Checks and balances

Some mechanism to keep society relatively livable for majority of population.

---

Capping executive pay

• “Should the US Copy Switzerland and Consider a ‘Maximum Wage’ Ratio?” (SlashDot; 2013.11.23) – http://news.slashdot.org/story/13/11/23/1657202/should-the-us-copy-switzerland-and-consider-a-maximum-wage-ratio
  • “John Sutter writes at CNN that as Swiss citizens vote on November 24 to consider capping executive pay at 12 times what the lowest-paid worker at a company makes in a referendum. Some say the idea of tethering top executive pay to some sort of concrete metric might stop American execs from floating further into the stratosphere. ‘Here in America, the land of unequal opportunity, the CEOs of top-500 companies make in a single day about what it takes an average “rank-and-file” worker a year to earn, according to the AFL-CIO, the federation of unions,’ writes Sutter. ‘Democracy starts to unravel if a few people become wildly, ethereally successful, while the rest of a country struggles.’ A $1 million salary worked for American CEOs from the 1930s to 1980s, says Lynn Stout. But CEO pay, including options realized that year, jumped about 875%, to $14.1 million, from 1978 to 2012, according to the Economic Policy Institute. ‘What we’ve got is basically an arms race,’ Stout says, ‘where the CEOs are competing on pay because they each want to have higher status than the others.’ Peter Drucker, the father of business management, famously said the CEO-to-worker salary ratio should not exceed 20:1, which is what existed in the United States in 1965. Beyond that, managers will see an increase in ‘resentment and falling morale,’ said Drucker. Stout has suggested that the IRS make CEO pay a non-deductible business expense when it’s higher than 100 times the minimum wage. ‘Limiting CEO pay to 100 times the minimum wage would still allow top execs to be millionaires,’ concludes Sutter. ‘And here’s the best part: If the fat cats wanted a pay increase, maybe the best way for them to get it would be to throw political weight behind a campaign to boost the minimum wage.'”
• “As Inequality Grows, Swiss To Vote On Curbing Executive Pay” by Eleanor Berdsley (NPR; 2013.11.22) – http://www.npr.org/blogs/parallels/2013/11/22/246678622/swiss-inequality-is-growing-would-curbing-exec-pay-matter | MP3 – http://pd.npr.org/anon.npr-mp3/npr/me/2013/11/20131122_me_09.mp3
  • The youth wing of the Social Democratic Party collected the 100,000 signatures necessary to turn the measure, known as the 1:12 initiative, into a national referendum.
  • … 25 years ago Swiss CEOs made six times more than the average worker; today, they earn more than 40 times as much. … in a country of 8 million, 400,000 workers don’t make enough to live on.
  • Anger at high corporate executive pay is flaring up elsewhere in Europe
  • http://1a12.ch/
• “U.S. should copy Switzerland and consider a ‘maximum wage’ ratio, too” by John D. Sutter (CNN; 2013.11.21) – http://www.cnn.com/2013/11/21/opinion/sutter-swiss-executive-pay/
  • Here in America, the land of unequal opportunity, the CEOs of top-500 companies make in a single day about what it takes an average “rank-and-file” worker a year to earn, according to the AFL-CIO, the federation of unions. Switzerland has an average CEO-to-worker compensation ratio of 148 to 1, the group says. The average U.S. rate is 354 to 1, according to the AFL-CIO. Others put the ratio somewhat lower, around 273 to 1 in 2012.
  • Either way, it’s bad. And some U.S. companies are worse, still. JC Penney Co. has the highest ratio — 1,795:1 — on a list of 250 businesses compiled by Bloomberg. That department store’s CEO got $53.3 million in pay and benefits in 2012, Bloomberg says. Workers, by comparison, earned only about $30,000 a year.
• “Blame Rich, Overeducated Elites as Our Society Frays” by peter Turchin (Bloomberg; 2013.11.20) – http://www.bloomberg.com/news/2013-11-20/blame-rich-overeducated-elites-as-our-society-frays.html
• “Value In Sharing The Ratio Of CEO’s Pay To Employees’?” (NPR; 2013.10.26) – http://www.npr.org/2013/10/26/241030961/value-in-sharing-the-ratio-of-ceos-pay-to-employees | MP3 – http://pd.npr.org/anon.npr-mp3/npr/atc/2013/10/20131026_atc_03.mp3
• “What are the annual earnings for a full-time minimum wage worker?” (Center for Poverty Research) – http://poverty.ucdavis.edu/faq/what-are-annual-earnings-full-time-minimum-wage-worker
  • The current federal minimum wage is $7.25 per hour. If a minimum wage worker is employed full-time (forty hours per week for 52 weeks), that worker would earn $15,080 annually.
    In 2012, the poverty threshold for a single individual was $11,945 and the poverty threshold for a family of 4 with two children under 18 was $22,283.
    Thus, a single full-time minimum wage worker has an income above the poverty threshold but if a full-time minimum wage worker is the sole source of income in a family of four, that family’s income is only 65% of the amount required to meet its basic needs.
• “Turning Up the Heat on CEO Pay” (The Drucker Institute; 2011.02.17) – http://thedx.druckerinstitute.com/2011/02/turning-up-the-heat-on-ceo-pay/
• “Return of the oppressed” by Peter Turchin (Aeon Magazine) – http://www.aeonmagazine.com/living-together/peter-turchin-wealth-poverty/
  • From the Roman Empire to our own Gilded Age, inequality moves in cycles. The future looks like a rough ride

---

Term limits

Wasted generations

• “The disposable academic” – Why doing a PhD is often a waste of time (The Economist; 2010.12.16) – http://www.economist.com/node/17723223

---

See also: Education – https://eikonal.wordpress.com/2010/10/26/education/

Scarcity and Abundance

• Mike Masnick’s series (of posts at TechDirt) about the lack of scarcity and its impact on modern economic climate:
  • Economics Of Abundance Getting Some Well Deserved Attention (2006.10.26) – http://www.techdirt.com/articles/20061026/102329.shtml
  • The Importance Of Zero In Destroying The Scarcity Myth Of Economics (2006.11.08) – http://www.techdirt.com/articles/20061025/014811.shtml
  • The Economics Of Abundance Is Not A Moral Issue (2006.11.15) – http://www.techdirt.com/articles/20061115/020157.shtml
  • A Lack Of Scarcity Has (Almost) Nothing To Do With Piracy (2006.11.29) – http://www.techdirt.com/articles/20061129/010043.shtml
  • A Lack Of Scarcity Feeds The Long Tail By Increasing The Pie (2006.12.06) – http://www.techdirt.com/articles/20061206/011155.shtml
  • Why The Lack Of Scarcity In Economics Is Getting More Important Now (2006.12.14) – http://www.techdirt.com/articles/20061213/234018.shtml
  • History Repeats Itself: How The RIAA Is Like 17th Century French Button-Makers (2007.01.11) – http://www.techdirt.com/articles/20070110/004225.shtml
  • Infinity Is Your Friend In Economics (2007.01.18) – http://www.techdirt.com/articles/20070118/013310.shtml
  • Step One To Embracing A Lack Of Scarcity: Recognize What Market You’re Really In (2007.01.25) – http://www.techdirt.com/articles/20070125/004949.shtml
  • Why I Hope The RIAA Succeeds (2007.02.01) – http://www.techdirt.com/articles/20070201/004218.shtml
  • Saying You Can’t Compete With Free Is Saying You Can’t Compete Period (2007.02.15) – http://www.techdirt.com/articles/20070215/002923.shtml
  • Perhaps It’s Not The Entertainment Industry’s Business Model That’s Outdated (2007.02.22) – http://www.techdirt.com/articles/20070222/002451.shtml
  • An Economic Explanation For Why DRM Cannot Open Up New Business Model Opportunities (2007.03.01) – http://www.techdirt.com/article.php?sid=20070301/005837
  • Recognizing That Just About Any Product Is A Bundle Of Scarce And Non-Scarce Goods (2007.03.15) – http://www.techdirt.com/articles/20070315/013313.shtml
  • Scarcity Isn’t As Scarce As You Might Think (2007.05.22) – http://www.techdirt.com/articles/20070322/024237.shtml
  • The Grand Unified Theory On The Economics Of Free (2007.05.03) – http://www.techdirt.com/articles/20070503/012939.shtml
• “Chris Anderson Strikes Again: The Economy of Abundance” by David Hornik (2006.10.22) – http://web.archive.org/web/20071224090639rn_1/ventureblog.com/articles/2006/10/chris_anderson_1.php
• “Abundance, and Five Years of Blogging” by ross mayfiled (2006.10.24) – http://ross.typepad.com/blog/2006/10/abundance_and_f.html
• “The Economics of Abundance” (2006.10.25) – http://www.longtail.com/the_long_tail/2006/10/the_economics_o.html
• Lack of Scarcity? – http://radio-weblogs.com/0114726/2002/12/20.html#a146. Extract:
  The Internet in totality has three significant emergent properties:
  • 1. Low transaction costs: this accelerates Says Law
  • 2. Inherent optionality: The Net is the most option rich medium, primarily because of its openness (free options create more free options). Every layer in the OSI networking model creates options for use by the above layers. As David Reed says in That Sneaky Exponential, “The value of potential connectivity is the value of the set of optional transactions that are afforded by the system or network.” When assets have economies of scope properties (high optionality) in a low transaction cost environment it further accelerates Says Law.
  • 3. Commoditization: All goods trend towards commoditization. On the Net, the scale and span of the network and diversity of interests allow otherwise fragmented markets to be pooled, further accelerating the process of commoditization. All commodities prices also trend toward zero, as markets become more efficient in how they commonly define goods and contracts as well as develop mechanisms to transact them.
  • 4. Rapid Obsolecense: The openness of the Net fosters innovation. That, combined with the above, results in shorter lifecyles and rapid depreciation.

• “Norlin on the Internet as Economic Drain” (2002.12.20) – http://web.archive.org/web/20070418112735/http://www.hyperorg.com/blogger/mtarchive/000979.html

Retirement

Financial calculators online

• ING’s magic number: http://www.ingyournumber.com/
• Morningstar’s IRA Calculator: http://screen.morningstar.com/IRA/IRACalculator.html
• What you need to save (CNN Money.com) – http://cgi.money.cnn.com/tools/saveyoung/index.html
• Can you retire early? (CNN Money.com) – http://cgi.money.cnn.com/tools/retireyoung/index.html

Articles

• Retirement checklist: What to do from 35 to 55+ – http://money.cnn.com/2010/09/21/retirement/retirement_checklist.moneymag/index.htm. Here is the list of bullets this article covers (for details, go read the article itself):

  • Mid-30s to early 40s:
    • How much you should have in your retirement savings: 1.5 times your annual salary.
    • Goal: Develop the habit of saving.
    • Savings: 1.5 times your annual salary by age 35.
    • Take full advantage of my 401(k) match.
    • Boost my 401(k) contribution.
    • Find other tax-advantaged ways to save.
    • Cover six months of expenses.
    • Invest for growth.
  • Mid-40s to early 50s:
    • How much you should have in your retirement savings: 3 times your annual salary.
    • Main goal: Focus on how you invest your money.
    • Savings: 3 times annual salary by age 45
    • Rebalance my portfolio.
    • Go over my investment strategy.
    • Make my catch-up contributions.
    • Give myself a reality check.
    • Consolidate my far-flung retirement accounts.
  • Mid-40s to early 50s:
    • How much you should have in your retirement savings: 6 times your annual salary.
    • Main goal: Decide what type of retirement you want.
    • Savings: 6 times your annual salary by age 55.
    • Prune my stock portfolio.
    • Map out a blueprint for my retirement.
    • Run (and rerun) my income plan.
    • Look into when to take Social Security.
    • Work on my Plan B.

Dawning of the age … of the disposable workers

The Consumerist has a short article (http://consumerist.com/2010/01/welcome-to-the-permanent-temporary-workforce.html) on this new economic world order where no-one can retain even the illusion of having stable/permanent job.

The Consumerist’s article reflects upon longer article “The Disposable Worker” from the BusinessWeek (http://www.businessweek.com/print/magazine/content/10_03/b4163032935448.htm).