it is $78,500 (77% higher than private sector). It leaves me conflicted where on the one hand I embrace the concept of free market capitalism with its emphasis on innovation and competition, while on the other hand I abhor the dishonest and underhanded actions of the duly anointed.

Deciding how much someone should be compensated for services rendered is, in a democratic society, the domain of those who are the consumers of and elsewise benefactors of those services. In many ways a service is a product, or good, so all bases are covered in the discussion of compensation. As citizens lose - or in our case cede - control of the government, atrophy occurs and economic rigor mortis sets in. Power brokers move in to exploit assiduity on the part of We the People. A ruling class then is free to do as they please, including the dissolution of hard-fought-for fair treatment in the workplace. The result is what we have today with blame being shared by the brain-dead proletariat and the opportunist corporate titans. Roman Caesars pacified their societies by tossing free bread to colosseum crowds during public butchering displays of undesirables (non-Romans) to take their minds off the Praetorian Guard's behind-the-scenes butchering of fellow citizens. Likewise, contemporary power brokers - presidents, senators representatives, governors, CEOs, union leaders, et al - keep the sheeple subdued with ever-increasing levels of handouts like free cellphones, food stamps, health care, education (term used loosely), housing subsidies, clothing, and much more. It works. They even permit and pretend to support popular demonstrations like OWS as long as there is no meaningful ramifications to the activities.

In ancient days when kings, tyrants, emirs, and czars ruled the world, that is to say before the creation of democracies and representative republics where the populace had meaningful input into the affairs of government and business, income and opportunity were based more on the fortune or misfortune of birth - or in the case of warfare, the mightier force. The birth of the United States of America with its founding documents, inclusive of the Declaration of Independence, the Constitution, the Federalist Papers, and various writings of John Locke, Charles de Montesquieu, et al, for the first time in human history codified the rights of the citizens, aka "We the People," to be a self-governing entity. It was able to choose its representatives for legislative matters (Senate and House of Representatives) and its head of state for administrative matters (president). The third branch of government which tends to judicial matters (Supreme Court), is appointed and approved by the other two branches - ostensibly representing the will of the people who put them in office in doing so. No such government had theretofore existed on the face of the Earth.

The U.S. Constitution was deliberately worded to severely restrict the ability of all three branches to impose laws that go against the will of the People. It attempted to include the good and exclude the bad aspects of governments as experienced by mankind throughout history. Incumbent upon the People for successful execution of the Founders' plan is to exercise due diligence in oversight and apply proper admonition to and prosecution of government officials as necessary to preserve the Republic. An eerily prescient Benjamin Franklin, having completed his work at the Constitutional Convention in Philadplphia, is said to have told a lady when asked what form of government had been established, "A republic, if you can keep it."

That the American Experiment was a resounding success is undeniable to an intellectually honest observer. Yes, mistakes were made along the way, but the concept of personal and religious freedom, minimalist government intervention, rugged individualism, a reformed judicial system, protection against seizure of personal property, etc., allowed the people and therefore the nation to thrive. During the Industrial Revolution (born in Great Britain), coincident with America's first century, those freedoms fostered great advances in society that launched the country as a major player in world affairs. Immigration to America increased greatly as foreigners sought to be unshackled from oppressive governments that stifled individual accomplishment outside of chosen educational and industrial realms. By the time World War II rolled around, people were ready and willing to assume the leadership role necessary to beat back the aggressive advances of Old World nations, even with the significant disadvantage of doing so with two great oceans lying between the three major theaters of operation (European, North African, and Pacific). America claimed not a single square inch of land as victor anywhere in the world.

Significant advances were made during the ensuing years in the areas of human rights, science, medicine, engineering, education, transportation, and quality of life - including better work conditions and higher pay. Then, We the People, growing fat and lazy (both figuratively and literally), began resting on our collective laurels and found more time to worry about what the neighbors had and what we didn't have. Politicians seized the chance to profit from class envy and abetted the replacement of hard work and ethical attitudes with envy and slothfulness. It wasn't enough anymore to promise just "a chicken in every pot;" instead, everyone had a "right" to not just the chicken but also a pot, all the trimmings, and an oven to cook it in... and maybe eventually a chef to do the cooking (sounds a bit like socialized medicine on our doorsteps now, where doctors are the chefs). All that is required in return for the favors is that you continue to vote for the people who promise to take more from your neighbor and give the fruits of his labor to you. Eventually a point is reached where more people are available to vote for confiscation than there are to vote against it. We have crossed that mark.

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage." -- original author undetermined, often attributed to either de Tocqueville or Tytler.

Now that the majority of the country is effectively subdued through threat of withholding government bestowals, the ruling class is free to have its way with us. What 501(c)(3) tax classification has done to silence organizations against political opposition, the aforementioned list of handouts has done to citizens. Like Sentinels waging relentless attacks against the hull of the Nebuchadnezzar, so do the minions of the world's controlling elite wage relentless attacks against America and other countries.  I do not hold out much (if any) hope for change; there will likely be no sequel where the good guys win.

Posted  December 26, 2013