Big Money, Little Opportunities

Two news items on employment and income shocked the nation, although for different reasons. The news provided fodder for those critical of capitalism and champions for fairness in America.

The headlines blared: CEO pay at 250 times the average worker, with the top ten breadwinners pulling down $420.0 million a year. The poster boy for this unbridled greed is the ever-so-humble Larry Ellison. His $76.9 million pay package was bolstered by stock options. In fact, Ellison actually turned down a $1.5 million cash bonus he was eligible to receive as well. The former CEO of Oracle, who is able to turn down cash, was rumored to have been interested in purchasing the LA clippers for far more than the team is worth; I am not upset about this.
The top CEOs make an average of $10,500,000 a year. However, 112 professional baseball players pull down ten million bucks or more per season. There is no howling by the income inequality crowd, or a take on sharing the wealth, if you can hit a curve ball, swish a three, or throw a game winning bomb on the last play of the game. But let us take an honest look at how much Larry Ellison has done for his dough, and how much Jim Johnson, a relief pitcher for the Oakland A's, has done for his.

Johnson joined the league in 2006. While a good player, his impact on the economy versus Ellison- no contest.

The argument over CEO pay is old and will only become more contentious as pay edges higher. The understanding of the demands facing these CEOs will never be appreciated as long as their time is compared to someone grilling burgers or working in the mailroom. Do not get me wrong, I think the person on the Quarter Pounder grill or in the mailroom could one day be the CEO. However, that journey requires learned skills that are more exceptional than the ability to run fast in the 40- yard dash.

Google shocked the nation by voluntarily revealing its corporate diversity. There were several storylines in the news.

This is critical news that we all should stand up and make a decision to fix. Probably the least contributing factor is actual racial or gender discrimination by Google. I am sure there is a mostly white geeky culture that is as clubby as any other sub-culture. Nevertheless, it is about a skill set driven by sacrifice and hard work, and supported by a great education (not always from a school system).

I am not sure how and why young girls are dissuaded from science and engineering careers, but it happens between grade school and high school. The problem has gotten worse as the glare of the spotlight has become more intense. There is a cultural aspect to this, including an intimidation factor, and the notion that science and technology are not fun. Some do not perceive this as "girly" stuff. This is a difficult problem, and one that many people are trying to "correct."

I do know for Blacks and Hispanics, that the big problem has been liberals protecting us from difficult courses that might mean lower grades. Therefore, we get a free pass or are discouraged from pursuing more intellectually challenging opportunities. Parents that buy into this notion because it is great their kid is getting A's, have to accept responsibility when the real world does not grade on the curve, and finally introduces competition and real accountability.

I understand that poor schools may not have computer labs, but the core of the issue is that students are being mollycoddled, and the learning focus is about injustices of the past, and all about the meanness of the current world.

Google can try to fix its situation, but skills needed for their jobs are a process that begins when a kid is young. The fact is tech companies are in desperate need for people with the right skills, and even fewer white Americans have the proper skills. With public schools watering down grades, removing the notion of competition, and re-defining intelligence, the entire nation is going to have trouble getting these high- paying jobs, which means more visas or more outsourcing.

Moreover, I can only hope that we react with smart action, instead of indignant outrage at these stories. CEO pay is not hurting America or Americans; it is a lack of skills, and the long embrace of excuses and mediocrity, that are at the heart of income inequality, and the failure to achieve the great American Dream.

Reiterating a theory as to WHY, in a recession or economic depression, there seems to be such a vast disparity between the income levels of the vast majority of people, and the very few who are at the top of the chain.

Part of the value of money, in any economy, is the velocity at which it moves through the control of people, and how frequently it makes the transition from one user and the next. Simply having a store of some medium of exchange, without either adding to, or taking some away from the pile, makes the medium of exchange just a glittering pile of - pretty things. An ornament. About as much use to the world as a pile of rocks.

But the dynamic of taking part of this pile of - stuff - and exchanging it for something of value, then starts the cash flow, as more and more people participate in the exchange of this medium for other real and useful goods and/or services, the further, and the faster, this exchange proceeds, the faster the pile melts away, but even as it is flowing out, to do its service among the general population, still some if flowing back in, keeping the pump going. The plutocrat still has a large stash of whatever medium of exchange may have been in his possession and control, but because so much of it is out and providing for the movement of goods and services, it shall not be quickly depleted, because of the return on the investment put out there.

But if for whatever reason, the exchange of goods and services is interrupted, the velocity of the money slows or even stops, except that the return flow is a lagging feature, and the cash begins to pile up in the hands of the plutocrat once again. Meanwhile real exchanges out among the many slow to a trickle or stop altogether, and the disparity between the great mass and the ones at the top becomes starkly apparent.

One of the reasons is that the distribution and frankly, the loaning out of money at interest, comes to a crashing halt, because of excessive intrusion in the normal workings of the market, through regulations or extraordinary calamities, like war, or famine, or devastating natural disasters. Removal and repeal of the excessive regulations has the very immediate effect of kick-starting the entire process all over again, and just the natural drive and energy overcomes the damages wreaked by war and natural disasters. Famine, also a factor, is almost always a man-made hazard, compounded by the fact that there may very well be enough and more than enough to go around, but the means of getting the desperately needed goods is thwarted by “authorities” that know so much better than anybody else how the distribution chains should be managed.

If all the “smart” people would just STOP trying to “fix” things, the natural flow of money would resume and the marketplace resumes its highly efficient method of assigning worth and distribution to each as a measure of the relative value or importance of each facet.

The free market works every time it is tried and allowed to proceed at its own pace. It is the artificial and counterproductive “fixes” that ruin any recovery before it is well begun.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Google’s Diversity Problem
Race	Tech Jobs	Non-Tech Jobs	Leadership Jobs
White	60	65	72
Black	1	3	1.5
Hispanic	2	4	1
Asian	34	23	23