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Good read on CEO pay and stakeholder governance

Deacon923 said:
Fruit cup. For extra credit, why is that an important distinction?

[Caveat: we don't actually know the numbers underlying the chart tj posted, but I think Tuffalo has made a reasonable guess]
Click to expand...

To me, what's incredibly surprising about tj's graph is that since about 1973, in spite of the greatly larger number of older people and the dramatically larger costs in medical expenses, spending has gone up only about 4% of GDP.
 
Deacon923 said:
Fruit cup. For extra credit, why is that an important distinction?

[Caveat: we don't actually know the numbers underlying the chart tj posted, but I think Tuffalo has made a reasonable guess]
Click to expand...

Tjcmd's chart is from a Josh Barro piece at Forbes. Barro is very good so I trust it.

Transfers don't (directly) contribute to GDP which is why FRED only has BEA numbers on government consumption and gross investment. Also why BEA is tracking that and not gross federal spending.

I should add that any governmental intermediate goods or services are also not included in my series. They're very small though, especially relative to transfers
 
TuffaloDeac10 said:
Tjcmd's chart is from a Josh Barro piece at Forbes. Barro is very good so I trust it.

Transfers don't (directly) contribute to GDP which is why FRED only has BEA numbers on government consumption and gross investment. Also why BEA is tracking that and not gross federal spending.

I should add that any governmental intermediate goods or services are also not included in my series. They're very small though, especially relative to transfers
Click to expand...

Precisely. It seems to me that including transfers in a comparison to GDP series is somewhat misleading. The expenditures themselves do not contribute to the GDP number used in the denominator of the division problem, so it actually amplifies the graph and makes government spending look larger artificially.

That aside, what is seen in these two graphs is a marked decline in government investment and employment over time. That's why our infrastructure is decaying, our internet grid is a decade behind the rest of the civilized world, our air traffic control system is antiquated, and there aren't enough qualified government workers to do the work demanded of them by the economy. On the other hand, there is a marked increase in transfers, mainly Medicare, Medicaid, and Social Security, and interest costs on borrowing.

Thus whether you think government is "too big" is pretty much a referendum on how you feel about entitlements. It's not a discussion about whether government is more involved in the economy, owns more assets or provides more services, "crowds out" private investment, or employs too many bureaucrats, because by any objective measure those types of government activity have shrunk dramatically over the past 30 years.
 
One of the greatest human inventions is the (relatively) free transfer of capital. One great example of this are stock markets. Publicly trading shares of a company allows private owners to "cash out" and conversely allows holders of capital to participate in the growth of an idea/concept/product/company which is not their own. Everybody wins.

More regulation of what publicly traded companies can do (i.e. limiting CEO pay) will lead to less publicly traded companies. This will lead to less people having the opportunity to gain by deploying their capital.

Want to get ahead? Invest in equity in some way (direct share ownership, mutual funds, ETFs, etc) instead of whining about those that have.

As always, caveat emptor.
 
 
And Jamie would much prefer the conversation be about his salary instead of the impressive amounts of equity compensation paid to him, the management team, and the board. In 2018, JP Morgan repurchased 181.5 million shares of company stock and then re-issued 32 million shares to management. At the time those shares were issued, they were worth $3.5bn. Dimon holds more than 7.8mm shares of stock. There are 12 other JPM senior executives who are worth more than $100mm thanks to their stock holdings. Managers enriching themselves at the expense of shareholders. Great fiduciary work by the board and its Chair.
 
Former CEO of Goldman Sachs:

 
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