Frustrated Capitalist

It's becoming more and more difficult to support capitalism, or at least the current flavor of capitalism existing in America today. I have never really been a fan of what I call "Corporate Capitalism", the idea that big business is always good for us and whatever they want or need is what we must give them. Perhaps if they were better corporate citizens I might take a more favorable stance towards them, but given recent news over CEO pay and executive pensions I simply am disgusted. Consider the following two pieces of information:

An article recently ran in our local paper (see Yahoo!News here) stating that on average, CEOs earn 262 times the average worker's salary (CEOs about $11 million, average worker about $42,000). And if you look at the various different articles on this same topic, you will find that it seems what they actually did at the company made no difference. You can drive your company into the ground and STILL make more in a day than the average worker makes in a year. Back in the 1960s the multiple was closer to 24 or 25... have CEOs improved ten-fold over that period in time? As hourly wages are frozen or barely keeping up with inflation, the top tier take home more and more. Now not all companies are like this (consider Whole Foods which caps CEO pay at 14 times the average employee's pay, plus stock options), but enough are that I am surprised stock holders do not rise up and in a fit of disgust sell out everything they have (and given the current market, bonds might be a better short-term deal). I dunno, perhaps it was a fact of growing up poor and believing that hard work will be valued that I find myself in disbelief when I see such reports on compensation.

The second article is from the Wall Street Journal (23-June-2006) titled "Hidden Burden: As Workers' Pensions Wither, Those for Executives Flourish" (you can find a summarized version here. All you hear today is how employee pensions are a drag to business and must be jettisoned for many companies to survive. One quote from GM: "Our extensive pension and [post-employment] obligations to retirees are a competitive disadvantage for us". But the Journal, after looking at the reported numbers, states "The pension plans for its rank-and-file U.S. workers are overstuffed with cash, containing about $9 billion more than is needed to meet their obligations for years to come." At the same time, the pension obligations for executives are a liability to the company of $1.4 billion! And Lucent's employee pension actually brings in money to the company (over half of its profit comes from revenue from the employee pension). Disgusting! If you have the time, track down a copy and read it... but take your blood pressure medicine first.

I'll write more about this later, but right now I am so angry I can't see straight.