Worse than guilded age.

[Special K]

So what other vehicle is available? What did people do before 401Ks and IRAs? Maybe nothing, worked til 65 and died. Personally, my retirement is in my business. If it fails, so do I. 23 years experience and 5 on my own so I'm optimistic so far.

I believe most companies offered pensions before the days of the 401k, although that was back during a time when employees were expected to be loyal to their employers and work for the same company until they retired so that they could earn their pension.

Owning a business would be great, although given the high failure rate I'm not sure if it can be recommended as a viable alternative to a 401k/IRA in general.

 

[highland145]

I believe most companies offered pensions before the days of the 401k, although that was back during a time when employees were expected to be loyal to their employers and work for the same company until they retired so that they could earn their pension.

Owning a business would be great, although given the high failure rate I'm not sure if it can be recommended as a viable alternative to a 401k/IRA in general.

Pensions started during the depression when we had wage controls. Employers wanted/needed to attract better people and that was one way to do it. My Dad had both but that company has now cut the pension, like most.

I don't know what the failure rate is but it may be as high as you say. I see places come and go regularly, boutiques and the type. Places that don't advertise, have no experience or insufficient funds( the #1 reason for failure). Nothing is guaranteed but you can be prepared with groups like s.c.o.r.e. for mentoring.

As of today, I wouldn't go back to my old job (never say never). I have 100% of the risk but I get 100% of the reward for my work.

 

[blackangst1]

I would agree + what alkemyst said a couple of posts down. In my limited economic understanding: I think they, stocks and the corps, are linked. If a company's shareholders cash out because of loss of faith in that company then the stock will drop. Someone will be left holding the bag but the corps value based on the stock drops which should put them in a bind when they want to raise capitol, get loans or pay some ceo mega $$$$.

So we put our $$ in our IRA, the broker buy stocks and our $$ go into the market. We have all seen/bitched about the bonuses paid and the losses taken by shareholders. We are supporting them (brokers) very nicely, it appears, with not much( or nothing) in return. If the $$ didn't go to the corp in the first place, they couldn't pay the $1000 to $1 mentioned earlier. Craig's reform would be nice but don't hold your breath.

So what other vehicle is available? What did people do before 401Ks and IRAs? Maybe nothing, worked til 65 and died. Personally, my retirement is in my business. If it fails, so do I. 23 years experience and 5 on my own so I'm optimistic so far.

Just as a side note, it would be foolish to not take advantage of something like a SAR/SEP being self employed.

 

[BoberFett]

The amazing thing about the Democrats and the rest of the liberal hoi polloi is that the left-wing elite have got them so thoroughly bamboozled that the more un- and under-employed, in-debt, frustrated, and angry they become, the more they scream for yet another round of the same policies (higher taxes, more regulation of big business, more government programs for the poor and downtrodden) perpetrated on them by Democrats, policies that have pushed them further and further down the economic ladder and correspondingly increased the fraction of the total economy in the hands of the few.

Why yes, you're right.

 

[BoberFett]

A equally frightening study would be to do the same ratio comparison for Senators/Congressmen to the average citizen 1970 to current. That would open some eyes

First you'd have to find it. Our "representatives" seem to conveniently forget about massive sums of income or property.

What percentage of US congressmen fall into the top .01%?

 

[werepossum]

My opinion of you changes for the better

Thanks. This seems to be a good day for me.

 

[Fern]

Absolutely.

I have a question. How do these CEOs make so much money?

1. One bit of info I think would be interesting, but is omitted from the article above, is how many employees are under a CEO now compared to 1970?

Think of a pyramid, the more people under the CEO who sits at the top of that pyramid, the more money the CEO will make. I think through growth and consolidation that pyramid has grown huge.

2. The big corps are huge these days, they are not only diversified but also international. If a CEO can make a few percentage points improvement to finances, they can and should heap huge rewards. A salesman gets a commision, why not a good CEO?

From the shareholder POV, yeah I'd give the successful CEO millions because it gives us shareholder 100's of millions.

3. Exec pay type consulting firms. bad model, their incentive is to recommend higher and higher pay. Higher pay means their services are more valuable. Do we need a super expensive firm to analyize pay for the lower level workers? No.

Their higher pay recomendations make them more popular with, you guessed it, the exec's themselves. So these CEO's getting the high pay often sit on other company's Boards. Who are they gonna seek to advise on Exec pay issues? You got it.

If you're a CEO sitting on some other company's BOD, what happens when that exec pay firm recommends even higher pay? You eventuial go back to your own company and point out that other CEO's raise and claim one for yourself.

Now, given that CEO's success or failure can greatly affect the wealth of the shareholders, shareholders inclined to throw big money around just to compete with other companies in the CEO marketplace.

It's a giant circle jerk pumping up exec pay. Some parts justifiable, some not.

---------------

This kind of information is just a good argument for us to get back to a real inheritance/gift tax system that prevents intergenerational weath accumulations (which was it's original purpose). It's too full of loopholes now; that just allows wealth to be permantly 'trapped' by a select few.

I have no problem with successful/productive people making a pile of money. I do have a problem with allowing them to tranfer it to subsequent generations creating an elite caste here in the USA. I think of Paris Hilton etc. If you give any dolt enough money it's not hard for them to make more. The hard part is making a bunch out of none.

Fern

 

[werepossum]

1. One bit of info I think would be interesting, but is omitted from the article above, is how many employees are under a CEO now compared to 1970?

Think of a pyramid, the more people under the CEO who sits at the top of that pyramid, the more money the CEO will make. I think through growth and consolidation that pyramid has grown huge.

2. The big corps are huge these days, they are not only diversified but also international. If a CEO can make a few percentage points improvement to finances, they can and should heap huge rewards. A salesman gets a commision, why not a good CEO?

From the shareholder POV, yeah I'd give the successful CEO millions because it gives us shareholder 100's of millions.

3. Exec pay type consulting firms. bad model, their incentive is to recommend higher and higher pay. Higher pay means their services are more valuable. Do we need a super expensive firm to analyize pay for the lower level workers? No.

Their higher pay recomendations make them more popular with, you guessed it, the exec's themselves. So these CEO's getting the high pay often sit on other company's Boards. Who are they gonna seek to advise on Exec pay issues? You got it.

If you're a CEO sitting on some other company's BOD, what happens when that exec pay firm recommends even higher pay? You eventuial go back to your own company and point out that other CEO's raise and claim one for yourself.

Now, given that CEO's success or failure can greatly affect the wealth of the shareholders, shareholders inclined to throw big money around just to compete with other companies in the CEO marketplace.

It's a giant circle jerk pumping up exec pay. Some parts justifiable, some not.

---------------

This kind of information is just a good argument for us to get back to a real inheritance/gift tax system that prevents intergenerational weath accumulations (which was it's original purpose). It's too full of loopholes now; that just allows wealth to be permantly 'trapped' by a select few.

I have no problem with successful/productive people making a pile of money. I do have a problem with allowing them to tranfer it to subsequent generations creating an elite caste here in the USA. I think of Paris Hilton etc. If you give any dolt enough money it's not for them to make more. The hard is making a bunch out of none.

Fern

That's a good point. I think CEO pay should be more tied to performance, but that's a matter for the shareholders, not the voters. The form of their payment's taxation though is a matter of public policy, and the Democrats should address that. Whether you are John Edwards or the CEO of Dewey Cheatham and Howe, you should not be able to take what is essentially a wage (often completely unearned) and have it taxed at a lower rate as an investment.

 

[JS80]

Poor people have:
1) Food
2) Housing
3) TV
4) Cell phone
5) etc

Nope, don't see a revolution anytime soon.

 

[alkemyst]

That's a good point. I think CEO pay should be more tied to performance, but that's a matter for the shareholders, not the voters. The form of their payment's taxation though is a matter of public policy, and the Democrats should address that. Whether you are John Edwards or the CEO of Dewey Cheatham and Howe, you should not be able to take what is essentially a wage (often completely unearned) and have it taxed at a lower rate as an investment.

Everyone agrees with this...however; like the article states, it's too polar...the workers and even higher management are struggling to make those CEO's their big paychecks.

The biggest kick in the teeth is all these bailouts...bad year, cut everyone's wages...then cry. Get cash, profit.

 

[werepossum]

Everyone agrees with this...however; like the article states, it's too polar...the workers and even higher management are struggling to make those CEO's their big paychecks.

The biggest kick in the teeth is all these bailouts...bad year, cut everyone's wages...then cry. Get cash, profit.

The biggest kicks in the teeth for me are the indirect bailouts, like where the federal government bails out AIG so it can pay its insurance claims to companies like Goldman Sachs which then issue huge bonuses. If the taxpayer needs to bail out AIG, then everyone whose profit is thereby guaranteed after the fact needs to be in on the negotiations and give some. Just like bankruptcy court, renegotiate everyone's contract so that those at the top don't make out like bandits and then lay off those at the bottom. I really don't want to succumb to wealth envy, but we're propping up the top under the guise of propping up the bottom.

 

[zinfamous]

Reagan's fleecing of the American citizen continues, as his bones continue to rot.

 

[Munky]

I don't have problems with successful CEO's making big bucks IF they do it without cheating. The problem is a lot of these banksters do cheat, and they lobby congress to legalize it.

All these insolvent banks should have been allowed to fail. They made risky gambles, and they lost, so letting them fail would let the market self-correct. These bailouts and government intervention are just sweeping the dirt under the rug, but you can't run away from laws of math, and eventually reality will bite this corrupt system in the a$s... badly.

 

[jman19]

"Guilded" Age? Really?

 

[highland145]

Just as a side note, it would be foolish to not take advantage of something like a SAR/SEP being self employed.

I'm was saving my $$ for an expansion which would put more $$ in the pocket quicker. The sep was on the list after that even if I left it in cash. Now, the owner is selling my building. Bro and I are going to try and buy which will take up my expansion $$. If it goes through, then long term income of $1400/mo. If not, rent in my town is running $1100/mo.

 

[highland145]

That's a good point. I think CEO pay should be more tied to performance, but that's a matter for the shareholders, not the voters.

And we all do what with our proxy statements? Trash. Have any of you ever voted? I say the UAW gives up on the auto industry and starts the United Stock Holders Union. They represent us when it's time to vote for board members. Assuming corruption stays out, we, the shareholders, should come out ahead.

 

[JS80]

That's a good point. I think CEO pay should be more tied to performance, but that's a matter for the shareholders, not the voters. The form of their payment's taxation though is a matter of public policy, and the Democrats should address that. Whether you are John Edwards or the CEO of Dewey Cheatham and Howe, you should not be able to take what is essentially a wage (often completely unearned) and have it taxed at a lower rate as an investment.

Except in real life, in 99% of companies, shareholders have zero say in executive comp. The BOD is stacked with execs of other companies; it's in their interest to inflate compensation.

I am not disagreeing that we should reward executive performance. But in real life executives get paid the SAME huge compensation, whether they perform or not. I've experienced this first hand. I've helped design executive comp plans for the company I work for - and we stacked it so we get paid $$$$ no matter what.

Hell, in some cases, they get paid MORE when they do poorly and are fired.

 

[blackangst1]

"Guilded" Age? Really?

I caught that too. But hey...its rough not being in a high end raiding guild. At least on my server.

:awe:

 

[BurnItDwn]

I think there needs to be more brackets ... and bring the rate back up to what it was in the 40s and 50s for the very very tip top bracket ....

 

[GuitarDaddy]

Poor people have:
1) Food
2) Housing
3) TV
4) Cell phone
5) etc

Nope, don't see a revolution anytime soon.

Couple of missed paychecks or failure to extend UE will fix that, but keep convincing yourself revolution isn't possible.

 

[werepossum]

Except in real life, in 99% of companies, shareholders have zero say in executive comp. The BOD is stacked with execs of other companies; it's in their interest to inflate compensation.

I am not disagreeing that we should reward executive performance. But in real life executives get paid the SAME huge compensation, whether they perform or not. I've experienced this first hand. I've helped design executive comp plans for the company I work for - and we stacked it so we get paid $$$$ no matter what.

Hell, in some cases, they get paid MORE when they do poorly and are fired.

True. I've never owned individual stocks, so it's not my fault. And at the company of which I am a part owner and a board member there are no golden parachutes. (Granted, mostly because we can't even afford golden hankies, but it still counts.)