BahRamYou
1d ago
I think they'll eventually succeed at taking over the West Bank. In part because they want it (it's good land and it's right there for the taking, not to mention the religious motivation to control jeruselum), and in part because they've found a way to successfully "salami slice" it, taking little bits at a time. The rest of the world expresses outrage and indignation but does nothing, and the Palestinian authority can't fight back. There seems to be no shortage of Israeli's volunteering to move in there, and not just soldiers but normal middle-class families. This might take multiple generations, but it'll happen.
I do not think they'll take over the Gaza strip that way, because the situation is totally different. Nobody really wants it, because it's an ultra-dense ghett of bomb-blasted buildings and unexploded ordnance. The people living there are highly motivated to fight back, and there's a ton of world attention that would make a huge outcry if Israel tried to adjust the borders even slightly. There's also no holy city there, no natural resources, limited water... it's not a place any sane person would want to live.
BahRamYou
1d ago
Would you agree that, even if in general CEO pay is not a major expense on their companies, there are particular cases where it could be, and Musk at Tesla is one of those examples? And it's interesting that he wa able to get it past the board and all sorts of normal shareholder protections, to the point where it required a court ruling to stop it. It's not some perfect elegant self-maintaining system.
BahRamYou
1d ago
you can just choose not to invest in companies that you think overpay their executives.
Well, I can't, because I'm not a finance genius who has devoted my life to picking stocks. My money is mostly in simple index funds, because (a) that's what everyone assured me was the smart thing to do and (b) those are simple and convenient for me to use as a regular person. My company 401k plan never offered me a "basically the S&P 500, but avoid stocks that overpay their executives" fund. Most other normal stockholders are in the same situation as me. I don't even get a chance to vote on proxy votes, since my share votes are handled by the index fund managers. And even when I did own individual stocks in the past, and I got a proxy vote as a regular stock holder, my vote was so small (a few shares out of billions at a blue chip company) that it didn't seem worthwhile to even mail it in. I had less power to influence them as a stockholder than I do to influence the US government as a voter, and that's a pretty low bar.
And most other players can't do this sort of thing either. Rich people might have their money tied up in stock for the company they worked for. Finance managers have to convince the rich people they work for that they're doing a safe, normal strategy. Hedge funds have to follow rules that mitigate risk for their institution. And most people just aren't interested in this sort of thing.
Ok, in principle there's room for some young Warren Buffet type to make his name by finding these companies, shorting them, and outperforming the market. But only to the extent that their excess compensation takes away from every other factor going on, and his efforts to short the stock would be countered by everyone else shovelling money into it. As long as the executives keep it below a few percent, it would be hard to notice.
But think about how far this has gone. It's no longer "the executives deserve this much money because it's what's best for the company." It's "they can pocket hundreds of millions without hurting the company in a way that anyone steps in to stop them." You could make the same argument for how a retail cashier could get away with stealing money out of the till, or how a middle manager could get away with embezzling from the accounting department, but for them it's illegal and there are protections in place to stop that sort of thing.
All of this to say- the market is not some omniscient, perfect entity. It's mostly efficient, but there are still plenty of efficiencies. I think there's a tendency among shape-rotator type people to assume that it's perfectly efficient because that makes for a much more elegant argument, but the reality is a lot more messy.
Also this:
It's the shareholders who are getting cheated here, not the general public or the employees
I would argue that the executives, especially the CEOs, are being disengenuous here. They're not just some shmuck working behind the scenes, they act as the public face of the company, for both its employees and the general public. Their personal life reflects on the company just like a politician's personal life reflects on his country. When the CEO tries to make himself seem like a moral paragon when he's obviously just there to grab as much cash out of the company as he can get away with, that's going to demoralize every single employee and tank their performance far beyond the actual cash impact of his salary.
BahRamYou
2d ago
I grew up in a town that used to be a streetcar surburb 100 years ago. Looking at those old photos, it's almost like looking at a steampunk fantasy. All the streets that I know as sort of grungy, run-dow stripmalls, are full of very dapper gentlemen and their elegant female companions. They must have had to walk a bit to get there, but that's no problem since they were all (apparently) quite thin and fit. They don't seem to have any concern at at all for crime.
I would dismiss this as just some historical quirk, except that I've also experienced the same thing in real life- in Japan. Pretty much the same thing- low crime, low stress, low car ownership areas with mass transit, high trust, and lots of people walking in fancy fashions. They have other problems too of course (getting groceries every day with no car in a declining economy is no joke), but they still manage to make it work.
Conversely, I've experienced the opposite, living in a somewhat wealthy neighborhood in Mexico. There, razor-wire fences and private security guards are the norm. Plenty of cars and material comforts, but absolutely no social trust.
I feel like (economic wealth) and (social wealth) are almost two independant variables, with very little relationship to each other. In the US, we've gained the former at the expense of the latter. It didn't have to be this way.
BahRamYou
3d ago
I think your response actually supports my point. In theory "we" the stockholders could cut their CEO's pay, or "we" as voters could pass a law limiting all CEO pay. But in practice, no one is organized enough to actually be able to do anything about it. The CEOs get their pay not because some perfectly efficient market is finding the correct value for them, but because they have more political power where it counts.
Why do you think the board is any less incentivized to cut staffing costs than managers? They're the ones applying that pressure!
It's a bit different though. The pressure to cut expenses comes from the top down. But there's no one above the board of directors who can hold them accountable- they're already at the top! Many of them serve on multiple boards at once, and rotate in and out of CEO or other C-level jobs at other companies, so they have a strong "class interest" in pushing up CEO pay in general. They might get some bad press or worker grumbling about unfairness, but there's no one that can actually fire them for setting the CEO pay too high. In theory I guess the general stockholders could all come together to do it, but they're so disorganized that it never happens. The only practical way to force them out is for some corporate raider to do a hostile takeover, and even then there's golden parachute clauses designed in part to preevent that sort of thing.
also worth noting that the ratio of CEO pay to average worker pay has massively increased over the last few decades. So it may well just continue to increase until they're taking home some large fraction of the company's total revenue as their personal salary. Or maybe the CEO ends up with all of the company's stock (making it harder and harder for regular shareholders to oppose them) and they become a private company, like SpaceX already is.
edit: most of the starbucks board members are current or former CEOs of other companies. They directly benefit from raising CEO pay, since that sets a higher baseline for themselves to justify their own pay. This isn't some abstract "class consciousness thing," there's a very small group of CEOs and board members who are tightly connected.
Stanislav Petrov
I wonder if he was awarded 1% of all the USSR's money as a reward for his services? That should be fair, right? Or did he not get anything at all? Our intuitions for what's fair really fail at this kind of scale. (edit: he was not rewarded. it was seen as an embarassment for the entire Soviet system and was quietly swept under the rug)
BahRamYou
4d ago
i mean, i'm happy to take my salary in the form of corporate stock if that would 10x my compensation... but regular employees don't seem to get that option.
BahRamYou
4d ago
Then you should also consider that part of his high pay is also in keeping expenses low, so there is in fact an antagonistic relationship there. If starbucks was forced to use all of their profits to pay employee salaries, the board would probably expect to pay the CEO a lot less.
This feels like a Pascal's Mugging type of argument though. Or more specifically the petersburg paradox
Is there any specific reason to pay the CEO $95 million? It's not like there's a standard market rate for CEOs. It varies wildly and depends heavily on the subjective opinions of the board members. Why not go out and find another CEO for $200 million? A $200 million CEO should be even better than a mere $100 million one, right? Starbucks makes about $36 billion in annual revenue right now, so even $200 million is (like you said) a drop in the bucket. A mere 0.5%. If the new, better CEO can increase performance even 1%, he's worth it.
But then you can play the game again, and again, and again. There's no upper limit for CEO pay! Where does it stop? Their stock is kind of struggling right now- would a $10 billion CEO lead them to greatness? Or should they just cut costs and try to remain in their nice, small, profitable niche? Most sane people would say they should just stick to selling coffee, but you could do the math and imagine that even a 1% chance of becoming the next hot tech stock is worth gambling the entire company on.
Starbucks is admittedly a weak example for this. They have a lot of part time hourly employees, and they all get health benefits, so their biggest expense by far is already employee compensation. It just doesn't go as much to salaries.
For a different extreme, look at Tesla. 125,000 employees right now. Market cap 1.3 trillion. Elon Musk right now earns about 8$ billion a year under current conditions, but it goes up by 1% of Teslas total market cap for each additional trillion in their market cap. If he hits just the easiest goals, he gets $36 billion a year. If it goes up to 8 trillion, he clears an eye watering $878 billion in 10 years, almost $90 billion a year. (yes that's in stock, not cash, if that makes a difference)
Doing the same math as you, that could be ($90 billion)/(125,000 employees) = $720,000 per employee, per year. Is that still just a trivial cost? I dont' think so. In that case he's being given a large chunk of the company as his compensation. (And that's just the CEO, non including any of the other executives who also get paid a lot)
You could argue that in that situation he deserves it since the stock went up so much. But like... how do you know? How does anyone know? If some Tesla employee delivers full self driving while the government decides to tax gas cars and promote EVs, does Elon really deserve that much credit? Surely there should be some limit where we decide that a CEO is just too expensive, but there doesn't seem to be any mechanism in corporate America to limit it. Meanwhile, managers are very much incentavized to cut expenses, which heavily includes limiting employee salaries. There isn't any mechanism in the corporate structure to say "OK our stock didn't grow much. But on the plus side, we were able to consistently raise salaries for all our employees every year."
in history they sometimes talk about "the great man model," where history is heavily shaped by a few exceptional individuals. They mostly bring it up to disparage it, saying how history is far more complicated than just what people like Caesar and Alexander did. They'd be laughed out of the room if they tried to give all credit for an entire country to just one person. But apparently corporate leadership still believes in this line of thinking- they value the CEO far more than anything else. I can't help but worry that our largest corporations are under the control of middlebrow business majors who vastly oversimplify everything.
BahRamYou
4d ago
anecdote but when i worked as a cashier 20 years ago, we were told to always keep one $2 billa the bottom and never give it out. That way, if someone robbed the cash register, it was relatively easy to trace the $2 bill. Maybe there's a lot of small businesses keeping them around for that purpose?
BahRamYou
5d ago
Apparently most $100 bills are used in the black market: https://www.moneyandbanking.com/commentary/2017/11/12/cash-is-king-but-100-bills-are-for-crooks
Returning to the present, why is 90 percent of the U.S. increase in circulation accounted for by $100 bills? ... To put it simply, most of the U.S. currency in circulation is almost surely being used by criminals.
Which to be fair, could just as easily be things like non-licensed garage sales and used car sales skipping sales tax. But that's still a crime, and you can see why the government isn't eager to make that stuff easier. But hey, maybe if inflation continues, the $100 will soon be as practical for normal purchases as the $20.
There have been many instances of palestinian settlements in the west bank being demolished and the people being evicted: https://news.un.org/en/story/2025/06/1164971
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