jealous neighbors arguing to me. The poor to middle class people seem to dislike the wealthier persons here in America. It is a fact I have come to realize through life experiences. But people are responsible for their own choice.decisions and where they are located on that
"unfair" economic totem pole.

is market determined? It is not, hasn't been for a long time, and unless the SEC can enact more transparency for shareholders, never will be. It is cronyism at its finest. And it's a wonderful example of the failure of free market economics when power brokers get too large. There are a lot more capable administrators than there are MLB quality fast ball pitchers, but as long as there is not a competitive market for those folks, there will be the fantasy world of market based pricing for CEO's. If the market truly determined top executive pay, then we would not have $165 million retirement packages for failed administrations; and by failed I mean CEO's who ran companies out of existence with outrageous management practices. Shareholders are the owners, and despite your insistence that they run company, they have little or no say due to lack of transparency and preset agendas. Perhaps the next time you hire a dental technician, I will determine his/her pay and you will comply. And if she doesn't work out, then you will retire her at full pay for a decade or so. And I get a cut. You are just the owner, so pay up.

Where did I say athletes and entertainers pay was outrageous?

What I wrote was "Am I offended by the pay CEO's get? No more than by the pay athletes and entertainers get. The stars of business should be no less rewarded than they." I also pointed out the greater responsibility of the Execs.

I asked you and Len why the exec's pay was offensive but not the show people. The market has determined what each is paid, and there are consequences for others in both cases. How many working class fathers can still afford to take their kids to a major league game these days?

Do I feel a twinge of envy that a guy who can catch a football but can't put a sentence together makes 100X what I do? Yeah, but that is a character flaw in my own heart, and I have never suggested acting on that failing by imposing a limit.

Entertainers and athlete compensation is outrageous in your "free market" economy, but CEO pay is in line? You have just lost all credibility. You have sacrificed your heartfelt position for an emotional argument, since by the way, entertainers and athletes earn it too...but when entertainers and athletes bomb, they don't leave the shareholders with the bag.

It is not, I repeat, not, market based. If it were, then I would have no problem. The compensation committees hire compensation specialists who determine the package. And those folks work on commission and the committees are buddies. Come on Don, this is not a fantasy land in Ayn Rand's imagination. This is all about how much can they steal before anyone knows about it. The free market has no bearing on this. Entertainers are not public property and if an owner wants to pay some non-performing athlete millions, that is his prerogative and his wallet. When a compensation committee sets up a contract to pay a CEO millions based on quarterly profits, and if he fails, millions more, then that is money out of my pocket. And that is true whether I am a shareholder or not if I buy products or use services from that company. You complain about taxes on companies just being passed on to the consumer, well, the same is true with pay packages.

Your vote in the coming election represents a much smaller influence on the country than voting your shares in a corporation, but you still do it and expect it to make a difference.

Aside from which, I am curious why you seem to think it is OK for entertainers and athletes to get whatever the market will bear, but not executives who are responsible for the livelihood of thousands of employees and investors. Entertainers and athletes seldom concern themselves with any but themselves, so why are they so worthy?

In any case, trying to close 'loopholes' in an effort to enforce envy on the marketplace is an exercise in futility. For every loophole closed, two more even more devious will be found. The executives your are trying to deny what the marketplace is willing to give are far smarter and more capable than the bureaucrats you set to thwart them. And every new regulation and loophole will have its own unintended consequences.

are independent contractors. CEO's are employees hired as administrators to serve the interest of the shareholders, period. Yes, if you are a shareholder you have a vote, but unless you own a huge amount of the stock, your vote is meaningless. Also, the agenda at meetings preclude any substantive objections to policy. Finally, pay is set by a compensation committee composed of other board directors whose interest is not upsetting CEO's who will decide their compensation later on. There is not even a hint of free market labor negotiation. It is like having a board of your poker buddies telling a company what to pay you for running a lathe. In publically traded companies, where public investment is involved, that kind of cronyism is fraud and malfeasance on a grand scale. There is not any Adam Smith invisible hand determining those paychecks. You are right about loopholes, but they should be sealed to protect investors.

Prior to Clinton's limit on the deductability of executive salaries, talented CEO's got Rock Star pay and had the incentive to serve the shareholders well and keep that paycheck coming.

Afterward, in order to attract the best minds, Boards had to find other ways to offer that Rock Star pay in line with the regulation, so they offered performance bonuses, stock options and parachutes. But those created incentives to manipulate the timing of profit events to maximize bonuses and influence stock prices to maximize the profit of those options, even if, in the long run, that was contrary to stockholders interest. And if they got canned for it, there was always the Golden Parachute.

So, by pandering to envy, Clinton created the incentives that led executives to the very excesses that have proved so ruinous to shareholders. Bringing force to the marketplace always has consequences.

Am I offended by the pay CEO's get? No more than by the pay athletes and entertainers get. The stars of business should be no less rewarded than they. Unless I own stock in the company, its none of my business.

If I do own stock in the company, there is a mechanism in place for me to express my objection, and that is the stockholders meeting where I or my proxy can elect new Directors to the board if I feel they have been to generous in compensating executives. I certainly don't need government to intercede for me.

was put into place to curb the already exorbitant and unrealistic pay packages that had no reflection on the quality of work for the shareholders.
In short, the shareholders of a public company were being raked over the coals and had no power to rectify a situation in a company they owned.
Sorry, but everyone has blamed Clinton for just about everything, you will have to take a number from now on. The sad part about this mess is the number of retirement packages that have been stripped of value. The mantra of conservatives is that the working man should have control of his retirement and use the market to maximize the value of that fund. But, we refuse to allow complete transparency and a strong regulatory environment to help protect those retirement funds from abuse. Again, that is contempt for the worker…Wall Street wants his money to play with, and when things go south, well, oops. But, hey, the pensioner knew the risks and should know how the market works. The fact that even CEO's didn't know what kind of exotic investments were involved has no bearing.

You do not have a problem with CEO compensation? There is quite a bit of cronysim with many boards of major corporations. Don't get me wrong, CEOs deserve to be compensated, but I believe that the system has gone overboard. Shareholders are not afforded protection they deserve, and many CEOs are getting rewarded for running the company into the ground. Not only is it obscene, but it robs shareholder value. Certainly there are CEOs (Jack Welch of GE comes to mind) who are worth every penny, but people like Ken Thompson, for example, illustrate the depth of the problem. I think that you and I would agree that we will never have a perfect economic system, but it shouldn't thwart efforts to make it better...(I hope that I'm not bringing this conversation too far off the subject).

but Obama and his minions certainly do.

Not being a shareholder in Merril Lynch, it is none of my business what contracts they made with the executives they employed. Keep in mind that executive compensation is not an undistorted market. Clinton issued an executive order to the IRS to not treat executive salaries over $1 million a year as normal business expenses, starting this whole business of bonuses, parachutes and stock options to get around the limit. Unintended consequences strike again.

But there are elitists at every financial level, the worst snob I ever med was an unsuccessful classical musician. He tuned pianos to get by, but could talk of little but his unappreciated genius.

Neither I nor AM are "vilifying" wealthy people. To the contrary, it is the wealthy who have vilified the middle class. Not long ago the compensation chairman of Merrill Lynch was asked why O'Neal was not fired, thus losing his $132 Million stock option parachute. His answer was that the contract was for unethical behavior, not bad judgement. Now, please tell me how that is a market based contract in the interest of the shareholders. If a broker in that company kept losing money for the firm, he would have been canned in a heartbeat, whether it was an ethics problem or just incompetence. To me, that is a sense of entitlement and economic elitism that shows contempt for anyone beneath that status. Of course that is not everyone, but it is representative of the view of many top executives…that the middle classes are in their position because they are not as good as the top dogs. Some kind of untermenschen who deserve their lowly status. Respect for the folks who actually do the heavy lifting is seriously lacking in our drive for gold.

In reading most of your comments, I hope that you are not in the investment business. It would seem highly counter-productive for you to claim to manage portfolios but at the same time, hope for socialist NObama to gain the presidency. Just who in the world do you work for? Claiming to have a series 7, claiming to be a life management specialist but hoping for socialism is treason to your own profession. Don is absolutely correct in just about everything that I have read from him. You cannot claim to manage earned wealth while secretly undermining what you are employed to do. Please inform us who your company is so we all know who not to go to for advise. For the record, people have plenty of reason to associate NObama with distrust, disgust, radicalism, socialism, extreme liberalism and everything anti-american. Just ask his many anti-US mentors what they think.

The practices and values that accumulate wealth span generations, just as do the behavior that mires families in poverty for generations. Of course some families retain and continue to build wealth. They should be our role models, not vilified.

And I am sure that there are McCain supporters who are overly emotional. Many of them have fought wars for their country and see it slipping into socialism.

I am not so worried myself. I think perhaps each generation needs to endure a Carter before it will accept a Reagan. Obama will likely win, foul up so badly that he will lose the House in two years, and be a lame duck the last two years of his single term. Then socialism will be dead here for another 30 years.

never have been. But your idea that wealth follows good choice and free contractual agreements is a Pollyanna. All the failed banks left us with a mess and very wealthy executives. The era of income disparity in corporate America has all to do with contracts, but those are between the executives and compensation committees on the board, without any regard for shareholder interest at all. That those agreements have any relation to the free market is a total fantasy. Now, that being said, a lot of people have done well by owing a string of dry cleaners, being professionals, building a regional grocery empire. Those are not the problem children, but they do have a stake in America. Now if you want to call it stealing to raise taxes to fund a war, that is your call, but wrong. At some point, the individual in our country has obligations to that country, and war, economic disaster and natural disaster are some of those. The Adam Smith utopia is just that, a utopia. Multi-nationals are not your local entrepreneurs. The are, effectively, small governments.

Retiredguy -- as of late, the "frenzy" is well-documented. In fact, there are many McCain/Palin supporters that actually believe that Obama is a terrorist or a muslim by virtue of his name. What emotions do you think McCain's supporters have when they consistently refer to the democratic nominee as "Hussein"? Even John Weaver, McCain's former top advisor, is warning against such behavior. It has been reported by the WSJ, Huffington Post, CNN, and papers throughout the country and abroad.
Don, your assertion that the ultra wealthy earned their wealth is off-base. If you look at the Forbes 400 in America, a great portion (19%) inherited their wealth -- and if you peel the onion back, you will find that percentage greater when you look at the top 1% of the wealthiest Americans. To say that wealthiest "earned" it is a stretch -- much of it relies on happenstance.

The problem is not capitalism, nor is it the wealthy, the poor or the middle class. In every case, they responded to the incentives they were confronted with in what, from their point of view, was a rational manner.

It is not unregulated capitalism, there are plenty of regulations in place to accomplish the government's sole true function in the economy, that being to exclude force and fraud.

The problem is that the government itself injected force and fraud into the marketplace in an attempt to accomplish a social end. In doing so, it created distorted incentives that the market, operating without interference, would never have placed before the people making choices.

You cannot inject $2 trillion imaginary dollars into the housing market in an attempt create artificial prosperity without fueling a bubble that will eventually burst. Government did that and is solely responsible for our woes.

Most of income redistribution has been from the middle and upper class to the lower or poor class in the name of "fairness" The "rich" people have been supporting a vast majority of taxes already. So while you decry those rich people making too much money, how about decrying why people that pay NO taxes get a "refund" from uncle sam. Please please please explain how that works or why it is necessary and fair. This idea that everyone deserves money and a life just because they breathe air is exactly why the soviet union fell. It breeds an idle population that expects the government check whether or not they deserve a check. It only takes time before the taxpayers cannot keep up with the non-taxpayers and you end up with an eastern europe lifestyle. Go there, take a look, go to china and see how the people live. It is down right disgusting and inhumane.

Here is a clip, live and audible for everyone, including you, to listen to:
http://www.youtube.com/watch?v=xVFWahLTdUo
Now the words "brownshirts", "deadly frenzy" and "mob violence" are mine, but I think when crowds yell "kill him" I am not too far off. Especially when McCain doesn't try to discourage that kind of reaction to his rhetoric.
Again, however, I also stand by my description of the income redistribution that has already taken place. I own my own business, have made payroll, competed in the marketplace, served my country in the Navy and am a proud American. What I have seen in the past 7 years is sickening and disheartening. There is a willingness on the right to blame the middle class for this crisis, because discussion of the rich sticking it to the entire country smacks of class warfare. The problem is not failed capitalism, but unregulated capitalism. The folks at the top could not contain themselves, and the rest of us suffer.

Whatever accumulation of wealth there may be at the upper end of the scale is the result of voluntary transactions between free people. The wealthy got wealthy by making good choices and taking wisely weighed risks. That is how America is supposed to work.

The kind of wealth redistribution you speak of is just armed robbery filtered through the legislative process.

Taxation is acceptable as a way of ensuring everyone pays his share of the cost of the legitimate functions of government. And, most people agree that those who have more to protect should pay a proportionately higher share, but when you go beyond that to simply take wealth from one citizen to give it to another, that is just stealing. Just because you send tax collectors with guns to take it instead of playing Robin Hood yourself does not change that. It is just wrong.

I've told you a million times that you have to stop exaggerating. "the McCain/Palin campaign is whipping their crowds into a deadly frenzy, like the brownshirts of an earlier, horrible era. If the GOP has failed so badly that they are now resorting to mob violence, real Americans have cause to worry."

Wow!! Where do you get your news, Len? CNN? NBC? MSNBC? The two channels that I watch for news, ABC and FOX, haven't mentioned, "deadly frenzy," "brownshirts," or "mob violence" in the GOP campaign.

If you're content with socking it to everyone with an AGI of $250K or more, which includes many small business owners, and giving what's confiscated from them to people who earn less, then we know what type of a society you want for our country. I sincerely hope that enough Americans see through this Obama/Biden smokescreen to realize what it really is.

has already taken place, and it is from the middle class to the top 1%. The middle class kept our economy out of the tank from 2002-07 on their credit card, the top absorbed all the money it could, made no investments in America, and basically gave everyone the single finger salute. Sorry, but it is time for someone other than the middle class to give both blood (the war) and treasure and express more patriotism other than a lapel pin. This debacle on Wall Street is hurting the real workers in this country to an extraordinary degree, with the folks at the top having to curtail…nothing.
They already never bothered to invest in America, so why help now? And now the McCain/Palin campaign is whipping their crowds into a deadly frenzy, like the brownshirts of an earlier, horrible era. If the GOP has failed so badly that they are now resorting to mob violence, real Americans have cause to worry.

Obama calls it, "economic justice," and Biden refers to it as fairness, but regardless of what fancy term they hang on it, it's still income redistribution, a mainstay of Marxism. I suppose the Obama administration (Heaven forbid!!!) will have an economic justice cabinet officer. His department will decide how much each of us should earn, and those who earn too much will be directed to be fair to the others and share his/her wealth with them. Of course, sharing is not a matter of choice, you either share willingly or the government will force you to share. That's what could be coming to our nation beginning January 20, 2009. No thanks.

Why not lay the blame where it belongs? Congress.

It's their incessant tinkering and meddling that caused this mess. Much of what the POTUS desires has to go through Congress.

Real power is who controls the money. The House of Representatives controls the money. We need to consistently remind them they work for us.

They need to out of our business, stay out of our pockets, adhere to the Constitution and conduct themselves in accordance with their oath of office.

Nice try, but your questions are a stretch.

Joe Six Pack wants a car, but doesn't have the money for it. Rich Guy has money and he is not using it as Joe thinks he should.

Question 1: Is it morally acceptable to you for Joe to rob Rich at gunpoint to get the money for his car?

Question 2: Would it be more acceptable if Joe got a gang together to commit the robbery for him?

Question 3: What if the gang is 51% of the population?

It is not only that taking someone else's wealth by force(and government is nothing other than force) is economically destructive, it is wrong, and filtering it through democracy does not make it right.

If it is wrong for you do do it as an individual, it is wrong to vote for it.

But the seed corn never got planted. While the economy, and the Dow, did well on the middle class credit card, the top 1% just accumulated that middle class money and is sitting on it. That is income redistribution alright, from the bottom to the top. We are not talking about stripping wealth to balance incomes, we are talking about the willingness to pay for the war, infrastructure, debt and other ignored expenses. These are real, not imagined or theoretical problems. If we decide to wait until all the stars are aligned for all the accumulated wealth to turn us around, we will be waiting for a long, long time. I am not sure we can afford to do that.
The one good thing with this global meltdown is that it is global. And other countries will work hard to see us turn around the biggest market in the world.

. . . but, what if Poor Joe Six-Pack wants an affordable economical car that will give him a reliable ride for the next 15+ years, and a tv that will also last for many years that also will not cost him a bundle? You saying they should walk and miss American Idol so that Rich Guy who already has all the luxuries may or may not do the right thing - which is debatable since those golden parachutes just don't go as far as they once did.

Sorry, but after sitting through nearly 2 weeks of nothing but big losses in the stock markets - these arguments just don't make a lot of good sense to me.

"then we need to tap that wealth for our country's sake."

What a nice phrase, "tap that wealth" as though it were a spring or spigot you just turn on and it flows freely. But it is very appropriate that you mentioned Willy Sutton,, because what you are talking about is indeed stealing. The rich already pay a larger fraction of the taxes than their share of the income, so demanding more is not asking for their fair share, it is pillage.

"It is not soaking, it is do the responsible thing."

No, it is eating your seed corn.