Sunday, June 19, 2011

When Greed is Good, Democracy is Bad

link here to article

It is well known that income inequality is a global problem. This feature article in the Washington Post describes the role that changes in executive compensation has played in the US. The attitudes of top executives have changed along with the attitudes of many Americans who have adapted to a win/lose version of the economy. More specifically, corporate boards comprised primarily of fellow executives, are more than willing to oblige the CEO's who appointed them to the boards on which they serve.

It may be surprising to many that the US culture was not always so supportive of increasing the share of company profits that are awarded to the top executives. It may also surprise some that the pattern of income distribution in the US compares more with that of developing countries than it does to that of other advanced economies. Rising income inequality is also anathema to the democratic process in the US much like it is in developing countries. The concentration of wealth contributes to the concentration of political power.

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