« June 2006 | Main | August 2006 »

July 2006

Why Has CEO Pay Increased So Much?

From a new NBER paper by Xavier Gabaix and Augustin Landier:

Our central equation predicts that a CEO’s pay is increasing in both the size of his firm and the size of the average firm in the economy. The cross-sectional relationship between firm size and compensation has been well documented empirically. Moreover, the role of average firm size provides a novel explanation of the rapid surge in US CEO pay since 1980. While previous papers attribute this trend to incentive concerns or managerial entrenchment, we show that it can be explained by the scarcity of CEO talent, competitive forces and the six-fold increase in firm size over the same period.

Some strong words for the Democratic Party:

"Making Do With Table Scraps" by John McWhorter.

Many will object that while that was the best they could do a century ago, today, we have the option of voting for the party that "isn't racist." But in doing that decade after decade, what do we get? In 2006, the "racist" Republicans are the party behind programs saving children from failing schools, assisting religious organizations (e.g. black churches) in turning around their neighborhoods (e.g. black inner cities), and maintaining welfare programs as focused on job training. A funny kind of racism, this, regardless of whatever Trent Lott once said after dinner one night. Naturally there have been snags in carrying these programs out, and none are magic bullets. But the Democrats did not create them. Often they have even opposed them.

And for what? Under Mr. Clinton, there was, we recall, the Conversation on Race. This would appear to have led to precisely nothing, especially given the conviction so regularly expressed by black commentators today that there still needs to be some kind of "conversation" on race in America.

"Pander and Run" by Peter Beinart.

After years of struggling to define their own approach to post-Sept. 11 foreign policy, Democrats seem finally to have hit on one. It's called pandering. In those rare cases when George W. Bush shows genuine sensitivity to America's allies and propounds a broader, more enlightened view of the national interest, Democrats will make him pay. It's jingoism with a liberal face.

Some strong words for one particular Democrat:

"Hillary Can't Hide" by Joan Vennochi.

Bill Clinton searches for redemption. Hillary Clinton searches for cover.

Is this any way to run a presidential campaign?

(Ms. Vennochi is apparently unaware of Ms. Clinton's gutsy campaign against implanting microchips in children's brains and bold initiative against candy cigarettes.)

Kids, today

The next time someone makes the claim that "today's teenagers will be the first generation in American history to be less well off than their parents", show them "Stuff 101". I know, I know, a couple of anecdotes is not convincing, but still . . .

It's about all the stuff kids take to college.

You wouldn't believe it. . . .

Each year, the National Retail Federation asks incoming college students how much they and their families plan to spend on college. Last year, students estimated they would spend $34.4 billion on college merchandise, up one-third from the year before. Freshmen planned on spending the most -- an average of almost $1,200 per student. . . .

But the definition of basic has expanded. Is the Halo 2 video game that much better than the original? Does a young woman really need 12 pairs of high heels?

You say you've got a super fast PC with a super-duper fast Net connection and you're wondering what to do with all that speed and power? Have no fear, the Door is here. Take a look at some of the streaming video that's now available. Four examples:

Just weeks before his death from cancer, Jimmy Valvano addressed the NC State faithful at Reynolds Coliseum one last time.

David Letterman on his first show after 9/11.

Lighter: Stewie from Family Guy takes issue with 50 Cent's lyrics.

Stephen Gerrard's "Top Ten Goals". ("Ohhhhhh, you beauty!!") (Via Bill Simmons.)

A splendid example of a lousy graph: look at how "listeners [are] leaving traditional radio for the new audio".

Probably not.

Always Usually (thanks, Kerry) start a graph at the origin. And always "quote the data in context", meaning, in this case, provide as long a time series as possible so the reader can evaluate whether the "big" change you are illustrating is actually big or just random.