Originally Posted by Swan
- CEO don't make astronomical salaries -- even considering stock options. A CEO making $5 million per year in salary, plus, say, another $3 million in stock options is often villified. Why? A CEO with that level of compensation is responsible for tens of thousands of employees. That is, he engineers the strategy that puts food on their tables, roofs over their heads, and cars in their garages. He also is responsible for producing products and services that deliver value to untold numbers of individuals and other businesses, including the smaller businesses who depend on the corporate giant as a major source of their revenue.
On the other hand, Michael Vick just signed a $100 million deal for what? Five years of football? How about Barbara Striesand's minimum of $20 million to make a movie? Where's the outrage? And these salaries do not produce economic impact spin-offs anywhere on the scale as those produced by corporations. Barbara and Vick do not employ thousands. Their value impact is fleeting; it is momentary entertainment.
But I would also be first in line to defend them. If I could make $20 million for doing some lame bathroom humor crap like "Meet the Fockers," sign me up! They are smart investors; that is, they invest their talents to make the most profitable returns they can. As do we.
- Are manufacturing jobs really all going overseas? Here in Alabama there was moaning and lamenting the fact that apparel companies were closing and headed off to Mexico. Good. I'd bet the Mexicans could use the jobs. Besides, those sewing jobs were extremely low-paying in the first place.
Then an interesting thing happened. Honda, Mercedes Benz, Hyundai all opened manufacturing plants here. High paying auto jobs. Low paying manufacturing jobs were replaced by high paying manufacturing jobs. Seems like a decent deal to me.
Economics isn't so hard: Money always seeks certainty. Investors always seek profit.
Well stated, Harvardtiger. You mentioned things I was too lazy to post about, especially on a skiing forum. BTW, the fact Harvard is the 2nd best school in Cambridge is nothing to be ashamed of.
bismeral, I don't see any "avalanche" of ecomomic upheaval. I don't even see evidence of any "snow". Today's capitalistic systems, including in the US, have never been healthier. Outsourcing of many American mfr jobs and certain service/tech jobs are an indication of that health. Like most economic paradigm shifts, it negatively impacts the specific families whose job skills or industries are less current and being phased out, but it positively affects the country as a whole (e.g., with better goods, cheaper goods, etc.). In the same way the LACK of a forced US governement subsidy program to keep horse and buggy companies falsely competitive with the advent of the automobile helped the country as a whole, so too forcing companies to keep apparel manufacturing jobs in the US will only hurt American workers and families in the long run. Don't kid yourself that companies like Toyota are being noble and caring by keeping certain plants in the US and outsourcing from American companies. They do it because it is in their best interest economically to do so. As soon as it ceases becoming advantageous from a profit perspective, they will begin to stop. And that is good.
Getting back on topic, it strikes me short-sighted to believe that Volkl will not continue to increase the outsourcing of mfr. They do it now in some Eastern European countries and I expect it will continue to grow. Volkl is no longer a boutique brand and their overabundance of different types of mass-produced skis point to the fact that they don't want to return to that status (unlike Stockli, for instance). My personal opinion is that within 10 years, certain components or mfr will be done in China.
By the way, technology has gone from not being able to find enough people to many people not being able to find a job. It is not just about manufacturing or customer service jobs. If our system is not hampered too much it adjusts faster than any government could ever do....except during the great depression. It was government action and WWII that finally pulled us out. And you are right that when the economy shifts there are many individual workers who are left in the rubble. I hope that the "shifts" since 2001 do not precipitate larger forces, like the dollar plummeting and deflation, that are out of everyones control. The shift in jobs is manageable if America takes care of its' fiscal and monetary policies.
Time will tell. Globalization is not new but on the current scale and scope it is.
Anyway, I wish I were skiing today instead of talking macro economics.