Poor CEOs cannot live on $500,000 a year

[Regulus Tera]

Will someone think of the CEOs? They might have to do normal people things! (http://www.nytimes.com/2009/02/08/fashion/08halfmill.html?_r=2)

PRIVATE school: $32,000 a year per student.

Mortgage: $96,000 a year.

Co-op maintenance fee: $96,000 a year.

Nanny: $45,000 a year.

We are already at $269,000, and we haven’t even gotten to taxes yet.

Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.

“As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are also at zero at the end of the year with credit cards and mortgage bills that are inescapable,” said Holly Peterson, the author of an Upper East Side novel of manners, “The Manny,” and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group. “Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.”

Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.

Few are playing sad cellos over the fate of such folk, especially since the collapse of the institutions they run has yielded untold financial pain. But in New York, where a new study from the Center for an Urban Future, a nonprofit research group in Manhattan, estimates it takes $123,322 to enjoy the same middle-class life as someone earning $50,000 in Houston, extricating oneself from steep bills can be difficult.

Therefore, even if it is not for sympathy but for sport, consider the numbers.

The cold hard math can be cruel.

Like those taxes. If a person is married with two children, the weekly deductions on a $500,000 salary are: federal taxes, $2,645; Social Security, $596; Medicare, $139; state taxes, $682; and city, $372, bringing the weekly take-home to $5,180, or about $269,000 a year, said Martin Cohen, a Manhattan accountant.

Now move to living expenses.

Barbara Corcoran, a real estate executive, said that most well-to-do families take at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes.

Total minimum cost: $16,000.

A modest three-bedroom apartment, she said, which was purchased for $1.5 million, not the top of the market at all, carries a monthly mortgage of about $8,000 and a co-op maintenance fee of $8,000 a month. Total cost: $192,000. A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.

Many top executives have cars and drivers. A chauffeur’s pay is between $75,000 and $125,000 a year, the higher end for former police officers who can double as bodyguards, said a limousine driver who spoke anonymously because he does not want to alienate his society customers.

“Some of them want their drivers to have guns,” the driver said. “You get a cop and you have a driver.” To garage that car is about $700 a month.

A personal trainer at $80 an hour three times a week comes to about $12,000 a year.

The work in the gym pays off when one must don a formal gown for a charity gala. “Going to those parties,” said David Patrick Columbia, who is the editor of the New York Social Diary (newyorksocialdiary.com), “a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she’s not going to wear the same dress.”

Total cost for three gowns: about $35,000.

Not every bank executive has school-age children, but for those who do, offspring can be expensive. In addition to paying tuition, “You’re not going to get through private school without tutoring a kid,” said Sandy Bass, the editor of Private School Insider, a newsletter that covers private schools in the New York City area. One hour of tutoring once a week is $125. “That’s the low end,” she said. “The higher end is 150, 175.” SAT tutors are about $250 an hour. Total cost for 30 weeks of regular tutoring: $3,750.

Two children in private school: $64,000.

Nanny: $45,000.

Ms. Bass, whose husband is an accountant with many high-end clients, said she spends about $425 every 10 days on groceries for her family. Annual cost: about $15,000.

More? Restaurants. Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can’t look like a slob.

The total costs here, which do not include a lot of things, like kennels for the dog when the family is away, summer camp, spas and other grooming for the human members of the family, donations to charity, and frozen hot chocolates at Serendipity, are $790,750, which would require about a $1.6-million salary to compensate for taxes. Give or take a few score thousand of dollars.

Does this money buy a chief executive stockholders might prize, a well-to-do man with a certain sureness of stride, something that might be lost if the executive were crowding onto the PATH train every morning at Journal Square, his newspaper splayed against the back of a stranger’s head?

The man would certainly not feel like himself on that train, said Candace Bushnell, the author of “Sex and the City” and other books chronicling New York social mores.

“People inherently understand that if they are going to get ahead in whatever corporate culture they are involved in, they need to take on the appurtenances of what defines that culture,” she said. “So if you are in a culture where spending a lot of money is a sign of success, it’s like the same thing that goes back to high school peer pressure. It’s about fitting in.”

By the way, the frozen hot chocolate costs $8.50.

Their pain is our pain too.

[Lord Setheris]

The wealthy learned to hide from the waking reality that we all face day to day. Now they will be brought back into the fold. While I acknowledge the challenges they will be facing, here is the fact. If you took federal bailout money for your company, you have no right... NO RIGHT to continue to live like a king. You will take what we are willing to share, and be proud of it.

[stefan]

Boo Fucking Hoo. too expensive to keep living in your palace? then move the fuck out and go live somewhere where it isnt so expensive. everyone else in the fucking country does, the rich have no excuse. I hate to act like THIS, but if they were in almost any other country in the world when they pulled this shit they'd have already had them and their family lined up against a wall and shot for their stupidity, so they have no fucking right to complain about not being able to live like a king.

I mean, really? you complain that you'd be unable to save money when you walk around in 1,000 dollar suits and hire 45,000 dollar nannies? I hate to break it to you, but a 1,000 dollar suit doesn't look THAT much better than one you get at the department store, and as for nannies, everyone else makes do by hiring the teenage girl next door. and really, ski vacations? FUCK no. maybe if your kids start to complain about not being able to go skiing anymore, you can have the balls to admit that its because you fucked the whole country up and you practically had to have a gun against your head to realise it.

[viale]

but what I'm interested in knowing is. Where are their monthly membership fees to Iluminati, New World Order and Alien takeover showing?

It must be expensive to secretley finance global domination.

[G.I.R.]

How am I supposed to feel sorry for someone who received a yearly bonus that is in the six figures? Someone who tries to use bailout money to buy a fucking private jet with leather seats and a customizable entertainment center. Someone who hosts fucking Squash tournaments... that's right... SQUASH. Fuck them and their boo hoo crying. In a time where unemployment is at an all time low, they should be fucking thanking US for what they get.

If you ask me, I think these companies should be left to their own devices and allowed to collapse in on themselves. Let these CEOs and big whigs learn what its like to live like a real human being. Learn that when you squander money, you don't get to have more money.

Bunch of pissy, asshat crybabies.

[Raiden]

...

I am fairly certain I would kill people to get $500,000 a year. That's not even a joke. I'm working at least two part-time jobs at any given time just to scrape by tuition, bills, and taxes.

Living like kings is for those who have the skill to deserve it. They have proven that they do not have it. Screw 'em.

[Karrrrrrrrrrrresche]

Boo Fucking Hoo. too expensive to keep living in your palace? then move the fuck out and go live somewhere where it isnt so expensive. everyone else in the fucking country does, the rich have no excuse. I hate to act like THIS, but if they were in almost any other country in the world when they pulled this shit they'd have already had them and their family lined up against a wall and shot for their stupidity, so they have no fucking right to complain about not being able to live like a king.

...You can't really mean that right?

Are you honestly saying that you think that just because in some countries that's how the government responds to such things, that they should...

I don't even know.

Goddamn man. At the surface, yeah, they shouldn't really be complaining. But drawing that comparison is just flat out nonsensical. The standards of human rights in America are what they are, and just because some countries in the world are run by complete psychopaths, that doesn't mean everyone run by the sane and (for the most part) righteous should adhere to a lower standard than they feel they're entitled to.


I'm not saying that they DESERVE better, or that they even really deserve what they're getting, but they damn sure have the right to bitch about if they want.

[Mirai Gen]

Oh man, I feel so sorry that this guy might have to trade in his Rolls Royce for a car that's slightly less absurd to make us average guys not have to work two jobs.

And who will pay the personal trainers?! They might have to sign up for a gym!

This sort of selfishness by us normal people is just not fair!

[MasterOfMagic]

They might have to drive themselves now? OH NOES. I'M SO UPSET. Can't you tell how upset I am? I'm bawling.

Baw, Baw.

EDIT: It'd be different if they weren't taking billions of dollars from us to fix the companies they screwed up. But even then, 250k after taxes is still a lot. My dream salary isn't even that much (Before taxes). Jesus.

[stefan]

...You can't really mean that right?

Are you honestly saying that you think that just because in some countries that's how the government responds to such things, that they should...

I don't even know.

Goddamn man. At the surface, yeah, they shouldn't really be complaining. But drawing that comparison is just flat out nonsensical. The standards of human rights in America are what they are, and just because some countries in the world are run by complete psychopaths, that doesn't mean everyone run by the sane and (for the most part) righteous should adhere to a lower standard than they feel they're entitled to.


I'm not saying that they DESERVE better, or that they even really deserve what they're getting, but they damn sure have the right to bitch about if they want.

my point was that I don't like making comparisons like that, but really. what they did was practically legal treason, and they're bitching about not being able to have a chauffeur?

[G.I.R.]

They can bitch about it all they want. But no one's going to listen to them or comfort them. They don't deserve that.

I'm sorry... 10-15,000 for a DRESS? And at least 5 a year... that's insane! I have trouble buying a new knife set for my house because its 50.00 when I could be spending that on my bills instead. One of those dresses could pay off the remainder of my car and still leave me money to live on for quite some time! 3 of those "dresses" that Mrs Rich-ass buys add up to more than what I make in a year. That's not right at all. Go shop at JC Penny or something for a change.

It's just not right.

[Bells]

No pity for the fools i see...

Just wait a bit longer, you'll see some of those guys coming out with "now that our paychecks are cut back, we can no longer keep with our donations to aaaaaaaall those charities!"

[stefan]

No pity for the fools i see...

Just wait a bit longer, you'll see some of those guys coming out with "now that our paychecks are cut back, we can no longer keep with our donations to aaaaaaaall those charities!"

oh, that reminds me! the article makes a big deal about how much they pay in taxes. most of these people don't pay taxes, they donate so much money to themselves that they can deduct their taxes away.

[Kaneda]

They do have a minor point in that shit is more expensive in NYC than it is elsewhere. But really, the fact that the city has so many good public schools pretty much counters that.

[Bells]

oh, that reminds me! the article makes a big deal about how much they pay in taxes. most of these people don't pay taxes, they donate so much money to themselves that they can deduct their taxes away.

Now, ok, im totally into cutting back their salary and all that jazz... but i'm never ok with taking a entire group and affirming a certain behavior. Sure as hell most super-rich people do stuff of that sort, some of them BECAME super-rich because of those loopholes that exist in all man-made systems ( justice and economy ) the just had the opportunity and tools to exploit them when the time was right...

but that's not to say that every single person with money is a corrupt money-laundry S.o.B. , right?

Well, it's fair to say that a minority of the people have the majority of the money... so aside from what the article says or points to, i'm more interested on seeing where the rest of this money will go once this cut-back starts

[Magus]

They shouldn't have bought anything that cost more than they make in one or two years. This is a good rule for anyone, including multi-millionaires. Then again I'm talking from the perspective of someone who if faced with buying a new car that cost 20,000 dollars would have to think about that in terms of "will I make 20,000 dollars this year, free and clear?" The answer for a lot of people is no. They have to include all the other payments in that. Which is why I said 2 years because otherwise most people would never get a new car that cost 20,000 (to be fair, I wouldn't get a new car that cost over 15-16,000 because I am cheap).

These people can live on 500,000 a year, they may not be able to maintain the lifestyle they are used to, but the idea that they are going to starve is absurd. A fire sale on their houses would bring in enough to buy a 10 houses of the average person, so maybe they can just buy one that's the equivalent of 5 houses of the average person? Maybe? Just maybe?

EDIT: "By the way, the frozen hot chocolate costs $8.50." Now THAT is just decadent. And oxymoronic.

I think we poor folks just call that a milkshake, but who am I to say?

[Donomni]

You know that Japanese executive I posted about in the video thread?

Laughing his ass off.

[Wigmund]

This just brings tears to my poor eyes.

I'd love it if they just go all the way with this - don't just limit it to those receiving government aid. Make it for all corporations and large businesses doing business in the US. Seems justifiable to say that the President should be the top money-earner in the country.

Better yet, salary cap all execs into making no more than 10 times the pay at 40 hours a week of the lowest paid person that works for (regardless of full-time, part-time, or temp) or is contracted for work by the company (includes their janitorial crews, better start paying those migrants a decent wage guys). I'd love to see the CEO of Wal-Mart only make about 150 grand a year*.

* I figured a minimum wage employee at $6.25 an hour, 40 hours a week, 52 weeks a year - that's a little over $14,000 a year. While part-timers and many others work less than 40 hours a week, I'll be somewhat nice to their bosses

[Aanaren]

I'm sorry, but $500,000 is an awful lot of money to me. That's more than I've made pre-tax in my years working, and I've worked decently paying jobs for the areas I've lived in. $265,000 is still a pretty nice chunk of change when you're an lower-middle class person.

When the rest of us have to take a new job at a lower salary/take a pay cut we adjust to live within our means. Looks to me like it's time for them to do the same. There are times we struggle to pay the bills, more so now than ever, so it's a bit hard for me to have sympathy for them. Seriously oh no! How will they afford their vacations? I haven't been away on a vacation in over five years. I drive my own (paid for) car.

Seriously, does anyone else think there's something blatantly wrong when your HOA fees are the same amount per month as your mortgage?

[Grand Master Kickface]

I admit that I hardly know anything about economics, but how does putting a cap on how much money certain people can make solve anything? It's not like the money automatically just goes to the poor, does it? And if it does, should we really be rewarding people on the virtue of being poor and punishing people for being successful? (Not that I'm standing up for the economic status quo; I'm just throwing this out here.)

Going on a tangent here, I went to a private high school but a publicly funded college, and the quality of education I got in high school was light years ahead of what I got in college. In high school, I had teachers that were competent and knowledgeable in their subjects, made their material clear and easy to understand, and made their expectations of you equally clear. And even if that wasn't enough, they'd always be willing to meet with you and give you help personally. It was enough to make me *gasp* enjoy some of my classes. You know what I got in college? Idiot teachers. Half of them were reading from a manual the whole time, and all of them had a lot to say about the popular political matters at the time... except that it didn't have anything to do with the class they were supposed to be teaching. The college had a lot of programs designed to help students that were falling behind, but these programs didn't do anything: they only served to make the students temporarily feel better about themselves and to give the school a good image. So, to me, being forced to go to a public school just because your dad is too successful doesn't really ring to the ears.

Look, I'm not sticking up for our current system of deciding who gets to be rich and who gets to be poor. Frankly, I think we have to recreate the entire system from the ground up. And thusly, I don't think imposing a bunch of limits and convoluted rules within a fundamentally broken system will accomplish anything. But I'm still willing to hear you guys out if you honestly have a good reason to support this bill.

Edit: I'm not siding with the article either. The frozen hot chocolate line is ridiculous. >_>

[Marelo]

I'm not sure where we're supposed to find the sympathy here. Honestly. Surely even the people who are losing this money don't actually think this way. Surely?

I read that article, and I just could not find myself thinking that it was anything other than a satire. Surely it was a sarcastic editorial! No, no, it's entirely serious.

All I have to say is, what. the. fuck. If that's how our upper class view the world, maybe our country really is doomed to follow Rome's example.

Edit: Going on a tangent here, I went to a private high school but a publicly funded college, and the quality of education I got in high school was light years ahead of what I got in college. In high school, I had teachers that were competent and knowledgeable in their subjects, made their material clear and easy to understand, and made their expectations of you equally clear. And even if that wasn't enough, they'd always be willing to meet with you and give you help personally. It was enough to make me *gasp* enjoy some of my classes. You know what I got in college? Idiot teachers. Half of them were reading from a manual the whole time, and all of them had a lot to say about the popular political matters at the time... except that it didn't have anything to do with the class they were supposed to be teaching. The college had a lot of programs designed to help students that were falling behind, but these programs didn't do anything: they only served to make the students temporarily feel better about themselves and to give the school a good image. So, to me, being forced to go to a public school just because your dad is too successful doesn't really ring to the ears.

Going along with your tangent: I'm currently attending a publicly funded institution, and I have not encountered the problems you have. Maybe I've just been lucky with the professors in my classes, but they pretty much all fit the description of your high school teachers, whereas my high school teachers (also publicly funded) fit the description of your college professors.

The thing is, I don't think the quality of the teacher should matter at the college level. If a student really wants to learn the subject, they can do so despite a terrible teacher. I did in high school, many times over, and I'm not superhuman by any means. That's not to say that a good teacher is not an advantage; merely that I don't see a bad teacher as much of a hindrance to a good student.

And to keep this a bit more on-topic, I don't think that education at certain places should cost the ridiculous premiums it does currently. A good student from a state institution is perfectly capable of performing on the same level as a good student in a private institution. It's like paying $200 for Diesel brand jeans. Ridiculous. The difference between state and private comes when you look at the average students... The people who aren't particularly motivated to learn anyway. They are the ones who pick up more in private schools versus state schools. I see that as a parenting problem more than a problem with state schools; in other words, I think parents should work harder to make their kids better students.

[Azisien]

I guess I can't speak for US cases or much of anything without digging, but on the grand scheme of things I would say if you've made it up the chain to a CEO position of a banking firm you must have some education or training of some kind that would qualify you to some decent salary.

That being said, let them burn. And a pat on the back for anybody who suggests salary caps on fucking everything.

[Mirai Gen]

I guess I can't speak for US cases or much of anything without digging, but on the grand scheme of things I would say if you've made it up the chain to a CEO position of a banking firm you must have some education or training of some kind that would qualify you to some decent salary.
I'm pretty sure that's completely true, the problem is since there's no salary cap you can get that sort of job with a great college education around mid-late twenties or early thirties, and get raises and bonuses every few months like clockwork, so when you live to be about sixty-seventy before you retire you're soaking up hundreds of thousands of dollars every year. The job itself is - theoretically - supposed to be about high-stress and lots of very big decisions, justifying the money.

In practice this ends up getting abused horribly, of course. And I honestly don't know what could be so high stress about getting together every day and sneering while twirling your moustache, sipping expensive drinks and deciding, "Mmm, yes, let us make more money and fuck the little guy over simultaneously! Mwe he he he!"

This happens with baseball as well, but I think that the NBA and NFL have a salary cap? I'm not sure, it was a while ago when I wrote the essay on pro sports finances.

That's as I understand it anyway.

[Ryanderman]

I'm all for this cap on banks that take the money, as it will provide a large incentive for the banks to not take the money unless absolutely necessary. Reducing the otherwise inevitable rush to the trough of free money.

[Mesden]

I admit that I hardly know anything about economics, but how does putting a cap on how much money certain people can make solve anything? It's not like the money automatically just goes to the poor, does it?

Kind of does. The money would, instead of grossly overpaying CEOs for failing businesses, go back into the failing business to keep it afloat. Which means instead of laying off thousands of workers because all the CEOs make more than all their workers put together (Just in bonuses!), they can, you know, keep those workers hired on, thus employing poor people.


And if it does, should we really be rewarding people on the virtue of being poor and punishing people for being successful? (Not that I'm standing up for the economic status quo; I'm just throwing this out here.)

Wellllp this is exactly the opposite of what's happening. These people are getting bailouts for being unsuccessful. We shouldn't pay them seven figure salaries with six figure instant bonuses because they took our money almost forcibly because they failed their vital business.

Edit: I'm not siding with the article either. The frozen hot chocolate line is ridiculous. >_>

Pretty sure the article is satirical. The New York Times isn't known for pitying poor, poor millionaires.

[synkr0nized]

So I was listening to NPR briefly about a week ago, and this guy who was some kind of adviser for these folks was on talking about how they are all accustomed to the lifestyles that million-dollar salaries provide up there and that this cut-back in salaries would just lead to them taking their talents elsewhere, such as to private firms that would not be restricted. He also went on to talk about how many folks were claiming that the wording wasn't clear on who counted as senior executives, leaving many at levels that would probably not be affected to retain half-million or higher pay. He also, while fully acknowledging that these executives were likely to find no sympathy outside of their own circles, emphasized more than once that this was their way of life and to expect them to accept the posted limit or less was ridiculous.


:V

I can certainly think of many things I'd do with that kind of money, perhaps exorbitant in many ways, but I cannot see that one "must" live in such excess. I can see them complaining that it's cutting back on what the established reward and compensation systems have been set for their work and talents, but I, too, must protest the idea that anyone might be sympathetic to their 'plight."


The cautions that this may drive many to seek other places of employment and that many executives will likely still receive excessive pay consistent with their job and business are pretty valid, though.

[Wyndon]

You know what?

Give them their money. They should get whatever money they ask for.

But in compensation, I want to be able to kick every one of those CEO's, legally, in the face as hard as I want, for paying for those bastards to waste my tax money on dresses.

I would be happy.

In fact, EVERYONE should get a free kick at each of their faces.

[Osterbaum]

It's not like the money automatically just goes to the poor, does it? And if it does, should we really be rewarding people on the virtue of being poor and punishing people for being successful?
I don't think it is right to simply assume that poor people are poor because of their own fault. Just as much it is possible for rich people to not really be responsible that much for them being rich. And vice versa. And be it either way, paying the poor is called aid. It's to help them out, not to "reward people on the virtue of being poor".

Going on a tangent here, I went to a private high school but a publicly funded college, and the quality of education I got in high school was light years ahead of what I got in college.
In my experience, university education is often somewhat less of good quality because the professors and assistants doing the teaching aren't actually teachers.

Commenting on the article, I think it's ridicilous. Frankly it makes my blood boil. How am I supposed to feel sorry for them? 500 000 000 is still a shit load of money to make during the course of a year. We all know how many things are wrong here and I'm not going to waste anyones time by typing them all. This is just seriosly fucked up.

How dare they for crying out loud!

[Fifthfiend]

I can certainly think of many things I'd do with that kind of money, perhaps exorbitant in many ways, but I cannot see that one "must" live in such excess. I can see them complaining that it's cutting back on what the established reward and compensation systems have been set for their work and talents, but I, too, must protest the idea that anyone might be sympathetic to their 'plight."

I think it wouldn't be so bad if the entire reason we were handing them all this money weren't that their talents and work have been shown to only have value in negative (massively, unimaginably negative) amounts.

[Mirai Gen]

Oh, man, it just hit me.

Does it strike anyone else as hilariously ironic that these guys are saying that they can't take a salary cap because they don't want to put their kids in public schools?

[Wigmund]

Oh, man, it just hit me.

Does it strike anyone else as hilariously ironic that these guys are saying that they can't take a salary cap because they don't want to put their kids in public schools?

Because then they'd have a reason to support funding for said public schools.
And their children would most likely be to going to the same public schools as the kids of the migrant landscapers and housekeepers they employ.

[Kepor]

So, the pay cap's going to apply only to those companies that take government money. As it should; they use government funds, they'll have to play by the rules. But there isn't really any reason to call for pay caps on everyone. There isn't anything morally wrong with making a lot of money, and while a widening gap between poor and rich is trouble for a country, it shouldn't be on those top few to turn that around. Nor would a pay cap necessarily change that.

[Osterbaum]

So, the pay cap's going to apply only to those companies that take government money. As it should; they use government funds, they'll have to play by the rules. But there isn't really any reason to call for pay caps on everyone. There isn't anything morally wrong with making a lot of money, and while a widening gap between poor and rich is trouble for a country, it shouldn't be on those top few to turn that around. Nor would a pay cap necessarily change that.
What would change that if not a pay cap? True, it's not wrong to be rich. But if 1% of people own 99% of the money (These aren't the real figures, it's just an example), then something is very wrong.

[Kepor]

Because it's not necessarily that they possess that much money, but that so much is flowing to them that is the problem. Rephrased: the problem isn't whether or not they do earn that much, but that they can.

Secondly because it's just individuals that control that money, but corporations as well. Large corporations are only about 40% of all businesses (old figure, new one is probably even smaller) but earn about 98% of all business income. That much control over that much capital affords them tremendous power.

[Bob The Mercenary]

The thing that scares me is that if the government starts controlling how much a person can potentially make, and taken even deeper, starts telling companies how to spend their money (i.e. don't buy jets, don't buy office furnishings), doesn't that open the doorway for them to basically control all facets of a corporation? This is just punishing the rich when the entirety of the rich doesn't need to be punished. Just those who undermine our trust and use taxpayer money unwisely. It's up to them how they run their business though.

[Mirai Gen]

This is just punishing the rich when the entirety of the rich doesn't need to be punished.
I think that after our entire country's history of one extreme I'm willing to give the other extreme a try.

[Krylo]

This is just punishing the rich when the entirety of the rich doesn't need to be punished. Just those who undermine our trust and use taxpayer money unwisely.

the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money

So you're saying you one hundred percent agree with this then?

Because the tone is one of disagreeing, and yet you're saying we should do... exactly what we're doing?

Though, honestly, I'd be all for a pay cap of like... 10-20x the amount the lowest paid worker makes. It'd prevent a lot of problems like this from happening in the future.

[Fifthfiend]

I'd settle for undoing the last like 50 years of ever-lower tax rates for the top income brackets because when your public policy becomes 'hey dudes who are already exorbitantly rich please continue hoarding greater and greater wealth forever' it seems like what happens is people start doing any insane thing they can think of to accumulate that wealth no matter how destructive it is to the rest of the nation.

But yeah the idea of a cap on the pay of people who are so terrible at their jobs that they have managed to run our entire economy into the ground doesn't really make me shed little-girl tears or nothin'.

I mean I personally have manged to not be directly responsible for the mass implosion of our entire economic system due to my years if not decades of grossly unethical conduct, all for the low low rate of twenty dollars an hour. If these guys are so upset at the prospect of getting paid five hunrded grand a year for their incompetence, maybe they should quit and someone can hire me and I'll be happy to be utterly incompetent at that pathetically low salary.

[Bob The Mercenary]

So you're saying you one hundred percent agree with this then?

Because the tone is one of disagreeing, and yet you're saying we should do... exactly what we're doing?

Sorry, just did a skim job of this thread before posting. In those words, yes, I agree with this 100%. :D

I feel dumb.

[Jagos]

I just don't see how this can necessarily be good...

A cap on anyone prohibits them from trying to achieve whatever they want for X reason. And the Democratic belief in making the pie more equitable might cause more long term problems. After the crisis is over, will the caps continue to rule in the lands of business? Who would invest in new business if everyone has similar income with no incentive to produce more?

Besides, the millionaires (http://blogs.wsj.com/wealth/2009/01/06/millionaires-lose-30-of-their-fortunes/) are already losing money.

Also, thought I might use this for some older research that I was supposed to do:

SMB, I got a few things on the generation gaps, not necessarily the change of millionaires from the 1 out of 5 name thing from long, long ago. The link I have says there have been a few new households on the right side of the article.

As well, I'm seeing that Gen X are a lot more giving with their money. Though how much they get back in taxes is entirely another story. linkage (http://www.usnews.com/blogs/new-money/2008/9/8/when-it-comes-to-giving-gen-x-trumps-boomers.html?s_cid=etRR-0205)

[Fifthfiend]

A cap on anyone prohibits them from trying to achieve whatever they want for X reason.

And what the people being capped have wanted to achieve is to make themselves grossly richer via a legalized ponzi-scheme that has destroyed the national economy. Seriously I'm not seeing the issue here.

Who would invest in new business if everyone has similar income with no incentive to produce more?

The people who aren't making the fantastically enormous sum of five hundred thousand dollars a year?

[Marelo]

Though, honestly, I'd be all for a pay cap of like... 10-20x the amount the lowest paid worker makes. It'd prevent a lot of problems like this from happening in the future.

That would actually be a pretty good incentive for corporations to pay their lower level workers more... I really like that idea.

[Wigmund]

That's funny, corporations actually giving a damn about the low-wage drones. Next thing you'll say is that the corporations could use the spare money to assist the government with public works improvements on infrastructure, schools, and other needed projects. Or that the corporations could set up scholarships to help the needy to enter college and receive degrees that might assist the corporations.

I love this economic downturn, it looks like it's giving us the benefits of a socialist revolution without actually having to set the rich ablaze. They've done it to themselves. How convenient. :D

[Grand Master Kickface]

Kind of does. The money would, instead of grossly overpaying CEOs for failing businesses, go back into the failing business to keep it afloat. Which means instead of laying off thousands of workers because all the CEOs make more than all their workers put together (Just in bonuses!), they can, you know, keep those workers hired on, thus employing poor people.

Okay, thanks for that. I feel like I understand it a little better now.

the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money

Auuuugh I completely skimmed over this before my first post too. If this only applies to companies accepting bailout money then it makes much more sense.

Though, honestly, I'd be all for a pay cap of like... 10-20x the amount the lowest paid worker makes. It'd prevent a lot of problems like this from happening in the future.That would actually be a pretty good incentive for corporations to pay their lower level workers more... I really like that idea.

Wait... hold on. So CEOs raise the wages of their lowest paid workers so they can indirectly make more money themselves... but all this new money has to come from somewhere, right? Wouldn't the widespread practice of this just cause mass inflation?

[Nique]

Ok I guess capitalism is all well and good but yeah lets not continue letting people abuse it, right?

[Fifthfiend]

Wait... hold on. So CEOs raise the wages of their lowest paid workers so they can indirectly make more money themselves... but all this new money has to come from somewhere, right? Wouldn't the widespread practice of this just cause mass inflation?

Um, you realize they couldn't raise their worker's wages more than the company earns, right?

[The Wizard Who Did It]

Ok I guess capitalism is all well and good but yeah lets not continue letting people abuse it, right?
I'm pretty sure that's how America has been trying to do it. I mean, it's kind of like how America doesn't have a pure democracy, and instead has a representative democracy/republic. It's a lot simpler and more effective than a pure democracy has been projected to be.

In the same vein, we also more or less regulate how our capitalistic policies work (or attempt to, or seem to attempt to, depending on your view of American politics). This takes the form of having laws against things like Cartels, which would be allowed in a pure Capitalistic market.

Basically, this is yanking the CEO's collar further away from the Pure Capitalist line, if anything.

[Grand Master Kickface]

Um, you realize they couldn't raise their worker's wages more than the company earns, right?

...oh.

[Marelo]

That's funny, corporations actually giving a damn about the low-wage drones. Next thing you'll say is that the corporations could use the spare money to assist the government with public works improvements on infrastructure, schools, and other needed projects. Or that the corporations could set up scholarships to help the needy to enter college and receive degrees that might assist the corporations.

I figure they might give a damn if their own pocketbooks are directly tied to the wages of the downtrodden.

Edit: Happy 300th post to moi.

[Wigmund]

I figure they might give a damn if their own pocketbooks are directly tied to the wages of the downtrodden.

They would then; but how sad is it one has to tie the fates of the richest in a company so directly with the fates of the poorest for this to happen?

[stefan]

Um, you realize they couldn't raise their worker's wages more than the company earns, right?

you . . . you haven't been paying much attention to modern business, have you?

[Kepor]

And what the people being capped have wanted to achieve is to make themselves grossly richer via a legalized ponzi-scheme that has destroyed the national economy.

Well, that would be more of a reflection on the business practices of the companies in general rather than the salaries of their top officers, wouldn't it?

Although it is in rather poor taste, I doubt the recession began because CEO's were flying private jets to ask for bailout funds.

Overall though, the pay caps aren't intended to punish the executives, but insure that government money is spent most efficiently. (Even if a massive bailout plan might not be the best way to stimulate the economy, but hey.)

[Mirai Gen]

The only thing preventing me from posting an image of someone staring blankly in shock is the fact that this is now in Discussion.

So, I won't, and just know I'm thinking it, Stefan.

I mean you can't spend more money than you make else you go into debt, and to be a business you have to grow.

[bluestarultor]

Guys, as much as I hate to say it, we're forgetting about the social aspect of this. Having gone to a private school with frankly a ton of prestige and a grand total of maybe two people who didn't have one or more doctorate degrees, I'm well aware that there actually ARE certain things expected out of people of higher classes. This may sound strange coming from a guy whose household income grosses ~$50,000US, but when you're out in the field, you have to play ball. In high-paying jobs, there are simply certain expectations for one's behavior. For something like a doctor or pharmacist, if you don't belong to a country club, you have severe issues on various levels, including a poor reputation and a lack of connections among your peers. The higher up on the pay scale you go, the more important your image is, because it directly influences the connections you hold both within and outside your profession. And those connections are everything. They can net you clients, services, advertising, and basically anything else that could possibly relate to your success.

In short, it sounds good to people like us, but for the people it would happen to, it could mean the utter collapse of their entire career.

To put this in perspective, an analogy. Imagine your life right now, provided you're in a professional environment. If you're not, imagine your life growing up with your parents. I'd say the loin's share of us come/came from middle- or working-class homes. Maybe your PS3 was a group present from your entire family this past Christmas, but life is generally comfortable. You shop at Wal-Mart and Target and all those other seemingly normal stores. Now imagine you get a pay cut. Suddenly, it's a lot harder to afford Target and you have to go to Goodwill and the Dollar Tree. Eating McDonald's becomes more of a norm, where you had the occasional steak before. Mostly, though, you have to eat at home, and your menu features a lot of frozen stir-fry. Normal school is no longer an option, no, your family has to transfer over to "that place" in the inner city, where the kids stop up the drinking fountains with gum and pee in them and the "hall passes" consist of necklaces with colored beads corresponding to individual rooms so the monitors know exactly where you should be heading either from or to during classes. Where your house was always set at a comfortable 72F/22C, you now have it at 65/18 to save on heating bills and 80/27 to save electricity on air conditioning. You have to skip out on your weekly get-together with friends because you can't afford the gas or movie tickets and word starts getting around that you're slipping out of the loop. And you are. Suddenly, when your peers are talking about the greatest new thing to come along, you realize you haven't heard anything about it and try to keep quiet and slink away without being noticed, or maybe stay just within earshot to absorb as much of it as you can in case someone asks you about it so you don't look like a total idiot. And when you do get caught off-guard, they're rather patronizing about it, because they've heard all about your situation and it's only to be expected. But the worst part is the pile of bills on your desk at home, looming over you like a tower of bleached bone. You sell your PS3 for the extra cash you need, trade down your car, and try to postpone the inevitable, losing your home. Sure you can trade that down, too, but the idea of living in a place that could double as a closet if it were bigger isn't appealing. You even go so far as to stop donating to the collections at church for that little bit extra that might add up. Unfortunately, you're kidding yourself. You sell your home and move into a place too tiny to even hold what remains of your stuff. You try to store it at first, but that costs more money. Eventually, you can't afford it anymore and end up selling it. You really liked some of that stuff. Eventually, you adapt. But you know what you had. You had it good before. Maybe if you'd been able to find a job elsewhere nearby, you could have kept it all, but there were just so many people in the same position and you weren't one of the lucky ones. You start looking in broader and broader circles, anyway. Even if you have to leave town, maybe you might find something that pays what you used to get if you keep looking. Maybe you don't find it, but maybe you're lucky and snap up a position not unlike what yours used to be. Sure, you might eventually get back to where you were. It was just stuff, after all. You move across state lines into a hole not unlike what you just left, but you're saving to work back up. It doesn't make you feel any better. More like just dragging yourself from the ground after having been kicked in the balls. Your pride is hurt. And you know that some poor shmuck is going to need to fill your old position. Maybe he'll be happy with it as a trade-up. Maybe he's like you and it's the next best thing...




So, yeah. There's my point. A bit more poignant now, I believe. I'm not saying I wouldn't LOVE to make that much money a year, but I wouldn't be taking a pay cut in the least by doing so. This kind of thing can absolutely ruin a reputation. Yeah, it can be recovered, but the hit can never truly be erased.

[Mirai Gen]

In short, it sounds good to people like us, but for the people it would happen to, it could mean the utter collapse of their entire career.
As opposed to the collapse of everyone's entire economy and massive job loss? Yeah boo friggin' hoo, I'm really sorry that they might have a rough time in their career as opposed to two working parents who lose their jobs.

[The Wizard Who Did It]

Guys, as much as I hate to say it, we're forgetting about the social aspect of this. Having gone to a private school with frankly a ton of prestige and a grand total of maybe two people who didn't have one or more doctorate degrees, I'm well aware that there actually ARE certain things expected out of people of higher classes. This may sound strange coming from a guy whose household income grosses ~$50,000US, but when you're out in the field, you have to play ball. In high-paying jobs, there are simply certain expectations for one's behavior. For something like a doctor or pharmacist, if you don't belong to a country club, you have severe issues on various levels, including a poor reputation and a lack of connections among your peers. The higher up on the pay scale you go, the more important your image is, because it directly influences the connections you hold both within and outside your profession. And those connections are everything. They can net you clients, services, advertising, and basically anything else that could possibly relate to your success.
As a person who has a mother who grew up on a farm and went to public school and became a very well respected doctor at the local clinic, this is more or less BULLSHIT! What you're talking about is people who were born with the money to get into their profession (went into a country club to get clients and connections) rather than working hard and doing their job well enough to get prestige in their profession. You're talking as if this would end people in certain professions, but in actuality it would only end people who wouldn't have earned being in those professions without that money.

In short, people who do well at their job don't need social clubs to get respect and clients.

Also, your VERY long and blocked analogy (paragraphs would have helped, please, you can just use more lines to single it out) really doesn't seem as applicable to people taking a drop to $500k.

[Jagos]

Seriously I'm not seeing the issue here.

Main issue is investments. Granted, the last few years with subprime (http://en.wikipedia.org/wiki/Subprime_lending) results has more to do with some extension of greed. But the fact that there won't necessarily BE anyone to fund new businesses as the money just may not be there is what concerns me.

[Fifthfiend]

Well, that would be more of a reflection on the business practices of the companies in general rather than the salaries of their top officers, wouldn't it?

So there's no connection between the business practices of the companies and the decisions of their top officers? That's what we're going with?

[MasterOfMagic]

I...you...Okay. Here:
“a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she’s not going to wear the same dress.”
A personal trainer at $80 an hour three times a week comes to about $12,000 a year.
A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.
We're talking about losing these kinds of things. You cannot tell me these are necessary for them to keep their jobs and connections. I understand they will miss having these awesome things, but when other people are struggling just to pay for FOOD and a ROOF, directly because of their mistakes, they can deal with it.

[Aerozord]

well I find it stupid that they live beyond their means, but honestly, who doesn't? Our society is based on rampant consumerism. No matter how much you have you want more. People want to live in the manner in which they are accustomed. Take most of the people that post on this forum. Many say as middle-class they are suffering and lack money. Yet these same people are paying for internet, computer, ect.

Thats not to say its a bad idea. However this will quickly be rendered useless when they realize that to get around it they just need to make their bonus come in the form of non-liquid assets.

Besides personally I think politicians are far worse. Atleast CEOs work more then 20 days a year. I mean why does the president need several hundred thousand a year, not only was he rich before hand (like all the previous ones) but he doesn't pay for housing, utilities, security, transportation, heck I'm pretty sure he doesn't even buy his own food.

[bluestarultor]

Look, I'm not saying it's right or that I in any way agree, but I AM saying I can a least see why they're bitching. Nobody likes losing their standard of living.

Twiddy, your mother is living proof that America does offer social mobility, and that's something that everyone can be thankful for. She's earned it. But you can't tell me that people who have money to start with don't have a head start on making more, and I highly doubt that you mom has absolutely no connections now that she's in the professional world. I mean, obviously, she's not spending her time milking cows or harvesting corn, and while she might still have friends who are, those aren't the people who have the most bearing on her career. I'm willing to bet she has connections with other medical professionals now, be they doctors, pharmacists, or hospital management of some sort. In the business world, you have to shmooze at least a little.


Edit: P.S. I realize my little anecdote was on the extreme end. It was meant to be. Helps drive the point better. Trust me when I say I was considering making it far worse with things like cat food and a rat-infested hole of an apartment, but I figured that would just tick people off.

[Jagos]

Besides personally I think politicians are far worse. Atleast CEOs work more then 20 days a year. I mean why does the president need several hundred thousand a year, not only was he rich before hand (like all the previous ones) but he doesn't pay for housing, utilities, security, transportation, heck I'm pretty sure he doesn't even buy his own food.

What's really sad is the fact that it's mainly government that caused this in the first place. To ask them to fix it or for Congress to take a paycut from their $169,000 a year jobs when they can VOTE for a pay raise, practically anytime they want, is just someone deluding themselves that Congress is made up of people who care about us.

[Mondt]

Blue, I think "The government won't give me enough money to meet social class standards" is an okay excuse to not meet social class standards.

I mean, what, are they going to become the laughingstock of Richy-McRicherrichsonville because they aren't allowed to make enough money to be quite that rich? If all they are upholding is an image, then I doubt it. However, if there is other business going on that maybe shouldn't (Or should, I guess, but that's not the point I'm making)? Yeah, it would be an issue.

[The Wizard Who Did It]

Twiddy, your mother is living proof that America does offer social mobility, and that's something that everyone can be thankful for. She's earned it. But you can't tell me that people who have money to start with don't have a head start on making more, and I highly doubt that you mom has absolutely no connections now that she's in the professional world. I mean, obviously, she's not spending her time milking cows or harvesting corn, and while she might still have friends who are, those aren't the people who have the most bearing on her career. I'm willing to bet she has connections with other medical professionals now, be they doctors, pharmacists, or hospital management of some sort. In the business world, you have to shmooze at least a little.
Yes, she has connections now, but the connections are in no way related to how she lives/lived or her former standing in society, like what you said. Her connections were gained entirely on merit of her work. And I'm very certain my mom does not belong to a country club, but I guess there's always the possibility that some type of wool has been pulled over my eyes or it just never came up in my 18 years of living at home, aided by how I never asked.

[Aerozord]

What's really sad is the fact that it's mainly government that caused this in the first place. To ask them to fix it or for Congress to take a paycut from their $169,000 a year jobs when they can VOTE for a pay raise, practically anytime they want, is just someone deluding themselves that Congress is made up of people who care about us.

oh not saying it can be fixed, fact is the american people just have to accept that hundreds of millions of dollars go to people that just plain dont need it. Just that in my opinion corporate execs are not the worst offenders of abusing their position

[Kepor]

I'm well aware that there actually ARE certain things expected out of people of higher classes.

That's certainly true, and one of those expectations is leadership. Complaining of a pay cut in a salary on a scale that most people will never see doesn't win any sympathy points with the public.

Even less so during a recession.

Generally, I think people expect CEO's to act like Warren Buffet; one of the richest men in the world, yet still humble and living (relatively) simply.

[bluestarultor]

Yes, she has connections now, but the connections are in no way related to how she lives/lived or her standing in society, like what you said. Her connections were gained entirely on merit of her work. And I'm very certain my mom does not belong to a country club, but I guess there's always the possibility that some type of wool has been pulled over my eyes or it just never came up in my 18 years of living at home, aided by how I never asked.

I never meant for it to get quite this personal. Everyone is different, of course. But in terms of connections, I wasn't talking about the ones that get you to a place. Those are reserved for old money. The connections I was talking about are the ones like your mom has, which keep you afloat when you get there. To put it this way, if she didn't have friends in the business, it would be harder for her to learn about new medications or procedures, or maybe new diseases cropping up. She could, but she'd have to do a lot more work for it. I might even hazard that some of her connections, or at least some of her earlier ones, were with people she encountered in school one way or another. Professors can be instrumental in placing their students, if they actually know them and can vouch for them. Likewise, she my have tried to keep in contact with some of her classmates and it's possible some of them stuck.

As for country clubs, I was just using that as an example. I assure you, you'd know if she belonged to one, because the entire point is to actually go there in your free time to connect/shmooze/do business on the napkins/whatever. Technically speaking, as far as I've heard, doctors are actually considered upper-middle class, which surprised the heck out of me, but whatever, so that kind of profession is probably on the cusp of that sort of thing? When it comes to CEOs, there's probably a bit less of a divide on who belongs to one and who doesn't.

[Marelo]

They would then; but how sad is it one has to tie the fates of the richest in a company so directly with the fates of the poorest for this to happen?

Pretty sad, yeah, but a cursory look at human history reveals a lot of pretty sad stuff. I think it's safe to say that we're capable of such depravity, and that working to fix it is better than pretending we're not terrible sentient beings.

Edit: Yeah, I dunno, Blue. Your analogy just doesn't work from our end of things. There's a huge difference between going from 750k to 500k and going from 40k to 20-30k. There's a point at which the actual numbers don't matter for any reasonable concern, and exist solely for bragging rights; and that's what I'm seeing your anecdote as boiling down to. It seems that you think their bragging rights are important for them to do their jobs.

I mean, look at it this way: Say you can play Crysis at 60 fps. Someone comes along and brags about playing at 120 fps. Boo freakin' hoo. You couldn't tell the difference between the two without looking it up. Now, you can, of course, tell the difference between 5 fps and 20 fps.

In the same manner, sure, the people cut to 500k salaries won't be able to afford as many shiny baubles and expansive homes... But how many shiny baubles can they wear in a year? How many expansive homes do they need to occupy from month to month?

Compare that to how much the people in your anecdote need better food and more comfortable living arrangements... I just don't see a proper analogy here.

[Nique]

Basically, this is yanking the CEO's collar further away from the Pure Capitalist line, if anything.

I think that's what I was saying? I think everyone's chomping at the bit here :P

Also; Bluestar, I think the system your describing is sort of the problem though, isn't it? You get more respect/connections based on your money penis rather than how much you help people or how proficient you are in your field? I think there's something not ok with that. I guess I can understand and sympathize with any individual in a high-pressure social situation, but I think that entire attitude about money is just far too askew.

[Jagos]

In the same manner, sure, the people cut to 500k salaries won't be able to afford as many shiny baubles and expansive homes... But how many shiny baubles can they wear in a year? How many expansive homes do they need to occupy from month to month?

For argument's sake, won't this extend the recession?

[Marelo]

For argument's sake, won't this extend the recession?

What, capping them, or not capping them? I'm confused on what you mean.

[Kepor]

A decline in salary leading to a sharp reduction in consumption of luxury goods, a market which has far more elasticity of demand than supply?

[bluestarultor]

A decline in salary leading to a sharp reduction in consumption of luxury goods, a market which has far more elasticity of demand than supply?

Let's not kid ourselves here. Luxury goods are made by other rich people. It's passing the money around over a glass ceiling WAY over any of our heads.

[Kepor]

Let's not kid ourselves here. Luxury goods are made by other rich people. It's passing the money around over a glass ceiling WAY over any of our heads.

I have not heard of this. Could you explain a bit more?

[BitVyper]

No pity for the fools i see...

Just wait a bit longer, you'll see some of those guys coming out with "now that our paychecks are cut back, we can no longer keep with our donations to aaaaaaaall those charities!"

Funny thing about Noblesse Oblige is that it's generally considered the first warning sign of a forming aristocracy. That doesn't mean that rich-people charity donations disappearing would be a good thing, but seeing them unable to make said donations without having to cut back could be seen in a very positive light.

I know this doesn't have anything to do with your point, but I just wanted to mention it.

[Mesden]

I have not heard of this. Could you explain a bit more?

Luxury goods are typically astronomically high in cost (15,000 dollar dress), but actually quite low cost to process, usually (Some exceptions like Jewelry which is why Jewelers aren't ridiculously rich etc). So, anyone with a business in luxury goods is usually rich, and anyone buying luxury goods is usually rich. The glass ceiling is the "Any american can become rich" when it's pretty fucking rare and usually involves a lot of luck and connections instead of actual hard work.

Rich CEOs getting capped in salaries isn't going to hurt average consumerism much, just all the exorbitant businesses mentioned in, well, the OP.

[Fifthfiend]

Thread capped.