Candidate McGavick goes on offensive over Safeco

Candidate McGavick goes on offensive over Safeco

Bill Virgin writes:

If the campaign wants to do itself a favor it can spare us the chatter about "the market sets CEO compensation." Even if that were true -- and it's not -- it's pretty sorry rationalization that will only make it look silly.

Not that I exact a reporter to understand market forces, Bill probably thinks when someone says "the market" they mean Pike Place, so his confusion is understandable. The lack of understanding regarding THE MARKET is why Bill and his fellow PI reporters will be looking for new jobs before long, they no longer produce a product that enough people are choosing to purchase, and the PI will thankfully be out of business soon.

What Bill fails to do is define who actually does set wage rates, perhaps the government sets minimum wages for executives as well as the 3% of entry level workers who get at least $5.15 an hour.

Bill, the market is that space where individuals exchange goods and services in an arrangement where each party to the transaction receives value equivalent to, or greater than the resource they choose to exchange. The shareholders of Safeco hired McGavick and structured his compensation package to meet their business goal of increasing the value of Safeco, and the price of their holdings. The shareholders had other options, they could have hired me for a lot less, but I have to confess, I don't really have the executive experience in the insurance industry to create the results McGavick did.

So Bill in preparation for your next job, I recommend a reading assignment, Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations it's about an obscure concept called economics, and the supremacy of market forces, a concept that works every time it's tried.