Economics, Political Theory, politics, US Politics

CEOcracy: A CEO’s marginal contribution to welfare.

Most people stopped believing that superstars simply earn their marginal contribution to welfare. Moreover, most people believe the fact that they do usually earn more than their marginal contribution is a consequence of a specific market setup, or, simply put – a kind of “market failure”.

However, John Snow, the US Treasury Secretary, when asked about the excesses of American CEOcracy, used “superstar economics” as a justification for widening gap in labour compensation (referring only to the US).

“What’s been happening in the United States for about 20 years is [a] long-term trend to differentiate compensation,” Mr. Snow said… “Look at the Harvard economics faculty, look at doctors over here at George Washington University…look at baseball players, look at football players. We’ve moved into a star system… Across virtually all professions, there have been growing gaps.”

Mr. Snow said the same phenomenon explains why compensation for corporate chief executive officers has climbed so sharply. “In an aggregate sense, it reflects the marginal productivity of CEOs. Do I trust the market for CEOs to work efficiently? Yes. Until we can find a better way to compensate CEOs, I’m going to trust the marketplace.” (source: WSJ)

Well, it is true that the marginal productivity of a CEO is not easy to measure, certainly not in financial terms (just as the one of the guy sweeping the floor, except in m2 per time unit) – but to argue that the market price is de facto a fair valuation thereof strikes me as a rather problematic position, given everything we know about markets and particularly in light of the next sentence in the WSJ’s article…

Since the 1970s, CEO compensation has gone from 40 times to more than 300 times the average worker’s salary.

That’s quite some executive productivity increase, don’t you think? (via Economist’s View)

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Iraq, US Politics, USA

I’m having a déjà vu.

reading the NYT’s report about the updated US national security strategy.

An updated version of the Bush administration’s national security strategy, the first since the invasion of Iraq in 2003, includes a vigorous defense of striking pre-emptively against countries seen to threaten the United States.
The document declares for the first time that diplomacy to halt Iran’s nuclear program “must succeed if confrontation is to be avoided.”

The Tehran government is given new prominence in the latest document, which declares that “we may face no greater challenge from a single country than from Iran.”

Administration officials cautioned that the reference to confrontation with Iran did not necessarily mean military attack, though both the United States and Israel have extensively examined what kind of surgical strikes could be aimed at Iranian facilities should diplomatic efforts fail to persuade Tehran to abandon its nuclear weapons program.

The warning to Iran also stands in stark contrast to the wording about North Korea, a nation that, as the strategy document notes, now boasts that it already possesses nuclear weapons. The North Korean regime “needs to change these policies, open up its political system and afford freedom to its people,” it says.

“In the interim, we will continue to take all necessary measures to protect our national and economic security against the adverse effects of their bad conduct.”

Missing, however, is the threat of any military action, perhaps because, in the words of a senior administration official, North Korea is “already considered a lost cause” that already has weapons, while Iran is still considered 5 to 10 years away from having them. “

Somehow, this makes me think of Bob Dylan… “…when will they ever learn, when will they ever learn.”

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US Politics

If they only were kidding…

Imagine you’re in charge of the department of agriculture in an country whose farming industry as well as dietary habits depend heavily on cattle farming and you have just discovered the third case of mad cow disease – what do you do?

It’s easy. You just look away and hope you’ll find something to help the consumers do the same. I’m just not sure it will work as well as it used to. It seems, Americans are slowly coming back to their senses.

Reuters AlertNet – US plans to scale down mad-cow testing

WASHINGTON, March 15 (Reuters) – The Agriculture Department is drawing plans to scale down its mad cow surveillance program that found two of the three U.S. cases of the disease, including one this week, two USDA officials said on Wednesday.

In addition, they said USDA would rely on private-sector incentives to inspire producers to join a separate cattle tracking system to track down suspect animals in future outbreaks of livestock diseases.

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US Politics

South Dakota

Will America ever be able to have a grown up discourse about abortion? It’s a serious and difficult issue involving a lot of complicated aspects, it is, just as the South Dakota representative interviewed by Time.com’s Nancy Gibbs states, a question of “balancing rights”. Quite right – but then again, why did he and his fellow lawmakers come up with a law that seems utterly inadequate to do just that, but very appropriate to make it to the newly staffed supreme court as quickly as possible…

I particularly like the part where the representative explains that an abortion is not an abortion as long as the women does not/cannot positively know she’s pregnant…

TIME.com Print Page: Nation — When Is an Abortion Not an Abortion?

I talked to Representative Roger Hunt, the main sponsor of HB 1215, about why the bill was written as it was. Why, for instance, did they reject the standard exception to protect the health of the mother? Because, he says, that phrase is far too stretchy. ‘If we were talking of pure, serious health concerns,’ that would be one thing, Hunt said. But ‘health’ can mean economic health, mental health. ‘It becomes an open barn door for anyone who wants an abortion. We might as well not have the legislation at all’.

But what about cases of rape and incest, where there is overwhelming public support for allowing abortion as an option? Here the lawmakers admit that they carved out a little gray area. Hunt notes that the bill forbids doctors from prescribing any drug or doing any procedure on a pregnant woman ‘with the specific intent’ of ending a pregnancy. It also protects the right of women to use ‘a contraceptive measure, drug or chemical, if it is administered prior to the time when a pregnancy could be determined through conventional medical testing…’

In other words, a woman presenting herself to an emergency room immediately after a rape, Hunt says, would be able to use emergency contraception; the trick is that she has to do within the first few days after the assault, before any test can determine whether she was pregnant in the first place. The lawmakers concluded that it’s OK for a rape victim to have an abortion, so long as she doesn’t know for certain that she’s doing it.

So why not have an exemption for all rape victims, including the ones who are too shattered to report an assault right away? Hunt calls it “a fine line that we’re walking, but some of this is just to show that we’re being fair and reasonable. In cases where we cannot determine if there’s an unborn child or not, we’re trying to be sympathetic to a woman who alleges she’s been raped.’ But the sympathy expires after about a week. ‘Very honestly,’ Hunt adds, ‘We don’t want to have a lot of abortion clinics questioning a woman and having the woman say ‘well, I was raped four months ago, I need an abortion.’ We’re trying to be sensitive to women who are legitimate rape victims—and not give abortion clinics a chance to commit fraud on system.’

‘It’s so hypocritical it just blows my mind,’ Planned Parenthood’s Looby counters. ‘They understand that this is a problem for the public, so they had to come up with a way to get around that and this is their attempt to do so.’ The majority of rape victims, she notes, are victims of date rape, and the majority of incest victims are quite young. ‘They don’t present themselves at a hospital or doctor’s office to ask for contraceptive measures to prevent pregnancy,’ she says. ‘So I think it’s very disingenuous of him to suggest this is an exception for rape and incest. It’s not.’

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US Politics

Cheney got a gun…

Now look at this, David Ignatius, writing in the Washington Post – a paper characterised by some as the upscale PR office of this American administration (just look at how the arrogance claim comes coupled with “the most righteous politians”) – invokes An Arrogance of Power to explain the Dick Cheney’s silence after the shooting accident.

There is a temptation that seeps into the souls of even the most righteous politicians and leads them to bend the rules, and eventually the truth, to suit the political needs of the moment. That arrogance of power is on display with the Bush administration.

The most vivid example is the long delay in informing the country that Vice President Cheney had accidentally shot a man last Saturday while hunting in Texas. For a White House that informs us about the smallest bumps and scrapes suffered by the president and vice president, the lag is inexplicable. But let us assume the obvious: It was an attempt to delay and perhaps suppress embarrassing news. We will never know whether the vice president’s office would have announced the incident at all if the host of the hunting party, Katharine Armstrong, hadn’t made her own decision Sunday morning to inform her local paper.

Clearly, from a PR standpoint this incident was handles in the worst possible way. But this is not some straw breaking a Cheney’s back, this is a Trent Lott moment. We’ll see soon enough.

Speaking of straws… this might be one (via Brad DeLong).

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US Politics

Shooting Intentionally.

Seriously, I’m starting to think that the US Vice President Cheney might have to step down because of the shooting accident… just look at the quote from Yahoo! News

WASHINGTON – Vice President
Dick Cheney apparently broke the No. 1 rule of hunting: be sure of what you’re shooting at. …
Hunting safety experts interviewed Monday agreed it would have been a good idea for Whittington to announce himself – something he apparently didn’t do, according to a witness. But they stressed that the shooter is responsible for knowing his surroundings and avoiding hitting other people.”

Posing as a tough guy while not being able to shoot straight is something I imagine doesn’t go down well with a significant part of the VP’s constituency… it would be a blow to the administration, of course, but it’s just the kind of thing that cannot happen to a White House already on the defense. Sure, the President has been a little less under fire lately, after all, he pledged to spend the equivalent of about 3 hours of Iraq-money on figuring out a way how reduce the American dependency on oil. But still, with the positioning for the next race already in full swing, this is just the kind of thing that a President cannot afford.

While Cheney stepping down over this would prove each and every prejudice about the irrationality of US public discourse right, you’d just have to admire the irony – he’s been an active part of an administration which, slowly even by their own account, has been busy shooting without knowing what they were shooting at for the last 4 years. And now that did not intend to do that for once he’s actually hitting someone – and, in a way, himself, of course.

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US Politics

Supposedly feeling bad.

Gentle readers, I know I’ve been neglecting this lovely little kind-of diary recently, so, first off, welcome to the 2006 edition of almost a diary. And just in case you were wondering what to avoid this year – here’s my advice: don’t go hunting with Dick Cheney.

Cheney Shoots Fellow Hunter in Texas Accident

“The vice president was concerned,” said Mary Matalin, a Cheney adviser who spoke with him yesterday morning. “He felt badly, obviously. On the other hand, he was not careless or incautious or violate any of the [rules]. He didn’t do anything he wasn’t supposed to do.”

PR people… He didn’t do anything he wasn’t supposed to? Quite frankly, I bet he wasn’t supposed to shoot the guy. But on the other hand, now we know that Mr Cheney can indeed feel bad about something… or do we?

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almost a diary, compulsory reading, music, photoblogging, US Politics

Dick Cheney’s a surfer!

Paul JohnsonDick Cheney is probably a much cooler guy than you thought he is. After a hard day’s work of conspiring with his freshly indicted former Chief of Staff Lewis “Scooter” Libby, the man still has time and energy for a jam session with the legendary surf music band “The Surfaris”. Well, one of the two bands using the name, each featuring one member of the original band’s cast (info from surfkraft.de)

Richard CheneyAlright, maybe it’s not really Cheney. It could also be Paul Johnson, a surf music veteran, who is, along with Dick Dale, one of the genre’s principal founders and pioneers. At least that’s what his introduction was on stage, and that is also what’s written in the biographical part of the band’s website. He is also credited with the first record to be tagged as “surf music” – Mr. Moto, back in 1962. I wonder if Motorola’s ad agency thought about this when they created their latest campaign… (“hello Moto?”)

I am God motto tshirtAs part of their current European tour, the Surfaris stopped in Wiesbaden yesterday. And someone else did too. Standing behind the guy pictured on the left I somehow couldn’t stop thinking about the song Eric Bazilian wrote for Joan Osborne – “What if God was one was of us?

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Iraq, oddly enough, US Politics

Recycled News.

So I’m checking my mail, browse quickly through a newsletter by n-tv, the German news-channel, and I’m suddenly two years younger.

Seriously, tonight I’m being told it’s news that George W. Bush allegedly told Palestinian PM Abbas that God told him to go nation-building in countries he did not even know about before.

Hmm, didn’t I write about this in June 2003? Strange, don’t you think?

Well, maybe not so much – The BBC is just doing such a good PR job for an upcoming documentary that the White House felt the need to once again deny these alligations, which appeared in Haaretz two years ago

Actually, I’m not quite sure why Bush has his spokesperson publicly deny this again. Acknowledging the debate is a lose-lose proposition from a PR standpoint. I mean, everyone who’s hoping he doesn’t literally talk to God about strategic decisions will not be deterred from believing that he actually does by a White House denial. On the other hand, those – currently rather unhappy – parts of his/the Republican constituency which would like it if their President spoke with God as literally as possible, might chose to believe…

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