
Ask HN: Economic Recession and Executive Salaries - pandamaniac
In respect to the current situation where the economy is starting to slow down and will only get worse, do you think that we have been living in an age of &#x27;luxury&#x27; where executives are paid exorbitant sums and the future sustainability of businesses are not thought about through the lens of survival but through that of profiteering?
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funkulation
Yes, I don't think that's even debatable.

The preservation of power right now is just egregious beyond comprehension.
The Fed & Washington, for the service of the banks & corporate America, are
going to add an immense amount of fragility to hold up an already fragile
system with all of the Fed actions so far + $6 trillion in spending.

Ultimately, I believe how Central Banks operate these days cannot be sustained
because to sustain them would defy the Laws of Thermodynamics. Their goal is
perpetual low vol, but thats obviously not how volatility works. Vol
suppression just leads to more explosions of volatility that are now having
dangerous implications in the real world.

The latest actions by Congress & the Fed, if they pull it off, I suspect will
lead to the next wave of volatility in violence, in a country with 400 million
guns. Even if they pull this off, they're exposing the US to just an immense
amount of pressure on the inflationary side. The political fallout of these
actions I suspect will be a true rise in authoritarianism because violence
will lead to chaos which leads to more violence, which leads to
authoritarianism to suppress violence. Hitler rose to power as a reactionary
force to the hyperinflationary failures of the Weimar Republic. The big
difference now is that the tools at the hands of the government have never
been more powerful.

This is not a moment where everyone is sacrificing, the managerial class of
America & the executive class can maintain their pay, while 30% of Americans
probably go unemployed, and every single small business in America has lost
everything. The idea of America, this idea that anyone can make it, is totally
lost in these circumstances. That is a far more powerful effect on society
than anyone even realizes right now. So while these executives don't make a
single sacrifice while so many do, I predict their lack of awareness to such
extreme selfishness will ultimately be their downfall.

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pandamaniac
This makes a lot of sense, not just for the American case but across the
world. How would you suggest that us (common citizens) push for change or
change our behavior to change this?

~~~
funkulation
Well, for one, I recently heard a podcast from a guy named Charles Marohn, he
runs this organization called Strong Towns, and wrote a book by the same
title. I haven't read it yet but I think he's onto something. His thesis is we
need to do a bottom up rebuild of America, not a top down one. It's all about
advocacy for a return to localism as a way to solve America's problems.

This is off their website:

The Strong Towns approach is a radically new way of thinking about the way we
build our world. We believe that in order to truly thrive, our cities and
towns must:

\- Stop valuing efficiency and start valuing resilience;

\- Stop betting our futures on huge, irreversible projects, and start taking
small, incremental steps and iterating based on what we learn;

\- Stop fearing change and start embracing a process of continuous adaptation;

\- Stop building our world based on abstract theories, and start building it
based on how our places actually work and what our neighbors actually need
today;

\- Stop obsessing about future growth and start obsessing about our current
finances.

Otherwise, as an individual, I think it's about maybe insulating yourself from
the impacts from what you can't control. I recently thought about growing my
own vegetables, building a home hydroponics system. Had me thinking too about
investing in solar power. I think the idea of teaching resilience is a better
way to go, because we clearly have a way too fragile system that is
susceptible to forces we can't control. As individuals it's up to us to build
communities of people at the more localized level to create the world we want.

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notlukesky
Shareholders are to blame for lack of oversight on executive compensation.

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sloaken
I only half agree with you. I think the real problem is the board votes for
people who are not in attendance. How many of you have been to a stock holders
meeting? Nor have I. Nor do I want to. I think rules need to be put into
place:

1) where if stock holders do not send in proxies, there shares are not
counted.

2) if you are on a board for a company. The other members and CEO cannot be
involved in any other company that you are a CEO or board member of. I feel it
has become too much of a 'I will give you a raise, if you give me a raise'

3) proxies to member cannot have open ended 'and other issues as they occur'
clauses. Typical proxy lists a bunch of things, but mostly 're elect xyzzy',
with a clause at the end allowing the board to vote your shares as they seem
fit. Like #1 above they do not need this.

Maybe they should have the shareholder meetings online so the people can vote.

You know for crazy salaries, do you ever see not public companies (privately
held) paying such ridiculous salaries?

