Capitalism, The Best Solution to Poverty

[Hermit]

On what basis do you say a ceo is not worth her pay?

To start with, I said "his" for a very good reason: Only 4% of CEOs in the Fortune 500 are female,so don't get too smug about using the female pronoun.

As to your question, right back at you: How do you know a CEO is worth 380 times the pay of the average worker?

The boards of directors do not act in the interest of their companies' workers. They act in the interest of shareholders. If a company could be run without the latter, CEOs, directors and shareholders would be rid of them without a moment's hesitation.

In fact, thanks to the rapid progress automation has been making, particularly in recent years, they are well on their way of doing exactly that. The McKinsey Global Institute predicts that over the next twelve years automation will abolish 375 million jobs. How many jobs will be left at the end of this century? Now, I am not opposed to automation, but tell me this: Who will buy all those goods and services companies offer when the day comes where nobody earns the money needed to pay for them?

[Forty Two]

Fortune 500 companies aren’t the only companies with CEO. Only 500 companies are in the fortune, umm, 500.

I didn’t say the CEOs are worth it. I’m not paying them, so I don’t know what they are worth. They are worth what a willing buyer is willing to pay to get their value/work. If someone could be relied on to do the job cheaper, then that person would be hired. People hiring CEOs are not giving away money. Just like producers hiring a great actor. Is Brad Pitt worth it? Not to me. But to the producer of Fight Club, he was.

Yes the directors act in the interest of shareholders. Of course. The shareholders own the company. That’s why they hire a good ceo, or try to. And that’s why they don’t want to pay too much. They want to maximize profit. Acting on behalf of the workers would not obviate the need for a good ceo. The workers still need to work for a viable well managed company as much as possible.

How does something other than capitalism solve the automation problem? Will it stop the automation? Will it force employers to hire workers they don’t need? What do you want compelled?

[Brian Peacock]

“However, look at it a little more closely in relation to other countries. We’re often told that to be poor in the US is much worse than being poor in the social democracies of Europe. And the bottom 10% in the US are indeed worse off than the bottom 10% in Sweden. But they’re better off than the bottom 10% in Germany or France: places where we are told that there is indeed that social democracy.

Maybe there’s something for this capitalism red in tooth and claw then: given that it does seem to improve the lives of the poor.

Take another look as well: we know that Russia is where bloated plutocrats loot everything from the country: and yet the bottom 10% in the US have, by this measure at least, better lives than the top 10% in Russia. And the top 10% in Portugal (where I live) and Mexico.” https://www.google.com/amp/s/www.forbes ... anity/amp/

Those numbers and the chart are from The Economist.

We can all agree that the poor of any nation are always going to be better off than the poor of the poorest nation. So what? We heard the same arguments in the 90s when interest rates were at 15%: "When you compare UK interest rates to Argentina, or UK inflation to the runaway inflation of this-or-that tin-pot ex-colonial dictatorship, we're actually doing rather well what what?". I fear you are conflating contexts here - the poor in the US are poor by American standards, within the context of American society and the American economic landscape. The poor in America don't buy their waffles in Yemen or The Democratic Republic of the Congo do they? I guess one solution would be to send the US poor to somewhere where the little they do have might allow them to live like kings. Make America Great Again: Export the poor!

[Hermit]

I wouldn't mind getting the sack if the termination slip were accompanied by an x million dollar addition to my bank account.

Those terms are freely negotiated.

Sure. If the prospective CEO can convince the board that he can increase the company's market capitalisation by a compounding annual rate of, say, 7%, the shareholders those directors represent will be very happy to shell out a few million bucks. The CEO's plan might include restructuring that involves shedding a few thousand workers or moving production plants to a location where labour is available at a fraction of current wage rates, but the speculators and gamblers at casinos also known as stock exchanges or investment funds don't give a fuck. The CEO's task is not to take care of the people who actually produce goods and services. His task is to maximise returns on investments for people who play with money as if it was a monopoly game.

I don’t think any actor is worth $20 million for a movie. But I am wrong about that. I’m wrong because the people who pay the actor wouldn’t pay him or her if they did not expect to make more money with that actor than without. Same goes for CEOs.

Actors are like CEOs. It's not a matter of how good the actors are, or how hard they work. They promise a good return on investment via ticket sales. John Wayne was not a good actor, nor did he work hard. He always cruised through making a movie by playing the same role: John Wayne, but did he ever generate ticket sales! Glenda Jackson is a top quality actress, but the movies she appeared in were generally not crowd grabbers, so she made nowhere near the money John Wayne was paid. In short, if the owners of the movie manufacturing facilities are convinced that by paying an actor 20 million bucks they'll finish up with a movie grossing 300 million, they'll be OK with giving them a cut of the profits. If quality of the movie had anything to do with it we would not have been lumbered with any of those Carry on or Die hard productions.

[Hermit]

Fortune 500 companies aren’t the only companies with CEO. Only 500 companies are in the fortune, umm, 500.

Go on then; tell me what the overall percentage of female CEOs is.

[pErvinalia]

one thing you are mistaken about is the notion that the US does not have a safety net. We do. A lot of safety nets.

But again, the chart in that article and the numbers were vetted and published in the Economist.

Life in the US is generally good. Poverty is uncommon, and what we call poverty is not poor compared to most of the world.

That’s true too of Oz and the Western European capitalist democracies. They don’t have poverty. Not like most of the world. The eastern bloc countries have poverty. The Asian and South American countries have poverty. Any country that tried to follow Marx had and has poverty. Africa has poverty. But, the US and Western Europe? Oz? Canada? Those of us in the first world have no idea what poverty is.

I’ve travelled enough to have seen some real poverty - it does not really exist in the US and the rest of the first world.

Poverty is relative to the cost of living. Our poor might be not so poor if they lived in India, but if they can't afford to house and feed themselves here, then they are just as poor as someone in India who can't afford to house and feed themselves.

[pErvinalia]

How to lie with false stats is exactly what the cookie cartoon is. Of course ceo’s Make huge amounts more than the average worker. The average CEO has been working for decades, and has a very exclusive set of skills. I wouldn’t expect a factory employee to make that kind of money. And declaring it unfair that a ceo makes 100 or 1000 Times what someone else makes doesn’t make it so. There is nothing inherently wrong with people making more money than other people.

It could be argued that people making money based on the sole fact that they already have money (i.e. the rentier class) is pretty wrong.
..

On what basis is it wrong? You have a car or house and want to rent it out, and someone needs a car or a house. Sounds like a good use of property. And it takes risk and effort and money to maintain cars and houses to rent out. What is wrong?

Because they are able to make more money easier than a person who only has their labour to trade. I.e. they barely have to work to make a living. And some people work and can't make enough to even live on. It seems a bit lopsided to me.

[pErvinalia]

How to lie with false stats is exactly what the cookie cartoon is. Of course ceo’s Make huge amounts more than the average worker. The average CEO has been working for decades, and has a very exclusive set of skills. I wouldn’t expect a factory employee to make that kind of money. And declaring it unfair that a ceo makes 100 or 1000 Times what someone else makes doesn’t make it so. There is nothing inherently wrong with people making more money than other people.

In any case, high inequality is a handbrake on economic growth. It's also a recipe for people swinging from lampposts.

If it is, and the us is so bad in that regard, then why is the US GDP so big? And why is the US comparatively stable in terms of lamppost swinging?

Have you looked at your politics and social movements lately? The time of the lampposts seems fast approaching.

And ur GDP would be bigger without the handbrake of inequality dragging on it.

Inequality is one consideration, yes. However it is not the only consideration. I would rather live in a country where the poor live relatively well than in one where equality is enforced but the poor are relatively worse off. To me, it’s extreme poverty that breeds revolution. A few billionaires is not injurious.

False dichotomy.

[Scot Dutchy]

The poor in America are relatively well off?

Millions of Americans live in extreme poverty. Here’s how they get by.

But it's worth keeping in mind that even the richest countries haven't completely eradicated extreme poverty. That's the key takeaway from the work of sociologists Kathryn Edin (Harvard) and Luke Shaefer (Michigan), who for the past few years have been trying to nail down the incidence of extreme poverty in the United States. Their latest research is set to be published in the journal "Social Service Review" next month. They use a slightly different measure, defining extreme poverty households as those living on less than $2 a day per person; that's also a World Bank measure, derived from the average poverty line in the developing world, rather than the average in very poor countries.

The results are astonishing. Using data from the Survey of Income and Program Participation (SIPP), a Census program that tracks samples of tens of thousands of households across 2 1/2 to 4 years, Edin and Shaefer estimate that in 2011, 1.65 million U.S. households fell below the $2 a day per person threshold in a given month. Those households included 3.55 million children, and accounted for 4.3 percent of all non-elderly households with children.

Who in the EU has to live off $2 a day? None.

[Scot Dutchy]

Child poverty

In 2012, 16.1 million American children were living in poverty. Outside of the 49 million Americans living in food insecure homes, 15.9 million of them were children.[49] In 2013, child poverty reached record high levels in the U.S., with 16.7 million children living in food insecure households. Many of the neighborhoods these children live in lack basic produce and nutritious food. 47 million Americans depend on food banks, more than 30% above 2007 levels. Households headed by single mothers are most likely to be affected. 30 percent of low-income single mothers cannot afford diapers.[50] Inability to afford this necessity can cause a chain reaction, including mental, health, and behavioral problems. Some women are forced to make use of one or two diapers, using them more than once. This causes rashes and sanitation problems as well as health problems. Without diapers, children are unable to enter into daycare. The lack of childcare can be detrimental to single mothers, hindering their ability to obtain employment.[50] Worst affected are Oregon, Arizona, New Mexico, Florida, and the District of Columbia, while North Dakota, New Hampshire, Virginia, Minnesota and Massachusetts are the least affected.[16] 31 million low-income children received free or reduced-price meals daily through the National School lunch program during the 2012 federal fiscal year. Nearly 14 million children are estimated to be served by Feeding America with over 3 million being of the ages of 5 and under.[51]

A 2014 report by the National Center on Family Homelessness states the number of homeless children in the U.S. has reached record levels, calculating that 2.5 million children, or one child in every 30, experienced homelessness in 2013. High levels of poverty, lack of affordable housing and domestic violence were cited as the primary causes.[52]

https://en.wikipedia.org/wiki/Poverty_i ... ted_States

Data regarding poverty is strongly massaged and plenty right wing organisations throw a lot of sand to confuse.

[Forty Two]

“However, look at it a little more closely in relation to other countries. We’re often told that to be poor in the US is much worse than being poor in the social democracies of Europe. And the bottom 10% in the US are indeed worse off than the bottom 10% in Sweden. But they’re better off than the bottom 10% in Germany or France: places where we are told that there is indeed that social democracy.

Maybe there’s something for this capitalism red in tooth and claw then: given that it does seem to improve the lives of the poor.

Take another look as well: we know that Russia is where bloated plutocrats loot everything from the country: and yet the bottom 10% in the US have, by this measure at least, better lives than the top 10% in Russia. And the top 10% in Portugal (where I live) and Mexico.” https://www.google.com/amp/s/www.forbes ... anity/amp/

Those numbers and the chart are from The Economist.

We can all agree that the poor of any nation are always going to be better off than the poor of the poorest nation. So what? We heard the same arguments in the 90s when interest rates were at 15%: "When you compare UK interest rates to Argentina, or UK inflation to the runaway inflation of this-or-that tin-pot ex-colonial dictatorship, we're actually doing rather well what what?". I fear you are conflating contexts here - the poor in the US are poor by American standards, within the context of American society and the American economic landscape. The poor in America don't buy their waffles in Yemen or The Democratic Republic of the Congo do they? I guess one solution would be to send the US poor to somewhere where the little they do have might allow them to live like kings. Make America Great Again: Export the poor!

Sure, and the poor in Germany and UK are poor by German and Brit standards. However, comparing American poor to German and Brit poor, the poor in America are doing better, says the OECD better life index, and that is true of just about every country in the world. The reason this point is being made here is because of the article posted saying that the feisty Ozzie is coming to the US to give the US a look-see into how bad off the poor have it in the US. The article then assumes its own conclusion, saying that the US is an "outlier" from "the rest of the world" because the poor have it so bad here. The point I was making is that it's really ridiculous to call the US an outlier from the rest of the world in that way, because pretty much, other arguably than a handful of first world, western European, Canada Oz/NZ, being poor in the rest of the world is much worse than in the US.

[Forty Two]

I wouldn't mind getting the sack if the termination slip were accompanied by an x million dollar addition to my bank account.

Those terms are freely negotiated.

Sure. If the prospective CEO can convince the board that he can increase the company's market capitalisation by a compounding annual rate of, say, 7%, the shareholders those directors represent will be very happy to shell out a few million bucks. The CEO's plan might include restructuring that involves shedding a few thousand workers or moving production plants to a location where labour is available at a fraction of current wage rates, but the speculators and gamblers at casinos also known as stock exchanges or investment funds don't give a fuck. The CEO's task is not to take care of the people who actually produce goods and services. His task is to maximise returns on investments for people who play with money as if it was a monopoly game.

Yes, and that's ultimately better for the economy and the people. The shareholders own the company. To compel them to retain workers they don't need doesn't do much good, but does quite a bit of harm. And, the option regarding moving production plants around is to make it unlawful to build one production plant and close another. That's not conducive to a business staying operational.

The task of a CEO is the mange the company so it makes money, because if it doesn't make money it will cease operations because it will run out of money. Then all the workers are out of jobs, and the company is gone.

There is nothing stopping people from setting up companies that are owned by their employees. It's perfectly legal. What's a rather thorny issue is taking a company that was started and built by a group of owners or a team, who hired people at salaries and wages to do a job, and then take away that company from the owners and give control to the employees who will then operate the business not with a view toward maximizing efficiency and productivity and profits, but for the benefit of the workers themselves, which can very often conflict with what is best for the company.

I don’t think any actor is worth $20 million for a movie. But I am wrong about that. I’m wrong because the people who pay the actor wouldn’t pay him or her if they did not expect to make more money with that actor than without. Same goes for CEOs.

Actors are like CEOs. It's not a matter of how good the actors are, or how hard they work. They promise a good return on investment via ticket sales. John Wayne was not a good actor, nor did he work hard. He always cruised through making a movie by playing the same role: John Wayne, but did he ever generate ticket sales! Glenda Jackson is a top quality actress, but the movies she appeared in were generally not crowd grabbers, so she made nowhere near the money John Wayne was paid. In short, if the owners of the movie manufacturing facilities are convinced that by paying an actor 20 million bucks they'll finish up with a movie grossing 300 million, they'll be OK with giving them a cut of the profits. If quality of the movie had anything to do with it we would not have been lumbered with any of those Carry on or Die hard productions.

Indeed, and that's the value CEO's offer, and exactly why they get paid what they get paid. The judge of the quality of a product is the customer/consumer. If the customer/consumer wants John Wayne, then even if he sucks as an actor (in the view of educated actor/movie people), it doesn't matter. That's a good thing.

[Scot Dutchy]

The delusion is now complete. American poor are not poor just less rich. You just cant get past the Heritage Foundation can you?

45 Million Americans Still Stuck Below Poverty Line: Census

The annual income threshold for being counted as living in poverty was $11,490 last year for a person and $23,550 for a family of four.

Poverty is particularly dire for single mothers: A third of all families headed by single women were in poverty last year — that’s 15.6 million such households.

The black poverty rate was 27.2 percent, unchanged from 2012 and higher than 24.3 percent before the recession began. More than 11 million black Americans lived below the poverty level last year. About 42.5 percent of the households headed by single black women were in poverty. The Hispanic poverty rate was 23.5 percent.

How Poor Are America’s Poor, Really?

You might be under the impression that America's poor are only poor by American standards. After all, the United States is a rich nation, and hey, practically anyone here can at least afford a decent TV. But no. As Matt Bruenig illustrates at Demos today, low-income Americans get an exceptionally raw deal for residents of the developed world. Using data compiled by LIS, he's ranked countries by how much income individuals have at their disposal throughout the bottom half of the economic distribution. At the 10th percentile, the U.S. ranks 13th. At the 20th percentile, it reaches 11th—moving up the rankings as it approaches the middle class.

[Forty Two]

You complain about the Heritage Foundation, but then you counter with "Slate." LOL. Good one.

Also, Heritage was one of the sources I cited. I have also cited The Economist, and the OECD, which are rather good sources, don't you think?

Note the qualification in your Slate article - "Some of the figures from Europe and Australia predate the Great Recession, which put a dent in incomes worldwide." Thus, they were comparing pre-Great Recession number in Europe and Oz with post-Great Recession numbers in the US. The Slate article also examines only one statistic, the LIS stat re "income." My numbers from The Economist and the OECD involved an array of different stats.

Also, even using your Slate article, it does not correct for the ridiculousness of calling the US an "outlier" from "the rest of the world." Even based on your Slate article, the US is at worst toward the bottom of the first world countries. But we are still in that grouping. So, even taking it at face value, the US is certainly not doing bad compared to "the rest of the world."

But, the reality is that the poor in the US are not experiencing poverty like the "rest of the world." If your family income is $10,000 a year, you are wealthier than 84 percent of the world. If it's $50,000 or more a year, you make more than 99 percent of the world. The average American is a 1%-er in the world.
http://www.oregonlive.com/hovde/index.s ... ricas.html

Here's the Pew Research Center -

But how does the well-being of the American family compare with the well-being of people in other countries?

The U.S. still fares very well on that score. On a global scale, the vast majority of Americans are either upper-middle income or high income. And many Americans who are classified as “poor” by the U.S. government would be middle income globally, according to a new Pew Research Center analysis.

http://www.pewresearch.org/fact-tank/20 ... dle-class/ In other words Dutchy - you are using biased sources, and when compared to the sources that I've presented, this is no contest. I have provided not just Heritage, but The Economist, the OECD's numbers, and Pew Research, and below you'll find Forbes too.

Here's an article by Forbes, all due respect to that neutral, moderate, unbiased "slate" source -- https://www.forbes.com/sites/timworstal ... b6a6d25cb5

By those same World Banks standards the definition of globally middle class is a consumption possibility of $2 to $50 a day (there's two different possible definitions, $2 to $13 which we might better regard as "not in poverty but not yet middle class" and $12 to $50 which is perhaps "middle class"). Even those reporting no income at all in the US have consumption possibilities roughly equal to those reporting incomes of $20 a day. And to repeat, yes, this is adjusting for the different value of money in different places and countries.

Thus we can say that by global standards there are no poor people in the US at all: the entire country is at least middle class or better. We seem to have fought and won that War on Poverty.

This still leaves us with the war in inequality of course but then that's a rather different matter.

[pErvinalia]

“However, look at it a little more closely in relation to other countries. We’re often told that to be poor in the US is much worse than being poor in the social democracies of Europe. And the bottom 10% in the US are indeed worse off than the bottom 10% in Sweden. But they’re better off than the bottom 10% in Germany or France: places where we are told that there is indeed that social democracy.

Maybe there’s something for this capitalism red in tooth and claw then: given that it does seem to improve the lives of the poor.

Take another look as well: we know that Russia is where bloated plutocrats loot everything from the country: and yet the bottom 10% in the US have, by this measure at least, better lives than the top 10% in Russia. And the top 10% in Portugal (where I live) and Mexico.” https://www.google.com/amp/s/www.forbes ... anity/amp/

Those numbers and the chart are from The Economist.

We can all agree that the poor of any nation are always going to be better off than the poor of the poorest nation. So what? We heard the same arguments in the 90s when interest rates were at 15%: "When you compare UK interest rates to Argentina, or UK inflation to the runaway inflation of this-or-that tin-pot ex-colonial dictatorship, we're actually doing rather well what what?". I fear you are conflating contexts here - the poor in the US are poor by American standards, within the context of American society and the American economic landscape. The poor in America don't buy their waffles in Yemen or The Democratic Republic of the Congo do they? I guess one solution would be to send the US poor to somewhere where the little they do have might allow them to live like kings. Make America Great Again: Export the poor!

Sure, and the poor in Germany and UK are poor by German and Brit standards. However, comparing American poor to German and Brit poor, the poor in America are doing better, says the OECD better life index, and that is true of just about every country in the world.

It's all starting to come back to me. As is often the case, we've had this discussion before. And as is often the case, you cut and ran when your position was shown to be shaky. The OECD better life index doesn't account well for different demographics. This was explained to you at length in our previous debate. And according to wiki, this is a common criticism:

New indicators and dimensions are planned be added to the Better Life Index in the future. For example, the Better Life Index was criticised for not showing inequalities in a society.[8] Future editions of the index are planned to take inequalities into account, by focusing on well-being achievements of specific groups of the population (women and men and low and high socio-economic status).

https://en.wikipedia.org/wiki/OECD_Bett ... ethodology