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Why do the FAT CATS keep getting fatter?


One of the subjects that we have briefly touched on during our time in class is CEO compensation and income inequality. We read a brief by AG Lafley who argued that it is time for CEOs to take a stand. He acknowledges in the article that “amounts and forms” of CEO pay are “unacceptable and inappropriate.” He believes that failure to take action will ultimately result in governmental action. Lafley offers several suggestions. His four main points are “reward with equity, restore integrity to equity grants, eliminate post-employment provisions not pegged to performance, and implement more-detailed analyses.” Essentially, Lafley wants to increase CEO incentives to perform well, maintain CEO equity in the firm, remove forms of pay like automatic stock options, and value executive compensation appropriately, including all forms.

I was intrigued by this subject and wanted to research it more because it stands in stark contrast to what I am planning to write about for my final white paper. My first argument draft focused on poverty in America and its impact on children and minorities. I plan to combine this dialogue with a focus on the working poor as well. Eventually, I want to recommend suggestions to federal legislators to assist those who need the most help. Providing information in my paper about the wealthiest Americans would portray the alarming shift of wealth in our country by giving examples of those who are benefitting most.

I conducted some initial research through Google and discovered a Businessweek article which stated that in the 1980s, the CEO of a major corporation made 42 times the average hourly worker in the company. This number has skyrocketed to a remarkable 531 times the average hourly worker in recent years. Many questions have been raised about whether executive compensation is truly connected to the financial performance of their company.  Recent social movements like Occupy Wall Street have shown that the general sentiment is that it is highly unlikely that all or most of the growth of a company is due to just one person. No reputable studies have connected high levels of CEO compensation to company performance. Nevertheless, it continues to increase the gap between CEOs and those front line employees who are heavily relied on to deliver growth. It is predicted that the current pattern will result in less employee motivation.

I conducted a cited reference search and came across an article titled “Exorbitant CEO compensation: just reward or grand theft?” which was written by David O. Friedrichs in October 2008. This article thoroughly discusses CEO compensation and provides a significant volume of data to back up its claims. It makes the  argument that exorbitant CEO compensation should be considered a white collar criminal offense. It even goes so far as to evaluate what changes would be needed legally to criminalize excessive pay. While this article may represent an extreme side of the debate, it provides a good starting point for me as I begin to brainstorm federal legislative changes which need to be made in order to decrease the gap between executives and those who fall below the poverty line.

Come Join Me at Downton Abbey


This week I have decided to stray from my normal political banter to share one of my current favorite shows. Downton Abbey is a television series which is produced both by Carnival Films of the UK and WGBH Boston, Massachusetts. The setting of the program revolves around a fictional estate named Downton Abbey which is located in the North Riding of Yorkshire. It was created and largely written by actor and writer Julian Fellowes. Downton Abbey is currently in production of its third season and premiered in the United States on PBS on January 9, 2011.

The series begins during the Edwardian Era in England and the year 1912. The main focus of Downton Abbey is a vivid portrayal of the lives, romances, scandals, and secrets of the aristocratic Crawley family and their staff which keeps the estate running every day. The audience is captivated by a detailed sequence of happiness and heartbreak with each of the characters in the story.

Downton is the home of the Crawleys, who have been the Earls of Grantham since 1772. The scenic estate is emphasized throughout the home in elaborate in the family drawing rooms, libraries, and bedrooms, all of which look over the vast landscape. The servant staff also lives on the property in their own quarters. Regardless of whether a character is a Crawley or a servant, there are rigid social hierarchies that all are impacted by.

There is a range of motivations and dreams amongst the servant staff at Downton. Some are extremely loyal to the Crawleys and view working at Downton as a way of life. Others, looking to climb up the social ladder, view Downton as a stepping stone to bigger and better things. Nevertheless, everyone enjoys the adventures inherent with working at Downton and is aware of privileged information within the family.

The plot thickens and social norms are challenged when members of the Crawley family and their servant staff are called to serve during World War I. Their lives become even more intertwined and many are concerned that life as they know it will be changed forever.

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All Magic Comes At A Price


So we all have our favorite fairy tale stories that our parents used to tell us before bedtime. Snow White, Sleeping Beauty, Cinderella, Little Red Riding Hood, Hansel and Gretel… the list goes on and on. But, what we were living in an a world that was remnant of a parallel one? That is the basis of ABC’s new show Once Upon A TimeContinue reading

Enron, “Asshole,” and Research Process


“You appreciate it?” was Richard Grubman’s response to Jeff Skilling dodging his persistent questions about the financial health of Enron on April 17, 2001.

Next, Skilling called him an “asshole” on a conference call with investment managers and analysts. I had heard about this infamous and perhaps symptomatic of the problems with Enron moment for years.  I decided to see if I could actually hear it.

  1. First, I’ll say something about that the conversation.
  2. Then, I’ll discuss research process. Continue reading

A Revolution in our Midst


With the economy in a recession and society’s trust in business at a low, Fuse Corps is a revolutionary venture that hopes to help solve these problems. In the blog Spring Wise, a blog post titled “Entrepreneurs matched with government leaders on grassroots projects” explains briefly the point and plan behind Fuse Corps. Fuse Corps is a one year program that hires 10 to 20 entrepreneurs who have high energy, at least eight years of experience, and great leadership skills to work side by side with mayors, governors, or social entrepreneurs. Starting this upcoming March, those selected with attend a two week leadership program and then be divided into working in either a “cabinet-level” position or with community-based organizations. They will be paid either based on a salary or on a stipend.

After further research on the Fuse Corps, I found that the venture is meant to offer a fresh approach to solving society problems that the government has so far been unable to complete. The program’s goals are to create a new generation of leaders that can solve problems from the ground up. The program is promoting a REVOLUTION!
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BLOG INSTRUCTIONS

Blog 5 before session 6 What (interest) or Who (person) Inspires You? For this week’s prompt, the Blog Council wants you to examine how this class relates to your own interests. So, please write about how this class relates to some of your own intellectual or other learning interests. We are NOT interested in how it relates to a specific career goal. Plan B: same idea, but based on a person. See whole post for details.

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