Charles M. Blow on the fall of democracies

Charles Blow is deeply worried about Trump’s presidency and what it will do to American democracy.  See “The Anti-Inauguration”, New York Times, 2017-01-05.

"Spend part of the day reading about the rise and fall of empires and how it always seems far-fetched and inconceivable until it actually happens. There are many books that address this topic, but if you want something shorter, try Andrew Sullivan’s 'Democracies End When They Are Too Democratic,' a counterintuitive meditation on how tyranny can spring from populism, or my colleague Paul Krugman’s 'How Republics End.’"

These two articles do take time to read, but if you care about a democracy for the many as opposed to a kleptocracy for the few you will be rewarded with some thoughts for protecting and enhancing democracy.

The kleptocracy of corporate boards

Many corporations fight vigorously against unions, claiming that they would ask too much in pay.

But executives and board members of these corporations never seem to recognize that they have a union that determines their own pay.  I just checked the executive pay of Radio Shack - over $11 million for seven current and former executives for 2011.  The board of ten grants each of its members $150,000 in stock each year.  Talk about the foxes guarding the chicken coop.

Oh, yes, Radio Shack's stock dropped by a half over the past year.  The above compensation is not pay for performance but kleptocracy - rule by thievery.

I single out Radio Shack because its proxy statement is the latest that I read.  Corporation after corporation rewards their top executives and board members quite well regardless of how well the corporation fared.

If corporations are sending work to lower wage countries, why not send CEO jobs to countries like Sweden, Norway, France, or Belgium?  CEOs in these countries average a third of less the total compensation of U.S. CEOs.  See "CEO Compensation: US and other countries", Ben Lorica, last updated Oct 2011.  Better yet, why not export the CEO jobs to India or China?  I haven't checked, but I bet CEO pay is a lot lower than in Europe.

But things are changing.  Citigroup shareholders voted no on the CEO's compensation.  The shareholders of three other companies did likewise.  As of today, a search of "Executive Pay" yields many articles about the ongoing revolt against CEO pay - from unions to church groups to large investors.

P.S. See "Director pay: how high can it go?", footnoted*, Michelle Leder, 2012-04-13.