The bailout was great for the biggest banks. But it also did wonders for the salaries of the CEO’s of America’s largest companies, which were up by 40% last year.
In the name of helping the little guy, the government and the Federal Reserve make the very rich even richer.
Fiat money and tax money protect the rich from failure. Then they skin the shareholders for the privilege of investing in the company’s shares.
The Standard & Poor’s 500 stock index peaked at 1527 in March of 2000. Today, it’s lower. So is the purchasing power of the U.S. dollar — by over 30%. You can verify this here: http://bit.ly/BLScalc.
Bill Bonner explains what has happened. He writes: “Here’s the latest on what the insiders are up to, from the Guardian:
Revealed: huge increase in executive pay for America’s top bosses
Exclusive survey shows America’s CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145mChief executive pay has roared back after two years of stagnation and decline. America’s top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.
America’s highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses’ profits on stock options rose 70% in 2010, from $950,400 to $1.3m.
These people did very well by retiring. Your retirement program isn’t like this:
2010 was a great year to lose your job as a CEO. Four of the 10 highest paid CEOs were retired or departing executives. Ronald Williams, former head of Aetna, a health insurer, exercised 2.4m options for a profit of $50.4m. Aetna’s stock price declined by 70% from when Williams assumed the role of CEO in February 2006 until his retirement. At pharmacy chain CVS, Thomas Ryan made a $28m profit on his options. During Ryan’s 13-year tenure as CEO, CVS Caremark’s stock price decreased almost 54%.
Omnicare’s Joel Gemunder retired last August and received cash severance of $16m, part of a final-year pay package worth $98.28m.
This is why voters are steadily losing faith in the government-rigged capitalist system, which is no longer a free market system.
For his part, the working stiff is less concerned with what it means to the economy and more concerned with what it means to him:
“Like a lot of Americans, I’m pretty ticked off,” said an Occupy Wall Street protestor. “It’s not that there are rich people. It’s that the people with a lot of money over the past few decades have rigged the system so that there’s not a fair chance to anyone anymore.”
He’s right. The system is rigged. Probably not the way he thinks. But rigged nonetheless.
The feds rigged it. They turned America’s leading business sectors into zombie-controlled, value-destroying industries. They turned the nation’s money into an ersatz currency. And they pushed the country’s middle class households in debt holes they find it difficult to climb out of….
Here is what bothers Bonner. It bothers me, too.
And then, when the whole degenerate system was ready to come crashing down…they bailed out the debt-mongers…and propped up the whole corrupt system with $29 trillion in money that didn’t belong to them.
A merry little depression would have been so much better.
Before it’s all over, we will get a not-so-merry depression, or else hyperinflation. The Federal Reserve will decide which.
