A USA Today headline caught our eye, early this morning:

"CEO pay soars in 2005."

And, no CEO's pay soared more than the CEO of Capital One Financial. Thanks to a generous package of options and perks, Mr. Fairbanks took home almost $250 million last year - a sum greater than the profits of 550 Fortune 1000 companies, including Goodyear Tire, Reebok and Pier 1.

Do we begrudge him the money? Do we want to get together a mob to string him up by the heels and shake the coins out of his pocket? No, dear reader, not at all. In fact, we rather admire him - he's succeeded in gaming the system. This fat squirrel has found the softest, coziest, niche in the ol' oak tree. The median pay for CEOs of America's 100 largest companies rose 25% last year...to $17.9 million. Mr. Fairbanks left them all writhing in the dust.

More power to him.

Do any of these hustlers deserve even $1 million, let alone $17 or $250? Probably not. There are probably plenty of people who would do the job just as well for less money. We say that from experience as well as theory. We have been CEO of our own publishing business for nearly 30 years. Nothing we ever did was worth $1 million in a year. Granted, it is a very small business, but running a small business is harder in many ways than running a big one. In a big company, you have squads of highly paid professionals to help you cheat the shareholders. In a small company, you have to do it on your own.

Mr. Fairbanks owes his fortune to two things: He heads a company that is in the debt mongering business at a time when debt has never been more popular, and he heads up a business whose owners are idiots. In theory, Capital One Financial's profits should go to the capitalists who own it. Instead, a big chunk of them go to the managers...the wily hustlers who figure out how to hijack the enterprise for their own interests.

Or, take Mr. Ivan Seidenberg, CEO of Verizon Communications. In 2005, the top man at Verizon got a raise of 48% - to $19.4 million. Wow...you would guess that Verizon had a very good year, right? And, you would be wrong. Verizon's owners saw nothing but misery. Their stock went down 26%. Their bonds were downgraded. Earnings declined 5.5%. The other managers had to be clipped back; 50,000 managers had their pensions "frozen," according to the New York Times report.

How did Mr. Seidenberg do so well amidst so much financial suffering? He hired an independent consultant to help determine what his pay should be. This consultant noted that the company had exceeded its "challenging" benchmarks and rolled over.
But it turns out the consultant was not so independent after all. Instead, he had been doing business with Verizon for years and had received about half a billion dollars from the company since 1997. Neither Verizon nor the consultant is talking, according to the Times.

It happens everywhere, in every industry, in every government, in every body. The rot sets in. The parasites worm their way in. Eventually, we are all doomed to corruption, degeneration, and death.

There. How's that for a happy note?

Well, there is a happy part, as we mentioned, yesterday. For even the swindles are often swindles. The company that employs a $250 million CEO has more money than it thinks; all it has to do is fire the man. The family that strains under the burden of heavy health care and education expenses could simply shrug it off. More below...

But first, we stand back in awe and wonder at the majesty of the whole swindling edifice. People have come to believe that they can build a heaven on earth - a big rock candy mountain, where thanks to the ever-improving miracles of central banking, compound interest, medical science, higher education, democracy and cosmetic surgery, they will live happily ever after.

History will stop. They can eat bon bons every day and their teeth won't rot. They'll be able to spend all their money, and still grow richer. Wall Street products will make them wealthier. The health industry's products will make them healthier. The universities will make them smarter. Too bad it ain't necessarily so...

Bill Bonner, with more of views from London:

*** "Americans ought to regard the word 'growth' with trepidation," warns our friend James Kunstler.

"When invoked by presidents and economists, it is meant to imply ideas like 'more' or 'better.' It's a habit of thinking left over from the exuberant phase of the industrial age, when there was always more of everything to get. Nowadays, though, as we enter the terminal years of cheap energy, the word 'growth' invokes a new set of ideas.

"For instance, 'impossible.' With the price of oil edging toward $70-a-barrel now, and likely to flirt with $100 by the end of the year, the effect will be higher costs for virtually all products and services, and tremendous stress on every socioeconomic organism from the family to government at all levels to the Ford Motor Car Corporation. The only 'growth' we might expect under these conditions is the growth in our exertions to stay where we are, and the truth is that many of the weak will simply fall behind.
 
"Another idea that 'growth' might invoke would be a fear of an unstoppable rising population competing for scarcer resources: incomes, energy, food, shelter. Surely this is one of the specters behind the illegal immigration issue, a dawning recognition that the American cornucopia is becoming an emptier basket, with fewer fruits, less energy, and not many gold nuggets left in it.
 
"The cheap energy era led us into a climax of surpluses, and these surpluses represented the general 'more-ness' and 'better-ness' of late industrial society. In a post cheap energy world, accumulated surpluses will be meager to nonexistent. There is bound to be a scramble for whatever is left. Geopolitically, this means a contest for the world's remaining oil, which tends to be concentrated in just a few places. In each nation, there is likely to be a parallel scramble for whatever fruits, gold nuggets, and therms are still to be had, throwing off a lot of red-hot political sparks that will burn people. A lot of the remaining energy worldwide will be devoted to these scrambles, and thus essentially wasted.
 
"There are many ways of viewing this 'growth' predicament, and some strategies we can turn to in the face of it. An obvious one is to change our behavior, to stop acting as though our destructive, terminal, and futile activities were beneficial or indispensable. For instance, we could yield to the reality that the age of mass motoring will have to end. Instead of desperately seeking 'alternative fuels' to run our 100 million cars, we could make an effort to restore our railroads. Instead of a million McHousing starts out in the meadows and cornfields, we could repair our existing towns and cities. There is no reason why they cannot be rewarding, beautiful places. There may well be greater benefit in walking more and driving less. The well-off Americans who have visited Europe over the past several decades invariably notice this.

"Anyway, we are going to need every meadow, cornfield, and pasture that we have, because as cheap energy wanes, we are going to be desperate to grow enough food to feed ourselves - another reason to be wary of alt.fuel fantasies based on growing crops dedicated to gasoline substitutes."

*** Henry has been bringing us up-to-date on the status of globalized commerce as seen through the eyes of a French history teacher and recollected by a 15-year-old:

"She said the world has changed. We, in the West - well, actually she refers to it as the North - got a big lead in the industrial revolution. Now, we're rich so we can afford to educate people. So, we don't have to do the manual work anymore. In China and India, they now make everything. In the North - well, I guess she means in Europe, but she says Australia, America, and New Zealand are all in the North, too - we don't have to make anything.

"We have service economies. You know, we make movies...and invent video games...and sell insurance. That's why our countries can be clean. We don't need any heavy industries. Besides, they don't pay very well. And even though we don't make anything, we still have so much money left over from the Industrial Revolution that we're able to own the factories overseas - like Coca Cola. They sell Coke all over the world, and the profits go to the United States. That's the way it works now. But, she doesn't think its fair to the countries in the South."

"Henry, what does she say about the riots in France over the new work rules?"

"She says that the government is trying to make France more like England and America," replied Henry, "where people don't have any rights. You know, you can fire people whenever you want...for no reason."

*** Poor Jacques Chirac. Yesterday, he withdrew the CPE - the reform measure that would have made it easier to hire young people, and fire them, too. Who wants reform when you can earn a decent living without having to work too hard?

*** A letter about education expenses...and how to avoid them:

"We definitely think along the same lines! When we looked at the price tag for college for our (gifted, naturally!!) son, we ran for the nearest exit. (Though admit to having sweat blood to pay for his Friends School [in Baltimore] education - worth every penny and by graduation time, probably equivalent to most college diplomas) While his Friends went to Ivies and strangled their families financially, our son got in the honors program of a state university out west - and had a wonderful education, too.

"Later, he rejected Columbia and NYU grad school admission offers because of the ugly debt lurking under the offers, and got two master's degrees from The New School - with lots less debt plus plenty of work experience. When I suggest to my friends that they invest in the best elementary & secondary schools (private or public, depending on where you live) and let college take care of itself (work-study, whatever), they look at me like I'm out of my mind.

"There's a real fear that without a diploma from a top school, little Johnny or Judy will never succeed in life - won't get that all-important interview, won't be at the front of the line, etc. It's tragic, really - one of my friends confided that she and her husband have over $200,000 in debt for their three kids' education - going into their retirement years. She's desperate, but has to keep up appearances, so the debt continues to rack up."

*** Education, defense, wealth, health - who doesn't want more? And, who can resist the simple logic - spend more on them and you will get more from them? But, the point of diminishing returns comes very quickly. Studies show that life expectancy can be greatly increased by a few simple measures - basic medical services, penicillin, decent nutrition, and sanitation. Beyond that, a man can spend a lot on health care. Still, he is likely to be carried to his grave by pallbearers who spent much less.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.