Monday, October 24, 2011

More on Inequality

Entrepreneurs helped make this country great and raised our standard of living to what was once the highest in the world. They did everything from build the railroads to invent the iPhone. Most entrepreneurs became very wealthy as a result of their creativity, risk-taking, and pioneering efforts. They generally made positive contributions to society, and used much of their wealth to support worthy causes.

On the other hand, you have the obscenely high compensation paid to CEOs and other executives – millions of dollars in salary, bonuses, and stock options. I ask: “What did these guys do to deserve such remuneration?” Generally, these executives are nothing more than overpaid managers, and sometimes not very good ones. They lay off American workers, export jobs to China, and cheapen their product, then they get paid exorbitant bonuses for “making the tough decisions”. Even when they fail, they get severance packages that are very generous from boards of directors who are more concerned with taking care of their own than the good of the business.

A CEO with vision is worth a decent salary, but paying such large amounts is what has the Occupy Wall Street folks riled up. While I may not agree with Occupy Wall Street’s leftist bent, they do have a point about the excessive executive compensation. It makes us all angry when banks and financial institutions that had serious problems and required a federal bail-out to stay solvent pay their executives huge salaries and large bonuses. It’s a slap in the face to every American taxpayer.

Quite frankly, I’m not sure what you can do about it in a free society. Certainly limitations on salaries and bonuses should be placed on companies receiving bail-out money or federal loan guarantees. Perhaps laws can be passed that limit executive compensation according to a formula. While we don’t want to stifle free enterprise, executive compensation has gotten out of hand and something should be done in all fairness to the other 99%.

Saturday, October 22, 2011

More on the Occupy Wall Street Protests

After writing a recent post regarding the Occupy Wall Street protests, I read an article on-line by Brian McLaren, author, speaker, activist, and public theologian. A former college English teacher and pastor, he is an ecumenical global networker among innovative Christian leaders.

Below are some highlights from his article that I believe are worth considering. You and I may not join the protests in the streets, but we can make our wishes known to our representatives in Washington and the State House. That’s why I’ve posted portions of his article below – so you and I can do something constructive to help turn this country around. Most of all, pray for this country, which has been the hope of so many who came to our shores to escape oppression, to be able to worship freely, and to prosper materially. All of those are under threat. Below are excerpts from the article:

The substance: both the market-driven disease and its government-driven cures have further enriched and advantaged the most powerful economic elites (the 1 percent) at the expense of the rest of us. After the crisis and bailouts, the 1 percent has a larger share of the wealth and power than before, and the 99 percent have more unemployment, more debt, and more frustration.

Here are a few unsolicited suggestions.

1) Name what's wrong. I think the movement is right to diagnose the problem as the concentration of wealth and opportunity among powerful elites (including banking, corporate, media, military-industrial, educational, and political elites).

2) Protest what's wrong. Protesting isn't everything, but it is something, and it matters. Protest mobilizes frustration and anger. It seeks to tap reservoirs of potentially destructive emotional energies so they can be directed toward constructive ends.

3) Name the goals. Just as naming the problem matters, so naming the solutions matters. And that will probably make all the difference for the movement.

4) Pro-testify for solutions. Protesting is being against something worth being against. But that's not enough. We must also pro-testify for something worth being for. That's why urban occupiers and their sympathizers will need to pro-testify for a concrete list of proposals.

Friday, October 21, 2011

Inequality in Our Society

One of the complaints of the Occupy Wall Street demonstrators is the high level of inequality in the United States. European Communism tried to do away with inequality, but failed, except to give most of the population a substandard life. Meanwhile the elites (the nomenklatura in Russia) lived very well. Some inequality will always exist, but it shouldn’t be so large that you don’t really have a middle class any more.

In the United States, the disparity between the richest 1% of the population and not-so-rich rest of us has become too large to ignore. This widening gap has been caused by a number of factors, resulting in the rich getting richer and the poor getting poorer, and the middle class getting terribly squeezed economically. I believe the worst is yet to come. The factors causing this gap to widen are:

(1) High salaries of the elites. Business executives receive ridiculously high salaries, bonuses, and stock options. Even the incompetent ones receive a generous “golden parachute”, getting rewarded for poor performance.

(2) Sports figures also receive ridiculously high salaries, and still they want more as we see in the NBA walk-out.

(3) With the economy the way it is, the poor have even less opportunities for earning a living, so many are unemployed or underemployed. The poor are getting poorer.

(4) The middle class is getting economically squeezed by a number of factors:

(a) Many are unemployed or underemployed. As a result, some have lost their house, and some have had to declare bankruptcy, moving these families into the ranks of the poor.

(b) Even if they have a job, they haven’t received a raise in years, property taxes are going up, they have to pay more for health benefits, the cost of college has been increasing much faster than the rate of inflation, and other costs (such as transportation) are on the rise.

(c) The first wave of the Boomer generation is now retiring, but they are financially unprepared. Research has shown the Boomers haven’t saved as much for their retirement as they should have, and it will be especially tough for single women when they retire. I believe that the Boomers will swell the ranks of the poor or lower middle class when they retire, since many will be living mostly off social security.

For these reasons, I believe the inequality will get worse, even if the economy turns around. Some Boomers will find themselves working – if they can find a job – well into their 70s in order to keep their heads above water.

While some inequalities are inevitable for various reasons, the current and the future level of inequality is unacceptable. I’m not sure what the answer is, but something will have to be done. Pray that our leaders will have the wisdom to deal effectively with inequalities so that people don’t have to live in abject poverty, especially in their “golden years.”

Thursday, October 20, 2011

Wall Street Demonstrators

Sometimes I think that those out demonstrating against such things as “globalization” and “fracking” don’t have a clue about what they are protesting against. They latched on to some kind of cause, and they want to relive the glory days of the 1960s (even though they weren’t even born then). Back in the 1960s, we had real causes: a terrible war in Viet Nam and civil rights, to name the two main issues.

Now we have demonstrators in the Wall Street area, and the protests are spreading to other cities and countries. Do these people have a legitimate cause or are they hippie wannabes? What is their gripe anyway? As I understand it, they have several complaints:

(1) The greed of the financial system (banks, mortgage lenders) which caused the current economic recession.

(2) The inequality between the richest 1% of the population and everybody else.

(3) The leadership crisis in Washington resulting in no agreement as to how to fix the mess we’re in.

(4) Overall dissatisfaction with government and the capitalist economic system.

In all of these, I believe the protestors have legitimate cause to demonstrate their disappointment. These aren’t fictitious or trivial complaints, but they get to the heart of the breakdown of our government and economic system. Our type of government is the best in the world, but it isn’t working as intended because of politicians who put party, ideology, and special interests ahead of what is best for the country and their constituents. The capitalistic economic system is the best way to go (as opposed to communism or socialism), but greed and incompetence have caused our system to falter and fail.

The items listed above are very simplistic, but I believe they summarize well what is wrong with this country and why the demonstrators are out there calling attention to our plight. Demonstrations may get people’s attention, but we need to vote the politicians out and keep doing so until we get folks in power who actually work for us and our best interests. We also have to pressure Washington to have appropriate regulation, oversight, and auditing over the financial system since banks, left to their own devices, will mess things up every time.

Watch for a future post on inequality.

Saturday, October 8, 2011

The Passing of Steve Jobs

I was saddened to learn of the passing of Steve Jobs after a long battle with cancer. A few lessons from his life:

Failure isn’t the end, but an opportunity to start again smarter and wiser.

Use your God-given creativity and think big.

Look for opportunities where others see none, and run with it. Jobs saw what Xerox had developed at its Palo Alto Research Center (PARC) and immediately recognized its potential, while Xerox was clueless.

Death is the great equalizer: everybody will experience it. The question is, where will you find yourself when you wake up on the other side?

All the money in the world can’t save you from a terminal disease, but may prolong your life for a while.

Think about this: What if Steve’s unwed mother had aborted him rather than putting him up for adoption?

Geniuses (or those who think they are the smartest guy in the room) are difficult to work for, no matter how likeable they may appear (Gates, Jobs, Zuckerman).

Steve Jobs and Apple represent the best of American technological innovation, but where is most of the hardware made? China, of course. What about American jobs, Mr. Jobs?

Steve Jobs came up with many technological innovations and left a tremendous earthly legacy, but good works done in obedience to God have eternal value.

The world has lost an innovator in a league with (or above) Edison, Ford, Watson (of IBM), and Wilson (of Xerox). In addition his business instincts and organizational abilities were excellent. Steve Jobs will be missed. I thank you for what you have given to us and for what is still in the pipeline.