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Economy and consumer spending

Executive compensation for Wall Street personnel should not be investor owned corporation offered this are the views that are shared by President Obama and they attacked are not so pleased. Whether or not they deserve to be compensated, is dependant on supply and demand and that is what the people need. Investor owned corporation as they maximize the wealth of the firms. Another issue is on how the employees need to be treated as they bring more wealth to the firms.

An employee who is more experienced and skilled is thought to be more valuable to the organization and moreover when they are executives, they need to be rewarded better. A high compensation will affect the nature of the business and that is why the value of compensation needs to be limited. But this is not always the case because if there are many skilled people, then they will be hired by the company at a lower compensation. The talent of the executives is limited and for this reason there is competition in the executive positions.

As the companies grew, so did their compensations and the figures they receive are very large as compared to other executives in other countries. Reinhardt U. E. Economix: Supply, Demand and Executive Pay, February 6, 2009 8. The tax rebate as signed by George Bush did not do much to revive the economy as consumer spending never improved and this can be attributed to the rise in the inflation rate. This fall in consumer spending occurred in the 2007 and 2008.

Households were also divided in the way the rebate was distributed as those ones with less income benefited while those who spend more were not helped in any way. The Federal Reserve survey which collects the income distribution data is said not to give the actual spending figures and if it were so, it would still be hard to draw the line between the causes that lead to more spending and their effects. The rebate will not work as people are now saving more as they need to be prepared in case they economy does not recover.

But the fact remains the stimulus plan as well as increased rebate will help the country even if it is for a while. Leonhardt, D. Economix. Do Tax Rebates Work? February 4, 2009 9 The Financial Stimulus as proposed by President Obama is necessary if the economy is to improve. But critics still say that it will not help much to create employment and that not much has been accomplished during the deal. It seems the lessons that were learnt during the great depression has not helped much as the move used by Roosevelt to increase the cash in the banks never really achieved its intended goal.

But that does not mean that if the economy did not improve because some people still got back to work and other programmes Roosevelt proposed like the Works Progress Administration and Social Security therefore Obama’s stimulus plan; which is much bigger than that used by Roosevelt, can work. In addition, the past failures should not limit progress and the enactment of strategic plans because after all times have changed. The government therefore has to support the proposed plan an even form rules on its usage so that people can be comfortable with its usage. This will go a long way in pulling the economy out of the recession.

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