May 8th, 2003

smile

Paul Krugman The Acid test

We talk about war. About history. About bear. About other cool things. Meanwhile, business world - the most important battlefield of our century - remains unattended. Many non-american people will even ask you about meaning of word "CEO".

A quote from recent article of economist Paul Krugman .


The Acid Test

...... Our side, unless you happen to be a corporate insider, is losing the war.

Warren Buffett has called C.E.O. compensation the "acid test" for reform. Between 1970 and 2001, in an orgy of mutual back-scratching by C.E.O.'s and their boards, median pay among the top 100 executives soared from 35 times that of the average worker to more than 500 times as much. So what happened in 2002, as unemployment rose, wages failed to keep up with prices and stocks declined — and stories of corporate malfeasance filled the news? Nothing.

Last summer it seemed, briefly, as if the torrent of scandals — and the revelations about how closely some of our politicians were tied to scandal-ridden companies — would bring about a public backlash against corporate malfeasance. But then the topic largely vanished from the news, driven out by reports about Iraq's nuclear weapons program and all that.

I wonder about the demonstration effect. I don't want to sound like those Clinton-haters who attributed every immoral act in America to the president's bad example: Bill Clinton didn't invent sex, and the Bush administration didn't invent greed. But .......

full text of the article can be found here :
http://www.pkarchive.org/column/050203.html