The Rise of Corporate Dominance and the Rise of Income Inequality (Part III)
22 August 2017 | Pago Pago, American Samoa
V. CEOs stole labors’ productivity gains beginning in 1973
Since then CEOs have progressively increased their salaries as those gains have grown over the years. Most people don't realize this or refuse to believe it but the evidence is abundant. How, they ask could such a thing happen.? First some background evidence.
It is well understood that marginal productivity pricing for workers has collapsed. Joseph Stiglitz and others have commented on that. Joseph Stiglitz explains that is very clear from the escalation of CEO salaries and the stagnation of line workers pay in real terms. Stiglitz agrees with me worker's' pay has been misappropriated.
My contention is that by CEO's unchecked fiat power and the de facto control of the corporate revenue stream by CEOs, beginning in 1973, CEO’s have taken, stolen, misappropriated laborer’s productivity gains since then and used them to increase CEO compensation since then. It has happen gradually as the chart below shows. Workers real wages have stalled out and CEO compensation has gone through the roof. See the chart below.
To be sure, some misappropriated funds may have gone to other management and some other uses, but the CEO’s got the bulk of it. Fascist dictators always take care of themselves well and the money has to come from somewhere.
VI. CEOs have monopolized much of the American economy
Corporations do what their CEOs tell them to do. And they have gotten their marching orders to monopolize, big time. Monopoly is a serious driver of inequality, as profits concentrate more wealth in the hands of the few, especially CEOs The effects of monopoly enrage voters in their day-to-day lives, as they face the sky-high prices set by drug-company cartels and the abuses of cable providers, health insurers, and airlines. Monopoly provides much of the funds the wealthy use to distort American politics.
The idea that America has a monopoly problem is now beyond dispute. Since 2008 there have been more than $10 trillion in mergers, and the pace of deal-making continues to accelerate, with 2015 setting a record for the most mergers in a year and October 2016 setting the record for the most mergers in a month. Mergers are a way of eliminating competition.
The Economist magazine published three cover stories on America’s monopoly problem recently. The magazine reported that two-thirds of all corporate sectors have become more concentrated since the 1990s, that corporations are far more profitable now than at any time since the 1920s, and that an inordinate amount of profit is being earned, much more than usual from monopolized sectors.
In April, the White House Council of Economic Advisers came to much the same conclusion, and called for a “robust reaction to market power abuses.”
Politicians have ignored the problem; however. The republicans in power are happy to have it continue because it serves the interests of their patrons who want nothing done about it. CEOs are enchanted.
(to be continued)