I believe the reason sights are set on the short term is because that is all that matters to the executive of today. If it keeps paying off, great! If not, milk it dry and move on to the next cash cow. In too many corporations that's all that matters today. I believe that the reduction in the top marginal rates are the reasons the executive of today looks to maximize profit and compensation. When the top rates were high it made no sense for a company to pour excessive levels of pay into the executive boards of their companies. Past a certain point, the government was taking a large chunk of the income. This acted as a check valve on excessive pay, forcing companies to reinvest that income in their company. They did this via new projects, expansion, better pay and benefits for the employees and so on. The point is, they put the money back into the company rather than hand it over to the government. The government tax policy influenced the way businesses conducted themselves, go figure!
Once tax rates dropped some executives realized that they could instead dump the cash into their bank accounts and all they had to do was make the company look good. Add to that the incentive it gives executives to further reduce expenses by off-shoring to the lowest bidder and cut back on wage and benefit increases and you have the mess we are in today. We need new, higher tax rates for the executive earners of today.
People who undercut those who seek to improve their lot in life by supporting those who would take advantage of them need to have their head examined.
Another issue is being able to largely compensate executives via stock options.
The idea, allegedly, is that they'll be motivated to increase the long-term profitability and stability of the company, thereby increasing the market value of the stock.
In reality, they are being compensated only via
the value of the stock, therefore their only real goal is to increase the (perceived) value of the stock; the company's real profitability and stability are secondary. There are various accounting tricks that can help decouple the stock value from the value of the company.
"Oh look, we can shuffle around worker pension money and cut benefits for people who are
depending on that income, and make it look like we were more profitable than we actually were. Neat!"
Or you can cut back on all expenditures, including new equipment and R&D, further inflating short-term profitability, then jump ship with a lavish severance package. So what if the company's future has effectively been destroyed? All the people who "matter" are going to be making bank regardless.
Concerning tax rates: Hell, it works even at lower levels. I invest in my 401k and IRA in part because of the tax incentives. Because of the 401k, a few thousand extra dollars are going to be spending a few decades in stocks and bonds, rather than going straight into taxes.
I'll tell you why I hate unions.
a) This isn't 1920
b) They operate just like the US Gov't:Get elected,collect money,then sell out the people they're supposed to be looking out for.
a) So? We're still people. We haven't changed much in many tens of thousands of years. Plays written in ancient Greece, when translated properly, are still relatable. We have better sanitation, access to information, and technology, but the underlying "human" is still the same. Many problems are still the same, and our tendency to try to exploit others for our own benefit is still alive and well.
b) The same can be said of any organization. We're prone to corrupt things. That's one reason behind the setup of the US government: To try to dampen corruption through concentration of power. Unions can do that too.
Yet our republic faces sell-out corruption in the leadership, but neither I nor you is calling to abolish it as an untenable means of governing people.
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The only reason wage stagnation is a problem is because of government monetary policy.
And I can only wonder about how much of that comes about because of "friendly" deals between the regulators and the regulated.
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An employer/employee relationship is symbiotic. I'm not union and I'm not the least bit worried about my job. Why? Because I'm good at it and because I'm paid to be good at it. I'm 100% free to change jobs at any time if someone offers me more money. My employer is 100% free to replace me if they can find someone more skilled at the same price or equally skilled for less money. That works for the vast majority of businesses and the vast majority of employees. My company has the comfort of knowing I have to perform the job well or I'm out. I have the comfort of knowing they have to compensate me fairly or I can leave and make more. Tell me what's wrong with that relationship? Why does any person need protection beyond the marketplace factors that set wages? If you can't make more elsewhere then you're being paid the proper amount. Wal-mart does not chain their employees up at night. They're free to walk out the door and with that comes the freedom to find a different job. If they can't, then Wal-Mart is the best job available and Wal-Mart is not responsible for their lack of options, nor is Wal-Mart obligated to subsidy them beyond their true worth in the workplace.
It can also mean that the entire market is depressed. During the recession, a lot of people were paid $0 because they'd been laid off. Was that the proper amount?
Japan has been facing economic problems for quite a long time, too. You can have an entire economy or market that's depressed, whether it be through natural market forces, or through bad policy. I don't know why it should be seen as destructive if you're working to remedy a bad situation.