The IMF recently conducted a comparative study of ten post-war economic recoveries seven quarters after the business cycle trough, or recession’s end. Its findings for the United States are stunning. For employment and household finances, the current recovery is the weakest since the end of World War Two. For the business and financial sectors, it’s the strongest. The banks, recipients of lavish public funds and guarantees during the meltdown, are reporting a rapid recovery from their lows in profits, loan charge-offs, and equity-to-asset ratios. Meanwhile, growth in employment, disposable personal income, personal savings and consumption, and total GDP all anguish. Needless to say, investment in structures—residential and non-residential—comes in dead
last. Were it not for a strong performance in equipment, software, and exports, the current recovery would barely have a pulse. The IMF study does nothing to weaken the increasingly credible thesis that downturns induced by financial crises differ structurally from those in normal business cycles.

At the same time that the business and financial sectors are becoming decoupled from employment and household balance sheets, gaps among different parts of our population are growing. A report just out from the Pew Research Center shows that while the median net worth of all U.S. households declined by 28 percent between 2005 and 2009, the figure was 53 percent for African Americans and 66 percent for Hispanics. And these percentages mask an even more troubling reality: The assets of black and Hispanic households have just about been wiped out. Median net worth in black households stands at $5677; in Hispanic households, $6235. No doubt this reflects the collapse of the housing market, which has hit areas of Hispanic population growth with special ferocity. But it reflects something else as well—high levels of unemployment. According to the most recent BLS report, the jobless rate stands at 11.6 percent for Latinos and 16.2 percent for blacks, compared to 8.1 percent for whites. Using savings to finance necessary expenses, which most unemployed households are forced to do, rapidly depletes modest asset accumulations in a hurry. Overall, the disparity in household wealth has risen to the highest level on record, wiping out two decades of progress for minority householders.

This painfully slow recovery is rending the fabric of American society. In turn, these growing socio-economic gaps are contributing to the rising polarization of our politics and declining trust in government—developments that will make it even more difficult to forge agreements on the policies we’ll need to get out of this deep hole. No doubt adverse trends in the global economy are making things even worse. But in the end, our economic crisis is a governance crisis. The stalemate over the debt ceiling is a symptom of this systemic fact.

By PRADNYA JOSHI

IT turns out that the good times are even better than we thought for American chief executives.

A preliminary examination of executive pay in 2010, based on data available as of April 1, found that the paychecks for top American executives were growing again, after shrinking during the 2008-9 recession.

But that study, conducted for The New York Times by Equilar, an executive compensation data firm based in Redwood City, Calif., was just an early snapshot, and there were even more riches to come. Some big companies had not yet disclosed their executive compensation.

So Sunday Business asked Equilar to run the numbers again.

Brace yourself.

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.

Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.

And at a time of so much tumult in the media business, it might be surprising that some executives in media and communications were among the most richly rewarded last year.

The preliminary and final studies put Philippe P. Dauman, the chief executive of Viacom, at the top of the list. Mr. Dauman made $84.5 million last year, after signing a new long-term contract that included one-time stock awards.

Leslie Moonves, of the CBS Corporation, got a 32 percent raise and reaped $56.9 million. Michael White of DirecTV was paid $32.9 million, while Brian L. Roberts of the Comcast Corporation and Robert A. Iger of the Walt Disney Company each received pay packages valued at $28 million.

“Media firms seemed to be paying a lot,” said Carol Bowie, head of compensation policy development at ISS Governance, which advises large investors on corporate governance issues like proxy votes. “Media companies in general tend to be high-payers, and they tend to feed off each other.”

Other big payers included oil and commodities companies like Exxon Mobil and a few technology giants like Oracle and I.B.M.

Some of the other highly paid executives on the new list who were not in the April survey are Gregg W. Steinhafel of Target, who had a $23.5 million pay package; Michael E. Szymanczyk of Altria, $20.77 million; and Richard C. Adkerson of Freeport-McMoRan Copper & Gold, $35.3 million.

Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.

In some ways, chief executives seem to live in a world apart when it comes to pay. As long as shareholders think that the top brass is doing a good job, executives tend to be well paid, whatever the state of the broader economy. And some corporate boards were probably particularly generous in 2010 after a few relatively lean years for their top executives. In other words, some of this was makeup pay.

“What is of more concern to shareholders is that it looks like C.E.O. pay is recovering faster than company fortunes,” says Paul Hodgson, chief communications officer for GovernanceMetrics International, a ratings and research firm.

According to a report released by GovernanceMetrics in June, the good times for chief executives just keep getting better. Many executives received stock options that were granted in 2008 and 2009, when the stock market was sinking.

Now that the market has recovered from its lows of the financial crisis, many executives are sitting on windfall profits, at least on paper. In addition, cash bonuses for the highest-paid C.E.O.’s are at three times prerecession levels, the report said.

Of course, these sorts of pay figures invariably push the buttons of many ordinary Americans. Yes, workers’ 401(k)’s are looking better than they did in some recent years, but many investors still have not recovered from the hit they took during the financial crisis. And, of course, millions are out of work or trying to hold on to their homes — or both.

And it’s not as if most workers are getting fat raises. The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.

On the flip side, some chief executives have consistently taken token salaries — sometimes, $1 — choosing instead to rely on their ownership stakes for wealth. These stock riches don’t show up on the current pay lists, but they can be huge.

Warren E. Buffett, for instance, saw his stock holdings rise last year by 16 percent, to $46 billion. Other longtime chief executives or founders who are sitting on billions of paper profits include Jeffrey P. Bezos of Amazon.com and Michael S. Dell, the founder of Dell.

Resurgent executive pay has some corporate watchdogs worried that companies have already forgotten the lessons of the bust. Boards have promised to tie executive pay to company success, but by some measures pay is rising faster than performance. The median pay raise for chief executives last year — 23 percent — was roughly in line with the increase in net corporate profits. But it far exceeded the median gain in shareholders’ total return, which was 16 percent, as well as the median gain in revenue, which was 7 percent.

FOR the moment, shareholders aren’t storming executive suites. And while they received a say on pay under new federal rules last year, their votes are nonbinding. In other words, boards can still do as they please.

Pay specialists say companies are taking a hard look at these votes. Still, only about 1.5 percent of the 200 companies in the Equilar study were rebuffed by their shareholders on pay. A vast majority of the votes passed overwhelmingly, with 80 percent or 90 percent support, according to Mr. Boyd of Equilar.

Mr. Boyd says companies are making an effort to explain their pay plans. “We saw companies take it very seriously,” he says of the new rule.

In some respects, the mere possibility that shareholders might reject a proposed pay plan is enough to make corporate executives think again. Ms. Bowie of ISS says that outrageous payouts — such as so-called tax gross-ups, in which companies cover executives’ tax bills on perks like corporate jets — are becoming rarer.

Disney for instance, eliminated tax gross-ups this year in the face of shareholder ire, she said.

Company directors have the power to rein in runaway executive pay, but it is unclear whether either they or shareholders will do so in 2012. “It can be done if there is the will,” Ms. Bowie says.

1.1 million jobs created in 2010 alone, more than the entire 8 years of George W.Bush:

The Arizona Republic

She was told to read this letter during the session by Senate President Russell Pearce.

Have we heard any objections from any of their fellow Republicans? No. And why not?

Because this is how they see Arizona.

I need you to help us stop the out-of-touch Republicans once and for all. Your contribution today will be put to use immediately, allowing us to highlight their radical agenda.

Russell Pearce and his extremist Republicans see things through the narrow perspective of their radical ideas.

They don’t see our Arizona.

Republicans don’t see hard working Arizonans struggling to support their families. They don’t see our economy flatlining while other states recover. They don’t see our children in overcrowded schools, about to have their funding slashed again.

Click here right now and contribute $10, $25, $50 or more to show Republicans that they are not representing you and your Arizona.

Across Arizona people like you are coming together under the big-tent Arizona Democratic Party to fight for what really matters to Arizonans – a stronger economy, safer streets and better schools.

Thank you for joining us in the fight to fix our broken system and rebuild Arizona.

Luis Heredia

Executive Director
Arizona Democratic Party