Is this the legacy of Ronald Regan, the Republicans, and the GOP?
http://finance.yahoo.com/career-work/article/107069/pay-dirt-the-executive-pay-system-is-broken?mod=career-salary_negotiation The Regan Administration took away the majority of restrictions on corporations. This led to rampant corruption at the corporate level and unreasonably huge CEO compensation. Here is a quote from the article; "It wasn't always like this. From the Great Depression until the late 1980s, CEO pay levels stayed fairly constant. Adjusted for inflation, a CEO in 1988 earned as much as one did in 1934, according to research published in 1990 by Michael Jensen and Kevin Murphy. 'We are confident that the causes are systemic,' they wrote. Without 'the creation of a new regime in compensation practice' more companies could get into trouble because of skewed incentives, they added. So why has CEO pay surged so dramatically since the late 1980s? Many experts blame the following: Golden parachutes, annual stock-option grants, peer-group comparison surveys and reaction to new government regulations. The two compensation experts re-visited the issue in 2004 in the wake of the Enron scandal and concluded that things had changed "dramatically" for the worse." So the question. Is this whole financial crisis the result of "Reganomics"? Of rewarding the rich and expecting to have the billions of excess CEO compensation trickle down to the average worker? Bill G. That is not how a free market is supposed to work. A free market is based on supply and demand, not CEO compensation and corporate bonuses. Besides, if you read the article, you would understand that the problem is systemic. All CEO's do this, thus, it is impossible to stop buying their products as you suggest. To all, I refer to Reganomics, or the economics of rewarding the rich with the belief that they will bring up the rest of the country. OH, and by the way. That community reinvestment act which you trumpet so loudly never caused this problem. That act accounted for less than 2% of the total bad loans given by banks. Stop blaming the poor on the problems the rich caused. The problem was that CEO's had too much incentive to dish out loans. This cause them to leverage more than they had. They did this so they could get their golden bonuses. Sorry. I am right! And so is Warren Buffet, who argued this very same thing.
Asked By: BigBubbaLove - 5/14/2009
Best Answer - Chosen by Asker
What BusinessWeek at the time dubbed the "deindustrialization of America" marked a decisive shift of American capital from productive forms of investment to purely speculative forms of wealth accumulation. It is highly noteworthy that the previous bourgeois offensive against the American working class that began after... More
Answered By: delina_m - 5/14/2009
Additional Answers (12)
Reaganomics sucked then, and they suck now.
Answered By: Atheist in the Foxhole - 5/14/2009
The rich get rich and the poor get poorer. In the meantime, In between time, Ain't we got fun?
Answered By: Darwin - 5/14/2009
If you don't like their executive pay practices then don't buy their products until they change. That is how a free people fixes things in a free market... More
Answered By: Bill G - 5/14/2009
OK the link you gave NEVER once mentioned Regan or the GOP... More
Answered By: Lady B - 5/14/2009
a CEO in 1988 earned as much as one did in 1934. Reagan 81-88. Reagan had nothing to do with it, and I fail to see the problem with people spending their own money. I have a problem with government doing these same thing on our dime.
Answered By: mbush40 - 5/14/2009
Blaimng it on Regan, this is a first. Despite claims that the economic cirisis is largely the fault of Bush and his evil tax cuts, the facts say otherwise. The blame lies nuch further back. It starts with Jimmy Carter. Now Im not saying that CRA is bad except the fact that it doesn't work. But we see time and time... More
Answered By: AAA - 5/14/2009
Reaganomics had nothing to do with what companies did with their money, nor should it. A capitalist free market open trade system should work that way. Reaganomics lowered income taxes giving more money back to the people to give them the choice where and how to spend their money as well as lowered marginal tax rates... More
Answered By: Reagan '12 - 5/14/2009
You have a bit of it. The concept of "Reaganomics", dubbed voodoo economics by his Republican opponent and later vice president George H.W. Bush, was a federal ponzi scheme. It wasn't Reagan's fault. He was just the salesman, picked by corporate America to sell the idea. He didn't understand or even think about... More
Answered By: fangtaiyang - 5/14/2009
Yes, I agree with you, but don't expect any rational answers from the right, after all, you're criticizing their God, Ronnie Ray-gun.
Answered By: hotpinkKITTY - 5/14/2009
True. Reaganomics has lead to the current train wreck that is our economy. You notice the cons mercifully don't talk about it anymore.
Answered By: Holy Cow! - 5/14/2009
You're way too frothy for me this early in the morning. You might consider changing your name to 'LesS of a thinker'.
Answered By: Barney - 5/14/2009
Bill G. gave the best, most concise answer. However your own biases will clearly keep you from picking it as the best one... More
Answered By: Carl F - 5/14/2009
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