At one time, the argument was fervently and sincerely made that executives should be recompensed heavily with stock options, because it ties their interests directly to their company's interests. In practice, that doesn't appear to be the case. Stock options aren't very useful unless the market is booming, and the market generally doesn't boom unless new money enters, which doesn't happen unless confidence is high. Creating an illusion of 'confidence' is crucial. So, speculation is far more important than tending the company's business, or job-creating, or even lobbying, or half a dozen more-industrious uses of their time and attention:
The important point here is that even the people who look like they've made their money from a business outside the financial industry -- the Bill Gates or Steve Jobs types -- really haven't. They've made their money from *stocks*, not from selling things or services.
It's not just the wealth from the stocks of their companies, either. This chart of income sources for the top hundredth of a percent
shows that dividends -- direct shares in profits -- have become much less important since the 1970s, while "wages" have become much more important. It looks as though these extremely wealthy people are working for their money, doesn't it?
Except that "wages" includes stock options and bonuses, which are often based on stock price performance. So wealthy people who aren't getting money from S-corporations, sole proprietorships, and partnerships are getting almost all their income from capital stock/ real estate gains, and from stock-indexed wages.
And the stock market isn't really for investment, it's for *speculation*. "Give them money and get a percent of the profits" is investment, because you (the wealthy person) are tying your income to how much money the company actually takes in for doing things. "Buy low, sell high" is speculation, because how much money you get doesn't have to depend on anything the company actually sells or does -- all that matters is what potential buyers think, and their confidence that the stock will continue to be worth more in a market of people who think like them.
No wonder so many of our Very Serious Leaders keep saying "confidence" is of overwhelming importance, more important to businesspeople than things like "are there enough customers?" -- even though actual businesspeople are most concerned about lack of demand.
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