CEO Compensation: Hey, They’re Paid What The Market Will Bear, So What’s Your Problem?


We are told CEOs are paid what the market will bear. After all, you should never mess with that invisible hand. Because, if you spend too much time looking into this, maybe you might learn the people at the top have been selling you a nice polished turd.

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An Indefensible Economic System

Someone needs to explain to me why there are so many Americans making average or even substandard wages who continue to defend the capitalistic status quo. I think this is where Robert Reich is correct, that people are simply afraid. In a labor market where employers have all the power, people just feel lucky to have a job.

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Economic Inequality Is A Clear And Present Danger To American Democracy

The phrase “clear and present danger” is the standard by which freedom of speech can be abridged. As the saying goes, nobody has the right to shout “fire” in a theater. The United States Supreme Court began citing this standard in 20th century rulings, reaffirming that freedom of speech stops at the point where it puts pubic safety in peril. The idea is controversial, but it should be understood that constitutional rights are not absolute. Whether you agree with this standard as it applies to freedom of speech, is of little importance here. It only matters that you understand what it means, because economic inequality is a clear and present danger to American democracy.

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The Free Market Has Spoken, And It Had Nothing To Say About Economic Inequality

One of the tenets of free market ideology is consumer choice. The idea goes like this. Empower citizens to make their own decisions and they will have greater freedom, greater prosperity, and businesses will live or die at the will of the consumer. Therefore, corporations and executives are in effect beholden to the consumer. Sounds good right? Who could be against that?

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Why Are Middle Class Incomes Stagnant? Are We Simply Unproductive Compared To The Super Wealthy?

Would you like to make an extra $50,000, $75,000, or $100,000 dollars a year? I know I would. Would you like a yearly income of $75,000, $150,000, or $300,000? In reality, most Americans make far less than even the lowest amount I listed. In 2012, the median income in America was $51,017, which was down slightly from 51,100 the year before. The poverty rate was 15%, which is over 45 million people. For the bottom 90% of the country, wages have been flat for the past three decades compared to top percent earners who have seen their income double, triple and more.

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Obamacare: Why Free Market Health Care Is Not The Answer

Just hours after mildly defending Obamacare, which was mostly a rebuke of Republican obsession with Obamacare repeal, I will now tell you why free market health care is not the answer. And yes, Obamcare is a capitalist solution to universal health care. Don’t get me wrong, the Affordable Care Act has great protections and benefits for people — rebates when health care insurers do not spend at least 80% on medical services, no denial of coverage for pre-existing conditions, and no more lifetime caps on health care expenditures. And tens of millions more Americans will have a chance to access more affordable health care when health care exchanges start going online next year.

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