A Tale of Two Stories: While CEO Pay Soars, American Homeowners Are Getting Screwed
Story the First: Home Market Takes a Tumble. Most of this story is behind Wall Street Journal's paywall, but here's an excerpt:
Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.
Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.
...[M]onthly declines for February and March were "really staggering," [Stan Humphries, Zillow's chief economist] said. They indicate "a reflection of the true underlying demand, which is now apparent because most of the tax credit is out of the system, and it's being completely overwhelmed by supply."
...Prices are decelerating in large part because the many foreclosed properties that often sell at a discount force other sellers to lower their prices. Mortgage companies Fannie Mae and Freddie Mac have sold more than 94,000 foreclosed homes during the first quarter, a new high that represented a 23% increase from the previous quarter. More could be on the way: They held another 218,000 properties at the end of March, a 33% increase from a year ago.
There are a couple of important points about this I want to note: 1. A lot of USians, especially following George "Everybody Gets a House!" Bush's administration, are directly affected by the housing market in a way they are not by the stock market. Especially because...
2. USians who owned homes were encouraged to treat their home equity like a piggy bank during the last two decades. (Because why address the spiraling healthcare costs bankrupting USians, for example, when you can tell people to gamble with their homes to save their lives?) Now people who took out "home equity loans" are frequently carrying two mortgages on a property that is worth less than it was when they took out the second mortgage, so they are doubly underwater on their property.
This is but one small slice of why residents of the US—who are also facing, just for a start, record unemployment and underemployment, crushing credit card debt, rising heating and cooling costs, falling social services assistance, increasing educational costs, decreasing job benefits, exploding local and property taxes, and prohibitively high healthcare costs if they lack insurance (and frequently even if they do have insurance, because insurance companies want to make profits, not actually pay for healthcare)—are struggling mightily. We're being pushed from every conceivable angle, and we're losing the battle.
Story the Second: CEO Pay in 2010 Jumped 11%.
Chief executives at the biggest U.S. companies saw their pay jump sharply in 2010, as boards rewarded them for strong profit and share-price growth with bigger bonuses and stock grants.
The median value of salaries, bonuses and long-term incentive awards for CEOs of 350 major companies surged 11% to $9.3 million.
...[T]he sharpest pay gains came via bonuses, which soared 19.7% as profits recovered.