Last week, the Dow dropped 420 points in three days, revisiting levels not seen for months. Pundits, advisors and analysts blame the drop on panicking investors who vacillate in their worries between rising inflation and a slowing economy.

That's the least of the stock markets' problems. The real problem is gluttonous management.

The Enron scandal is one thing; those folks were crooks, but the American public and the American government failed to demand a clean sweep of all corporate miscreants. A few, like Martha Stewart, have gone to jail, but others have yet to be exposed, or held accountable. For the most part, corporate leaders are handsomely rewarded for doing nothing or driving their companies into the ground.

It's pandemic. If corporate officers aren't breaking the law, they're still breaking the laws of decency.

One of the most sickening examples of self-service was Don Carty, American Airlines' CEO, who arm-wrestled flight attendants and pilots to their knees two years ago with threats of bankruptcy, all the while negotiating golden parachutes for upper management behind the scenes. He got caught, but it makes one wonder why investors don't revolt more often.

While AA's stock plummeted to a couple of dollars a share, Carty proved that by lying to the employees, he was also lying to the investors. Obviously, the golden parachutes indicated more money was available than investors knew about.

But investors piled back in. AA is hovering, pardon the pun at around $10-$11 a share, a pittance for one of the engines of the American economy -- air travel.

And the hits just keep coming. AIG just ousted its CEO of 40 years, Hank Greenberg amid announcements that its shoddy accounting has gone back 14 years, including deals in 2001 and other years with Warren Buffet's General Re (The Oracle of Omaha denies knowing anything about the misuse of reinsurance products, reports the eye-rolling financial media). Days before he stepped down, Greenberg made a stock gift to his wife of billions of dollars in stock options. How is this possible?

Now Wal-Mart is under scrutiny. A former vice chairman and board member, Tom Coughlin, was ousted for padding his expense account. He didn't even bother with fake receipts -- he just asked for approval on his word. Petty, but true, at least Wal-Mart has taken some steps to stop more alligator boots from walking out the door (allegedly what Coughlin wanted Wal-Mart to pay for, among other necessities of life) and has frozen his benefits, worth over $9 million.

No wonder publicly-held company CEOs choose to break the law or thumb their noses at investors. The benefits are simply too good.

Why? In 2004, the average CEO of a major company received $9.97 million in total compensation, according to the Associated Press, more than a 12 percent increase over 2003. The average worker's paycheck grew only 2.6 percent.

In 2003 it was reported that the average severance package for a CEO was $16.5 million, according to Paul Hodgson of "The Corporate Library." It's only gone up from there.

CEOs can do a lousy job and still make a fortune. Of the 367 firms Hodgson studied, 55.5 percent pay total salary, bonus, and equity awards for at least three years following the departure. His comment? "With CEOs receiving an average $15 million to start, and $16.5 million to finish, they hardly need to make any money in between."

And many don't -- make money for their companies that is. While unemployment soared over the last five years, so did CEO payments. Whether their companies stock went up or down, boards of directors appeared eager to award jaw-dropping compensation packages.

The bottom line is that smaller investors who have been allowed to sit at the poor end of the banquet table thanks to lower brokerage fees, online trading, mutual funds, drip accounts, and more have gotten such rotten leftovers, they're being poisoned.

What's shocking is the lack of outrage. They don't know where to complain. Who will listen? The AFL/CIO is trying to do something about it. Newspapers publish the occasional expose of CEO salaries and allude to proxy battles waged by shareholders at annual meetings. But overall, little changes.

When it comes to buying homes, at least investors have more control over what they are getting, and there is some accountability to buyers through seller disclosures, E & O insurance and other means. With the stock market, when a CEO profits illegally or immorally, investors can do little if anything because if they sue, they won't get their investment back anyway.

If a house loses value, at least the buyer has somewhere to go to stew about it.

Published: April 19, 2005

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.