I believe that most people understand the importance of a strong Wall Street and strong corporations. The problem is that neither is functioning properly.
The U.S. government established rules/laws regarding the functioning of the above two parties. Corporate boards of directors, by law, are supposed to protect the stockholder primarily and Congress fails to enforce this to the detriment of our society.
Twenty years ago, directors formulated pay for CEOs and top management by paying them 50 times the average salary. If the average salary was $50,000, the CEO would earn a salary of $2,500,000. In the last 20 years Congress and boards of directors have allowed salaries, in many cases, to be 500 times the average salary, or $25 million!
This has happened while most employees’ salaries have dropped. If you reduced corporate and Wall Street salaries to reasonable levels, the money saved could create millions of jobs!
Wall Street salaries and bonuses are exorbitant compared to the average guy because they are taking money from all of the stockholders. When Wall Street bids up a stock and then sells it within seconds, the value of every stockholder’s shares go down. Wall Street money does not come out of thin air! Fast trades, hedges, swaps and options must be regulated so that the average shareholder, who rarely buys and sells stocks, is treated fairly.
The system is not working for the people at large, and it is time for our Congress to set things right.