Saturday, April 28, 2007

Economically Challenged Say No to Barney Frank’s Say on Pay::By Tom Borelli

This article draws into stark relief that The Democratic Party is still deluded by power and economically challenged. It is power-induced near-sightedness that presumes the propriety and utility of the economic Jugheads in Congress deferring over how commercial operations ought to proceed. They draw attention to the question of whether CEO’s ought make hundreds of times what the average worker makes, and assume that reflexive sentiment gives them the right and wisdom to intervene. The focus should remain on the 1st question. As to the 2nd question, no, they do not have the right, morally or constitutionally, and even less do they have the wisdom, even if they had the right.

A shallow response could easily sink to the unrefined reaction: “Gee! I wish I could make millions of dollars a year! Executives shouldn’t make hundreds of times more than other employees!” But, that is not the point. The point is that it’s none of my or Congress’ business. If boards of directors do wrongly, the market will punish them and they will correct it. Their job is to pursue the highest possible profits and best return possible for the investors for whom they compete! They hire executives in a competitive market for the same reason, just like sports teams hire players and movie studios hire actors: for money. And in this way, consumers get the best products at the best prices, or the organization loses to its competitors.

And shareholders could already vote, if they wanted. This lame-brained idea would artificially force them.

Lawmakers who propose or support these kinds of things are eith dishonest or economically challenged.


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