Last Monday, Republican Rep. Jeb Hensarling (Tx.) joined Republican Reps. Scott Garrett (N.J.) and Bill Huizenga (Mich.) to urge the Securities and Exchange Commission (the federal agency that regulates Wall Street) to forget about the duly enacted CEO pay reform (in the 2010 Dodd-Frank Act) that requires companies to disclose the ratio between their CEO and worker pay.
Corporate CEOs hate this law, so the Republicans don’t want the SEC to write the regulations needed to enforce it. But aren’t executive branch agencies (in a system of democracy) supposed to enforce laws that the legislative branch has voted into law? In a democracy, yes. In a plutocracy, that depends. In a plutocracy, what top corporate CEOs want, they usually get.
The SEC, we learned last week, has now decided to shelve its long-overdue CEO-worker pay ratio regulations another year.
- CEO pay at major fast food companies, a Demos study estimates, is running over 1,000 times the earnings of average fast food workers.
- Louis Chenevert, the United Technologies chief exec, just rushed into “retirement”. His going-away severance package, Bloomberg News reported last week, appears likely to total $172 million. Chenevert already owns a stash of United Technologies shares worth $64 million.
- America’s 400 richest are collecting far more of the nation’s income than they did two generations ago — and paying Uncle Sam far less. To fudge these facts, pals of plutocrats are having to work overtime.
"Pay Pals" is a fascinating interactive online resource from the Huffington Post and the Center for Economic Policy and Research. Pay Pals lets web surfers discover just how much the directors of America’s top 100 corporations are paying themselves and their chiefs.
Over the last several years big American corporations have been spending hundreds of billions of dollars in mergers and acquisitions. Recently Cypress Semiconductor Corp. announced an agreement to acquire Spansion Inc. in an all-stock transaction valued at about $4.0 billion (This is a relatively "small" deal compared to others we've seen.)
Large American businesses have been able to afford to lobby Congress for less regulations and less taxes, contribute millions to political super PACs and spend billions to buy each other out, but they can never afford to raise wages.
David Cay Johnston: Real World Contradicts Right-Wing Tax Theories
"We have been told that cutting tax rates spurs jobs and higher pay, while hiking taxes does the opposite. Now, thanks to recent tax cuts in Kansas and tax hikes in California, we have real-world tests of this idea. So far, the results do not support [Arthur Laffer's theory] that lower tax rates always result in more and better-paying jobs. In fact, Kansas’ tax cuts produced much slower job and wage growth than in California ... The dominant economic theory holds that raising the minimum wage should result in fewer jobs, though possibly more total income ... But real world data does not support the theory. Various studies have shown that employment and income may both rise with increases in the minimum wage ... Ultimately, real world results trump theory. Actual changes in the number of jobs and what they pay should be used to set policy, not ideology, assumptions and expectations."
* Also see my earlier post at the Economic Populist: CEOsand their PayPals