Here's the part that intrigues me:
For example, the chief executives of 11 of the largest companies were awarded a total of $865 million in pay in the last two years, even as they presided over a total loss of $640 billion in shareholder value, a recent study from governance firm the Corporate Library, found.So. The big boys were doing even better under a Democratic administration. They've lost money because shareholder value has plummeted.
In 1965, U.S. CEOs at major companies earned 24 times a worker's pay. That ratio surged in the 1990s and hit 300 at the end of the recovery in 2000, according to EPI.
And yet they insist on the infallibility of Bushnomics.
Here's my proposal: Let us institute not just a higher minimum wage, but a maximum wage for CEOs. The top limit could be breached only when shareholder value increases -- in other words, only when CEOs do their damned jobs and help the overall economy.
A related point: I've raised this meme before, only to be shot down by readers. Why have Hollywood blockbusters under-performed expectations domestically? Do we blame the films, do we blame downloading, or do we blame higher housing prices and thinner wallets?
Cars opened extremely well, but made less money than observers expected. Batman Begins is a good film that found an audience, but still made less than expected. King Kong did well, but was judged a disappointment relative to expectations and cost. Da Vinci Code is considered a flop, even though it will make a profit on overseas sales and DVDs.
I predict that we will hear similar words about the new Superman film (which has garnered strong early reviews): Great boxoffice -- but not as great as predicted.
In each case, people will trot out the same tired old blame-the-movie scenarios. Yes, yes, I can hear you now: It's all sequels and remakes... Puh-leeze resist the temptation to parrot the predictable, and please understand that no evidence suggests that huge audiences flock to films with novel premises. Don't romanticize Hollywood history: Movies were not better when you were young or when your parents were young. Fifteen years ago people routinely said that the industry stopped making good movies fifteen years before that.
Face it: A shrinking number of people have entertainment budgets, a harsh economic fact which has lowered the limit to how much a movie -- any movie -- can make domestically. A person who paid $500 bucks a month in rent in 2000 now pays well over a grand, and gas has more than doubled. Wages have not kept up. Consumers must cut back somewhere. Hollywood now thrives on imported dollars -- or rather, euros and yen.
At least Californians (unlike the denizens of most other states) still know how to make a product that people in other countries want. Too bad fewer people in this country can afford it.
10 comments:
I'll be speaking as a starving actor/writer in LA.
Count me in the "people ain't got the funds" group. Movies are just like CDs or books: you're not going to like every one that's released. In fact, of every ten major albums released on a Tuesday, you're probably not going to be interested in (let alone enjoy) 8 of them. Basic bell-curve math, only 2-3 will be above average. And it's not like the 70's didn't produce its share of crap.
As long as the gap between rich and poor keeps widening, the poor will have less money to shell out for increasing ticket prices. Thus, like my neighbor who just had his second child, many will turn to bootleg DVDs. (They just watched "Cars" last night, given to them by a friend for free.) There's your vicious cycle.
I don't think that's the entire problem, I think a small percentage of it is a problem with content and originality, and that is also a direct result of studio bigwigs (read: CEOs) not having the guts or freedom to remove themselves from tried and true formulas. Witness: "An Inconvenient Truth," which had ZERO chance of being produced through the studio system, is outdrawing every single film per location. In its second week, it was #9 in box office revenue , while appearing on 77 screens nationwide. The #8 film was screening on 1200+, and 1-7 were on 2000-4000 screens. Not only is it a DOCUMENTARY about a DEPRESSING SUBJECT, but it stars AL GORE. Can you imagine the pitch meeting? Yet, people seem to have a hunger for (gasp) honesty.
Seems to me at some point, studio heads might get a clue and be willing to take chances on unique voices. But the pressure to please the shareholders (like in most other American industries today) means that profit is much more important than progress.
Perhaps the auto industry, for example, would be reaping the benefits today if they had VOLUNTARILY increased gas mileage standards or invested in innovative and creative alternatives like hybrids.
But profit trumps progress in today's capitalism. Unfortunately, that profit goes directly into the pockets of the management which has royally scr--ed up their respective industries. The box office slumps when the auto worker is laid off and can't afford to bring his family to the theatre.
....BUT GO SEE PIRATES 2!!
as per the first point, you're absolutely correct. there are not enough controls on the 'free' market. there's a terrific article in the latest harper's on how walmart epitomizes all that's wrong with our economy. the opening paragraphs reference how not even smith would have endorsed the kind of market we have here, where - without regulations of any kind - is anti-trust run amuck. the greedy fully recognize that this is what happens without anti-trust laws; the rich, greedy, and aggressive eventually get it all.
as for your suggestion that we put a maximum on ceo salaries, ABSOLUTELY! is it not the most bizarre insanity that these people who refuse to consider any limits on their activities at all (upper limits on income is just one of them), while they also refuse to consider lower limits on payment to their slaves. so moral, so christian.
another thought on that count; one of the reasons i had so much admiration for ben and jerry's was that their original business was expressly structured so that they as owners would never make more than (i think it was...) 8 times what their lowest paid worker got paid.
now think about this plan, because it's just so cool on so many levels, the main one being that it provides so much incentive from everyone. when you're a janitor making less than minimum because you're only part-time, what do you care if you don't give it your best. compare that to working where you'll always make a really sizable chunk compared to your bosses. so the more they feel comfortable paying themselves from all your efforts and everyone else's, the more everyone makes. pure genius. as generous.
of course, when the company got so big they had to start operating like a big company to keep up with the demand, they hired an outsider who demanded a big salary. it all went to hell from there, with an eventual sellout that they quickly despised.
as for the movies, i agree. my sense is that films have gotten so much better. at least the really good ones have gotten better. i can't even keep up. and yeah, i do have to say, it's the cost. that, and the fact that i actually prefer watching most films at home where i can stop it to make popcorn or go to the john. it's only those films where the big screen make all the difference that pull me into the theatres. and even then, i always make a point to do the matinee.
cheap date, definitely.
Succintly, for me, it's the money.
Miss P
Well --
I haven't been by in a long time - just takes too long to load this site on my computer - but I stopped by to see if you had any comment on the story of a supposed plot on Chicago's Sears Tower.
Can't speak intelligently on the movie thing - haven't been inside a theater in about 10 yrs, don't buy CDs or DVDs, haven't rented anything from Blockbuster in at least 4 years. I don't have the money -- but even if I did, I wouldn't waste it on that.
From an article entitled
BIG SURPRISES AT BILDERBERG in TheAmericanFreePress.net:
"Timothy Geithner, president of the Federal Reserve Bank of New York, predicted rising interest rates and difficulties for families that have obtained adjustable rate mortgages, or “variable” interest rates. Many are likely to lose their homes as rising home mortgage rates add hundreds of dollars to their monthly payments, he said."
It's worse than you say.
The top 25 hedge fund managers averaged $251 million income in 2004. That's five million a week. A million dollars a day.
Two of them made over a BILLION that year.
And they are parasites. Their companies don't even make things. They are parasites.
Ok, so, then, it seems to me that if we tax the rich appropriately (%) and stop coddling to their threat/whine that, "I'll leave the country as an employer if you do," that we'd be far better off. I'm sure that threat used to sound scary. But just think of that for a moment. I mean, just think! Many birds one stone. Ahhhh. The relief!
Edwards in 2008 - the guy has a vision.
Miss P.
...and it's gotten even worse:
For 2005, the top 25 hedge fund managers averaged $361 million in personal income.
Apparently five million dollars a week wasn't enough. Now it's up to SEVEN MILLION a week.
The Eisenhower years -- hardly a socialist era -- had marginal tax rates close to 90%, and it didn't stop innovation or kill the work ethic. "We" lowered that 90% to 28% under Ronald Reagan, because Ronnie claimed he wasn't sufficiently motivated to work in Hollywood when he had to pay so much tax (would that he hadn't worked at all!).
But those high rates didn't seem to stop anyone else, and we saw during this period a rise in the living standard of ordinary people unprecedented in human history.... Obviously, this would be one solution to $500 million pay packages.
Conversely, from Ronald Reagan to the present, wages are largely stagnant for the middle-class (and lower for the poor), but astronomically higher for the top 1%. Now that's progress.
As for the movies: yeah, cost is one factor. But there are others:
-- the "experience" (ads, food odors, obnoxious previews, insufficiently socialized audiences, etc.) is offensive to many adults.
-- there are fewer films conceived for adults (once upon a time, everything from The Godfather" to "Raging Bull were "studio" movies. No longer).
-- there is far more competition for that "entertainment dollar", than ever before, including home theater, internet, and the hours people seem to devote to staring at their cell phones.
Hedge fund managers? That's who you decide to pick on unirealist? They cater their services to the wealthy (one needs to be a "qualified" investor to become a client), they get paid only if they perform (most are paid on a 1/20 scale - meaning 1% of assets under management and 20% of the profits), and the top 25 that you've referenced have generated fantastic investment returns for their clients over time. And parasites of what exactly?
Now, I'm sure many of you who have read my posts will be surprised that I agree with the paragraph that "intrigues" Joseph - if CEOs aren't performing, they don't deserve to get paid. But hedge fund managers exemplfy a pay-for-performance system - moreso than most occupations imaginable.
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