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May 19, 2004
It's Good To Be King

From the Center on Budget and Policy Priorities:

A new study finds that total median compensation for CEOs in the S&P 500 rose to $4.6 million last year, a 27% increase from 2002. According to census data released last fall, the median household income fell to $42,409 in 2002, a $500 drop.

My, my. Up 27%! How nice it is to reap the just rewards of a well-structured tax code. (Please note that CEO compensation for 2003 is being cited, next to median household income for 2002. It doesn't materially change the story, but I always like to make a note of these little discrepancies.)

From the same census data link cited above:

Census data released today show that poverty increased and median household income fell in 2002 for the second consecutive year. The number of poor people increased by 1.7 million to 34.6 million; the poverty rate rose from 11.7 percent to 12.1 percent; and median household income fell by $500, or 1.1 percent, to $42,409. There were 3 million more poor people in 2002 than in 2000, the last year before unemployment began to rise.

In addition, those who were poor became poorer on average. The poverty rate — the percentage of people with incomes below the poverty line — was lower in 2002 than in most other years of the 1980s and 1990s, although higher than in most years of the 1970s. But the basic measure of the depth, or severity, of poverty — the average amount by which the incomes of those who are poor fall below the poverty line — was greater in 2002 than in any other year on record, with these data going back to 1979.

Note this:

“Also, Congress and the President chose to exclude low-income working families from the increased child tax credit benefits that went to better-off families this summer,” Greenstein added. “Yet this year’s tax legislation will give people earning $1 million or more an average tax cut of $93,000.”

Because…why?

Because no one needs a child tax credit less than the poor.

No, no, because no one needs a tax break more than the rich.

Because…I don't know. It's too hard of a question.

Because poor people don't vote, I guess.

Posted by AnneZook at 08:32 AM


Comments

Nice summary of how bad things are. I believe that someday America may become a capitalist nation, but till then we will have rule by the rip off artist, that is, the CEO. It is worth remembering that every penny that goes to the CEO is a penny that does not go to the capitalists, that is, the investors. And the investors are, in part, people like you and me, investing through our 401ks and mutual funds. But even if there were no 401ks and mutual funds, even if the middle class stayed out of the stock market and left it to the rich, I think we would still get much better economic performance if the investors (the rich investors) had more power to control their corporations. As things stand now, CEOs have to be outrageously bad before enough stockholders band together and threaten a board revolt. In normal times, the CEO gets to hand pick their board, and therefore control it, to the detriment of those who actually own the company.

Let's suppose for a moment that right-wingers are correct when they say labor unions are evil because the power of labor unions causes money to be diverted from the capitalists to the workers. If that's true, then the power of the CEO's is equally evil, as the CEO's, just like the labor unions, divert money from the capitalists and into their own pockets.

Socialism and capitalism may have their flaws, but I believe CEO domination represents the worst of both worlds.

Posted by: Lawrence Krubner at May 19, 2004 10:41 PM

What always astonishes me is the claim that "market forces" drive these appalling salaries. They say they can't hire anyone competent for less than $50 million a year.

Posted by: Anne at May 23, 2004 09:32 AM