This made me go WHAAAAAAA!!!!-

[Nehaita]

Yeah, I know I am really that bored right now....

So, I was having a conversation with my dad and he was telling me about how some lawmakers are talking about putting a salary cap on the CEOs of umm.." big oil companies." To this I responded by first going WHAT! NO THATS WRONG and then I asked him what he thought. Sadly he agreed with the lawmakers. Which made me want to throw up a little. I us taxing these big industries is enough. I do not think we should put a salary cap on anyone! This is a slippery slope to go down. I mean whats next. The vice presidents? board members? managers? Ideas, thoughts, anything will be helpful and beneficial in my half an hour of slacking off

Neha

[Chris Grieb]

A very quick comment would be that I have no problem with successful CEO's getting large salaries. Unsuccessful ones should not really get any salary. Taxes should not go up on a person because he or she is successful.

[sbeaulieu]

You bring up several issues.

1. Legality of taxation - While it is law, the taking of something (money in form of taxes) without putting the effort in on the making/processing/distribution/ of the product goes against free trade. There is no giving back from government on your paid taxes. That is to say, the money they take isn't put into programs/grants that you freely agree to.

2. The government trying to put a salary cap on CEOs is downright wrong. What external agency has the right to dictate what you can or cannot make? If CEOs are giving themselves raises at the expense of their workers wages, that's wrong. But if all his/her workers are content with their work, pay, and compesation, and they have entered into that contract willingly, I see no problem with CEOs doing that. They have worked hard for their success and should be entitled to enjoying their profits.

3. Any enterprise of business works off of supply and demand. If you make something I need, then you and I would come to an agreement. In most cases, I would buy what you make if I needed it. Since oil is in demand, money is certainly going to be made. As industry booms in third-world countries, the demand for oil is going to increase. Since there is a finite amount of oil that is refined/sold daily, they have to increase prices. This ensures that everyone will have a chance at buying that product.

All in all, the government capping CEO salaries will not impact how much the company makes. But I think their attempt is to stem the amount of money CEOs are making vs. what the company is spending to purchase the oil and refine it. There's a disconnect when the company is spending more, but their CEOs are making more.

~ Shane

Edited September 23, 2008 by sbeaulieu

[Nehaita]

Shane, excellent points. One of the things that I have been thinking about lately is financial aid. My boyfriend's dad actually brought it up one day when we were all talking about welfare and different forms of it. It is a type of welfare. For example, one of the reasons the comminuty colleges are cheap is because of the subsidized cost of tuition. But then if I choose to attend a college which uses this subsidized cost isn't the agreement between myself and the college. How the college funds itself is totally upto them. As you can probably tell I need to think more about it and come to a conclusion that I can live with

Chris, I have had several different arguments with my dad about taxing the sucessfull people. I am opposed to it and he loves it. I am not rich but I don't want to take money from other people's income. Everything I own I have worked very hard for. Not to mention, my 'stuff' means a lot more to me because I earned it. I think I have mentioned it here before, but I spend my time at work listening to people who are my age and are on welfare talk about how good it is and how easy it makes their lives. I think we need to take a closer look at the welfare system of this country. I think the soultion is easy, the transition will be hard and people like Toohey will need to be corrected( Yes I finished the Fountainhead today )

I think when he first told me this I was on my way to school and could not even believe that he would say something like that. So, sadly, I was speechless. But now I am prepared to have this discussion with him B)

Neha

[Chris Grieb]

Hallow;

Ayn Rand in the Objectivist addressed the question of scholarships and financial aid. I don't have them anymore so I can't give you a date of the issue.

Does your father think successful movie and sport stars should be taxed more?

[algernonsidney]

It's an understatement to say that CEO pay has gotten totally ridiculous. It is often an issue where people are not getting what they deserve. Take Carly Fiorina's severance package, for example. One of the most principled CEO's, John Mackey of Whole Foods, recently decided to forgo his salary. He figures that he has already made enough money anyway.

It seems that boards are not taking enough control of the situation. If anyone has an answer as to why the boards are not doing this, please give one. The stockholders are the owners of a corporation. However, it seems that boards don't always act in the best interest of the owners.

If government gets involved, it will only get worse.

One problem does seem to be the issue of limited liability. A privately owned business does not this kind of protection. Limited liability seems to create a situation in which the leaders are rewarded for picking winning strategies but clearly are not punished for picking losing strategies.

It also seems that being a "successful" CEO requires one to be a politician. Being a politician is much different from running a business. If you want to read a good story about an excellent CEO who did not play politics, read the book _Southwest Passage_ by Lamar Muse. Muse was the first CEO of Southwest Airlines and laid the foundation for Southwest's many tremendous successes. He was fired / resigned from Southwest in 1978 largely for political reasons.

Like most politicians, it seems that some CEO's simply go into a company and milk what they can from it. Then they leave and go somewhere else. They may also get fired for rank incompetence and leave with a nice big severance package. Just look at Carly Fiorina, who got millions for leaving HP in a shambles.