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The State of the Union and that Pesky CEO Pay

  • Posted on January 24, 2011 at 10:39 pm

This morning Peggy Noonan was on the Morning Joe show.  I watch the show as I’m getting ready for work.  I always think it is interesting when I hear Republicans like Peggy and Joe singing the praises of President Obama.  They both just love Obama and are so thrilled that he is moving more towards the “center”.  I, of course, find all of this laughable because Obama has always been pretty much right of center.  If he was any where left of that golden center, health care would have a public option and we’d be out of these two wars.  I have to make a clarification here as both Peggy and Joe insisted this morning that they are not really into that “Republican” label.  They are really “conservatives”.  All I know is that a thorn known by any other name is still prickly.

I sit here thinking about the state of the union address.  Of course we are all being told that President Obama is going to embrace business with some kind of love fest.  Recently, he put an editorial piece in the Wall Street Journal where he said that we have to look at old, outdated rules and regulations.  I’m really curious about this because I have a nephew who sustained a traumatic work place injury about ten years ago.  I’m sure he wishes there were better rules and regulations in place when he had his hand cut off in a meat cutter.  In business, it always comes down to the almighty dollar.  Let’s see is it worth putting that screw on the “kiddie” pool or will we make more money even with a lawsuit, if we don’t?

The questions business must think about.  I wonder what went through the minds of those Toyota executives when they tried covering up their little problem.

You can read President Obama’s entire executive order.  There isn’t a lot to it, but it really makes me wonder why President Obama even bothered with it.  However, reading numbers 4 & 5 really get my curiosity up.  It seems to be quite open to interpretation.  The lines seem a little blurry to me.

Or even his editorial piece.

As stated in that Executive Order and to the extent permitted by law, each agency must,
among other things: (1) propose or adopt a regulation only upon a reasoned
determination that its benefits justify its costs (recognizing that some benefits
and costs are difficult to quantify); (2) tailor its regulations to impose the
least burden on society, consistent with obtaining regulatory objectives, taking
into account, among other things, and to the extent practicable, the costs
of cumulative regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other advantages;
distributive impacts; and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess available
alternatives to direct regulation, including providing economic incentives
to encourage the desired behavior, such as user fees or marketable permits,
or providing information upon which choices can be made by the public

I’ve been curious about the push for business in government for awhile now.  Here in Michigan we have a new governor, a businessman.  In the last election Maine and Florida, like Michigan went to the business world for their governors.  Now, I hear talk of President Obama warming to business and yet I saw on MSNBC today that American businesses have created about two million jobs this past year.  However, only 600,000 are in the United States.  I keep hearing the words “business friendly” and I’m not sure exactly what that means but I can deduce that it might imply “labor unions” not so friendly.  It really does come down to the bottom dollar.  How can a business turn the highest profit?  The cost of labor has to go down to make business happy or they can just keep hiring workers in other countries.  Where does that leave the American people?

Our Governor spoke last week and I’m still wondering exactly what he’s going to do but I know it’s going to be some kind of love affair with the business world.  Don’t get me wrong, I do realize that business has to be able to make a profit.  I’m just not so sure that those high CEO pays are all that necessary.  Other countries seem to curb the appetite of their CEO pay.  It is destroying our country.  Here is a good take on it.

Notice that CEO pay can be 400 times the pay of the average worker.  I would say that is kind of excessive!  If we want to fix business in this country, then maybe we should start at the top and stop making the little guy continue to give up things and make concessions.  American CEO Pay needs to be adjusted.  Every CEO should be thinking about his or her country.  John F. Kennedy said, “Ask not what your country can do for you.  Ask what you can do for your country.”  We can start with CEO pay.  Maybe President Obama could create an executive order there.  Maybe the government should do business only with corporations that limit the CEO pay.  President Obama imposed a restriction on CEO pay for companies involved in the bailout plan.  However, many of them found ways around that little gem.  I think our government shouldn’t do business with any corporation that has excessive CEO pay.  If you really want to make your stomach churn, just check out the AFL-CIO site on executive pay.  It really will make you sick. If you’re too lazy to do the search, just check the top 100 here:

There is something wrong with business when the CEO can make such tremendous figures while the little people at the bottom of this food chain are continually asked to take a cut.

I’ll be watching the president tomorrow night.  I’ll be hoping that he’s thinking about those little people at the bottom, but I have this sneaking feeling it’s going to be more about the bottom line for business and how we all have to sacrifice a little bit more.  However, I know that guy at the top won’t be feeling a thing!

As I was looking around tonight I came across a great “read” on what’s happening with public sector unions.  This is a blog post by a teacher.

Just keep all of this in mind when your listening to the president Tuesday night.

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