If you have not already done so, I hope you will see The Big Short. Back when all the banks went bust, I did a fair amount of research on those banks. It turned out that the CEO’s salary at Countrywide went down from $140 million to a mere $100 million from 2007 to 2008. I don’t have my notes in front of me, but I believe the salaries of CEO’s at Lehman Brothers and Goldman Sachs went from the $40 to over $70 million area. Lehman Brothers at the time that happened was trying to get a rescue from British banks. The received the big NO and went belly up. Goldman Sachs, of course, had an in at the White House and survived. One reason, I heard, for increasing these already obscene salaries was that their stock options had gone down in value. In 2008 the stockholders rebelled and 43% voted for a provision to include a stockholder advisory on executive compensation. Stockholders need to do a whole lot more rebelling.
More recently, the CEO of Walmart was making around $20 million, while low level workers were making $9 an hour and having reduced hours so they were not eligible for full time benefits. Even if you consider $9 an hour, 40 hours a week, for 52 weeks that is only $18,720 (less SS and taxes). $20 million divided by $18,720 = 1068 to 1.
For more information just Google a corporation name and CEO or executive compensation, and a year if you want. Forbes used to have a really good listing of CEO compensation each year by industry category. Then in I think 2010 they changed that and made it a lot harder to track industry salary trends. At any rate, here is one link commenting on the disparity of CEO wage increases versus worker wage increases.
The Big Short is one big pile of
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NOT ONE WORD MENTIONED of Fannie or Freddie, the two GOVERNMENT institutions primarily behind the subprime mortgage meltdown.
NOT ONE WORD of the Community Reinvestment Act, the law signed by Jimmy Carter, and vigorously implemented during the Clinton Administration.
IT WAS FEDERAL GOVERNMENT policy that mortgages should be made available to EVERYONE regardless of whether or not they could afford them. Traditional lending standards of requiring a significant down payment, credit background checks, and verifiable steady employment went out the window.
I’m not saying Wall Street didn’t play a role in the mortgage meltdown crisis. It did. But the whole thing was created by misguided government policy meddling in the private sector and mortgage markets.
The Big Short makes NO MENTION OF FEDERAL RESPONSIBILITY WHATSOEVER. Typically Hollyweird BS blaming everything on the private sector.