Tee hee

Shane Williams says:
September 12 2017 at 9:58 pm
“elites are mobile”

That’s so true when talking about Brexit.

But not true when tax rises are discussed. Then elites are not mobile.

I wish people could understand the difference.

Richard Murphy says:
September 12 2017 at 10:21 pm
I have not the slightest idea what you mean

32 comments on “Tee hee

  1. There was a point on QT (bbc) that Lord Adonis made, when specifically criticising the vice chancellor of Bath Uni for I think it was for a £450k salary. He said that career high flyers did it for the vocation. The insistence being that if you cap the wages you don’t get a brain drain.
    I dogo with his thinking somewhat. In the same way there is a consumer surplus, there must be an employee surplus. “I’d do this job for less, but hey i’m not complaining.”

    However the action to reduce that surplus from the employers point of view that his Lordship suggests is to be a salary cap. But that means you still are going to lose those emloyees at the margin, who really are prepared to take a job in Poughkipsey community college to get that higher salary.
    So what is the economically savvy way of reducing the employee salary surplus?

  2. There is certainly an international market in research academics, especially if by “international” you refer mainly (but not entirely) to the USA. Whether there’s one in academic bureaucrats I’m less sure. True, you may have to pay up if you want to hire a bureaucrat from, say, Yale. But I suspect it’s unlikely that Yale’s headhunters scour the whole British uni system for potential bureaucratic employees. Happy to be corrected, of course, by provision of a list of sizzling counterexamples.

  3. We don’t need to solve an “employee surplus” – if there is a surplus, there’s no problem with it going to employees.

    The vice-chancellor problem is that universities are making too much money because of lack of effective competition, which is keeping the price too high for students.

    Deregulate the sector so that we have easyUni or whatever competing on price, and the problem goes away.

  4. @dearieme
    I agree, I think this is more a problem of the principal enriching them self than paying for the administrator equivalent of a young Wayne Rooney (it is not that difficult a job).

  5. Dearieme + 1

    Glynis Breakwell’s international market value as a university bureaucrat is untested: she spent her entire career at Surrey University before becoming vice chancellor at Bath By the way, she specialises in “leadership, identity process and risk management”. I’ve no idea what “identity process” is, but her identity as a trougher and bullshitter is probably not in doubt.

    https://en.m.wikipedia.org/wiki/Glynis_Breakwell

  6. @theophrastus – she’s also a member of the very iffy Society Of Merchant Venturers in Bristol (a lads’ club holdover from slave trading days). Someone I know has regular contact with her – she is “terrifying”

  7. Murphy exhibiting classic Leftist behaviour, using or discarding an argument depending on what is required at the time.

    Anyway, regarding high earners (heads of an organisation). Given the explosion in laws in the past twenty years, and the increasing probability of being prosecuted for something or other, is there an added ‘premium’ on salaries?

    I don’t buy the ‘vocation’ balls. Who would take on vastly more responsibility for no extra money?

  8. Relevant to the uni pay issue for bureaucrats – the principal-agent problem. Firms (or their owners) go to a variety of lengths to stop the bosses enriching themselves without adding value, for example performance-related pay. To what extent does this apply to the uni sector? If someone could get Bath ranked within the UK top 5 during a five-year tenure, and within the global top 20, I’d say they were worth half a million even if uni rankings are statistically dodgy.

  9. “Who would take on vastly more responsibility for no extra money?”

    What responsibility? Which CEO of any organisation, public or private has done time for something their organisation did under their watch?

    None that I can think of. Most get pushed out with full pension rights and a big payoff. There is no risk premium for heads of organisations. Owners maybe, but not paid employees.

  10. What responsibility? Which CEO of any organisation, public or private has done time for something their organisation did under their watch?

    Done time? What about just losing their job. Last time I checked Chase has paid north of $20 BILLION in regulatory fines under Jamie Dimon’s watch. Not only is he still employed (and well compensated) by Chase, he is now considered to be some sort of philosopher-king in Washington political circles.

    I don’t care how big Chase is, if you, as CEO, can’t manage the company well enough to keep the fines out of the BILLIONS, you should be an ex-CEO. Lord knows how many people Dimon has fired for making $20,000 mistakes over the years.

  11. @ DtP
    A lot of those fines were for WaMu and other acquisitions for their alleged misbehaviour prior to their rescue by JP Morgan. How much has Bank of America paid in fines for the pre-acquisition misdeeds of those it rescued?.
    On this side of the pond Lloyd’s Bank is paying £billions in fines and compensation for the misdeeds of Bank of Scotland prior to Gordon Brown talking his pal Victor Blank into making Lloyd’s rescue it.
    The message for all bank CEOs in future has got to be “don’t rescue anything – let it sink and cherrypick the good bits from the carcase”

  12. Bath Uni is self-owned, so there’s no pressure from owners to restrain executive pay.

    The executive is governed by a council which I presume gets to vote on executive pay. A quick glance at Bath Uni’s council meeting minutes suggests that they’re more preoccupied with the rights of refugee students than with executive pay.

  13. Andrew M

    “Bath Uni is self-owned, so there’s no pressure from owners to restrain executive pay.”

    It is a charity and there’s a good argument it is abusing its charitable aims by paying such amounts to its employees.

    Time to withdraw charitable status from it and many others. After all, presumably charitable status is tax abuse (TM) R Murphy

  14. Competition, yes but probably have to be of disruptive entrants. Moocs haven’t yet made much of a difference which surprises me.

    Performance pay – agree. Measurements never are perfect proxies (and thus difficult to identify pure value add most you can do is align interests)
    Suppliers try to capture back the consumer surplus by market differentiation. Say with budget,standard and premium variations around the same product/service.

    Wouldn’t an institutional equivalent of that be prestige. In the UK the honours system performs that as Lord Adonis should know,,, so maybe that’s the point… cap their salaries but enoble the VCs.

  15. @Theophrastus – the SMV is held in much lower regard than its heavily edited Wiki entry would suggest; very much a club where local matters get “arranged” by the great and good without the messy necessity of democracy or public scrutiny

  16. @ken: both those cases involve individuals who were directly involved in the criminal activity, which is very different from carrying the risk of subordinates breaking one of the myriad of laws that exist today, not being involved personally, but still being found guilty of that criminal act. That is what was suggested – high CEO pay is in part compensation for the risk that you may have to carry the can for others criminal actions.

  17. “…very much a club where local matters get “arranged” by the great and good without the messy necessity of democracy or public scrutiny.”

    Private money should have minimal public scrutiny, surely? Why should the Rotarians or the feoffees of some wealthy mediaeval trust have to account to the “public”?

  18. I’m not entirely sure I want to go into it on here but there are definite allegations of corruption, influence peddling and so on….

  19. A lot of those fines were for WaMu and other acquisitions for their alleged misbehaviour prior to their rescue by JP Morgan.

    True, but I can think of at least 9 BILLION that is Dimon’s and Dimon’s alone.

  20. “Who would take on vastly more responsibility for no extra money?” Someone who thought they’d enjoy vastly more authority.

    I’ve heard of two cases of a VC from elsewhere being appointed as Master of a Cambridge College and then – allegedly — having to be got rid of because he thought he could throw his weight around in the bullying style he’d become accustomed to.

  21. @Hallowed Be
    Poughkipsey community college
    That’s no way to talk about Vassar 🙂
    PS Poughkeepsie SVP

  22. I work in a university, and I don’t see much competition for these roles. Most of the Professors puff themselves up selling their international thought leader status because they publish in the right places. The impact or reach of what they publish is irrelevant, much like most of their output. Once they’re up there the ambitious creep their way into top jobs and get onto enough government talking shops that they continue to get employment because of their status rather than their knowledge.

    Murphy’s unsubstantiated hubris and egotism actually mean he’s well suited to the sector. Just look at the way he forgets to add “of practice” to his job title.

  23. If you had enough disposable wealth or could crowdfund it, how much would you need to endow City Poly with a Richard Murphy Professorship of Murphology? I guess it would be about £2 million before Snippa would apply

  24. Are there 200,000 dedicated Murphologists out there prepared to slip a tenner in the slot, gift-aided of course?

  25. Better still, give Snippa the ” Thought for the Day” slot. The slot that reminds everyone that they need to shit rather than listen to some accredited idiot

  26. @ DtP
    You know more about US banks than I do because not all US news gets reported over here and the FT, which is the most reliable of UK sources on US business, is pro-Dimon. So I’ll concede on Dimon having made a BIG mess.
    My last comment still stands, nevertheless.

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