Big Ideas to Fix the Economy: Cap CEO Pay

Wednesday, August 17, 2011

This week we’ve been asking listeners to suggest ideas on how to fix the economy. So far we’ve talked about raising inflation and boosting housing prices. Today we're talking about capping the total compensation that CEOs earn — including salary, benefits and bonuses — at $5 million. Any additional money would go back to the company, hopefully creating more jobs. Who would step up to do this? Perhaps Warren Buffett, in light of his recent op-ed for The New York Times.

We’ll talk more about this with personal finance adviser Alvin Hall. He says that the compensation packages CEO's receive are too high and they need to think about the greater good.

Guests:

Alvin Hall

Produced by:

Hsi-Chang Lin

Comments [12]

scooby from America

you cannot go around telling people how to think, feel, live, act, eat, deficate, urinate, agitate, fornicate, and all the other ate`s you think the government needs to control. do you people realize that ALL the politicians you worship are also WEALTHY americans that do not want to lose their power in Washington? They`ll do, say, cheat, steal, lie, kiss butt, anything to stay in office to push their agenda`s, which always means make themselves richer. And you people want to gripe about Corporations? At least they employ people.

Aug. 22 2011 04:42 PM
Jack from Fresno Ca

This may be a differant way to get there, I think it would work. First take the money lent to the banks back in the form of notes on properties financed, then that would remove the most of the toxic morgage off banks back and the Fed would then hold the notes. Now take those notes and re-finance them at 2% fixed , then the Fed would be making instant cash flow, instead of theFed making 0% from the banks they will earn a return on the investment @ 2%, the home owners who qualify for this are solid and they would have extra money to spend as they would, this would solve many issues . My thoughts are to run this through HUD as this agency is there and running no need for another Dept of waste. I do believe this would solve many economic problems the banks will start doing buisness the way they should or they would fold! the same way most buisness is done.

Aug. 19 2011 01:11 AM
listener

Sounds like an ingenious and efficient plan to create a massive exile of established and aspiring American wealth creators away from the United States in the 21st Century and thus the spark the greatest brain drain world history to follow the greatest spending spree in world history.

Tragically this is not an original idea since it has been tried several times all over the world in the last century and has left misery, desolation and tyranny in its wake.
What a discussion to have on the 50th anniversary of the Berlin Wall construction.
Apparently the only thing stopping such "progress" in this nation is that quaint old document called the US Constitution.

Aug. 17 2011 11:51 AM

The $5M cap on CEO's sounds great, but didn't the old $1M cap divert money to stock options and spur the focus on next-quarter planning not next-decade thought? No, we have to pay for these $3T wars in Afghanistan & Iraq just like the $3T WWII (in today's money). The top marginal income tax then was 91% on money above $3M (in today's money) lowered to 74% under LBJ after closing loopholes. Corporations = people, so tax capital gains at least 35% not just 15%. New brackets: over $1B income/profit = 91%, over $500M = 74%, over $100M = 50%, over $20M = 39%, over $1M = 35%. Raise the hourly minimum wage $1/year from 2007's $7.25 to $10 (the 1968 level in today's money) to $15 (Ralph Nader's estimate based on productivity). Combine these tactics for a strategy of full employment, with single-payer healthcare like China and free education like pre-Reagan California. This would encourage charitable giving and re-investment like the old cartoons about capitalism. At least one elementary school textbook presumes only Communism and democratic capitalism exist, not democratic socialism or corporatism/fascism.

Aug. 17 2011 11:09 AM
listener

So the same government that will run up a $16 trillion debt will lecture successful private businesses how to run a company?

What happens today to a private business that imitates government and goes into massive debt it cannot pay back while playing creative accounting tricks with other people's money?
Apparently the same thing that happens to a successful CEO who asserts Constitutional protections refuses to give up his or her private property rights in this dystopian future.

Instead of capping private business that creates wealth how about capping government budgets that only take wealth?
Even with all the chortling and laughter this is a very disturbing discussion.

Aug. 17 2011 10:54 AM
anna from new york

"We need to have more young people, the problem is demographic"
Oh really, Ed? And what percentage of the young is unemployed? Why didn't you checked?

Aug. 17 2011 09:06 AM

Anything is possible, we need to wake up wake up wake up. The bigger problem we have is we don't know how to stand up to the bullies. We think it's a justified cause to there run of everything. It's a very old school playground way of thinking. When things get bad human beings rather screw the next person over just to get scraps instead using their foresite to see the bigger picture. Then you have the Corporation pinning the middle class on one another, we lost are beliefs and values as a country. If we don't change we are in a world of hurt.

Aug. 17 2011 08:55 AM
Jakop from NY

Anything is possible, we need to wake up wake up wake up. The bigger problem we have is we don't know how to stand up to the bullies. We think it's a justified cause to there run of everything. It's a very old school playground way of thinking. When things get bad human beings rather screw the next person over just to get scraps instead using their foresite to see the bigger picture. Then you have the Corporation pinning the middle class on one another, we lost are beliefs and values as a country. If we don't change we are in a world of hurt.

Aug. 17 2011 08:47 AM
anna from new york

This zombie who just called with her brilliant new, totally new idea of lowering corporate taxes is a classic example. Nobody told the "trickle down" morons that the rich DON'T HAVE to invest - they can (and they do) spend the money on prostitutes on the Riviera or not to spend, etc.
You can't reform such a society - it has to collapse.

Aug. 17 2011 08:37 AM
anna from new york

It's too late, friends. This country isn't reformable and one of the reasons is utterly illiterate population, brainwashed into believing "the rich are rich because they deserve to be rich."
The way to do it WAS a creation of a civilised society with mandatory vacation, sick days and legal (functioning) protections against exploitation (no 70 hour work weeks pretending to be 40 hour work weeks)
Salaries of barbarians would be automatically lower.

Aug. 17 2011 08:18 AM
Elsa from Manhattan

watch this clip from the News Hour about distribution of wealth and percieved same.
http://www.pbs.org/newshour/bb/business/july-dec11/makingsense_08-16.html

Aug. 17 2011 08:18 AM
Ed from Larchmont

We need to have more young people, the problem is demographic: make abortion illegal and focus resources on supporting families and women. Young people start businesses, pay into Social Security and pay health insurance, etc. As we age as a society, the problem will just get worse, and the other solutions won't do it at all.

Aug. 17 2011 06:25 AM

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