High Salaries Impossible to Justify
Income inequality isn’t an abstraction. It’s real. It takes money out of your pocket. It reduces your ability to pay your bills, to take a vacation, to send your kid to college.
Income is a zero-sum game. If you work for a company that employs 1000 workers, the decision to pay $10 million a year to the CEO reduces each of the other employees’ paychecks by an average of $10,000 a year.
Until recently Americans tended to accept the argument that seven- and eight-digit salaries were justified by the value top executives added to the bottom line. Visionaries like Bill Gates and Steve Jobs earned billions in profits for shareholders. They were entrepreneurs. They took risks that changed the world. They deserved to rake in the rewards.
People began reassessing this view after the collapse of global capitalism which began in 2008 and–despite the Obama Administration’s desperate attempts to cook the unemployment numbers–continues to spin out of control. The crisis was triggered by the crash of exotic mortgage derivatives invented by multimillionaire bankers and hedge fund traders, who then exploited the mess they made to shake down the federal government for trillions of taxdollars, which they used to give themselves raises and redecorate their executive suites.
It was hard to see what value they added. As for the risks, well, the taxpayers covered those.
Banks and other transnational corporations are “too big to fail.” So too are the executives of companies that do fail. The New York Times, bleeding tens of millions in losses per quarter, recently let go its underperforming CEO–yet eased her out the door with $4.5 million in “consulting” fees. Despite suffering a net loss of $7 billion in a single year, Hewlett-Packard paid Leo Apotheker a severance package worth $13.2 million, including moving fees to Europe and up to $300,000 to cover a loss on the sale of his house in California.
Hardly the ideal of the deserving geek getting his or her due for her or his Big Idea That Paid Off.
Which is part of the reason that four out of ten Americans tell Pew Research pollsters they’d like to see the United States adopt a socialist or communist economic system– a number that has remained unchanged from 2009 to the present.
It’s five out of ten for people aged 18 to 29, and for those earning under $30,000 a year. These people know the system doesn’t give them a chance to get ahead, that it exists to protect the massive wealth of people whose mission in life is to make things worse.
Mitt Romney’s tax returns expose the sharp contrast between the capitalist ideal and corporatist reality. Romney got $45 million during 2010 and 2011. “The Romneys hold as much as a quarter of a billion dollars in assets, much of it derived from Mr. Romney’s time as founder and partner in Bain Capital, a private equity firm,” reported The Times.
The thing is, the world would have been a better place had Bain Capital–and Mitt Romney–never existed.
Bain never created anything. There are no Bain products, no Bain innovations. It was a cash extraction machine that targeted profitable companies, saddled them with debt from leveraged buyouts, and looted the smoldering ruins for the benefit of its top execs. Twenty-two percent of Romney’s targets were driven into bankruptcy. Thousands of workers lost their jobs.
For causing this mayhem Romney deserves prison. Instead he made nearly $60,000 a day.
You can hardly say he “earned” it.
It doesn’t matter how hard you work. How smart you are. How good your ideas are. No one can earn $60,000 a day. It just isn’t possible.
The public offering of Facebook stands to make founder Mark Zuckerberg as much as $28 billion–more than the gross domestic products of Panama, Jordan and 100 other countries.
Zuckerberg is already worth about $17 billion.
He founded Facebook eight years ago. Does he deserve to earn $15,000,000 a day? $6,000 a minute?
Does anyone?
I use Facebook every day. But only because I’m expected to. It adds nothing to my life. At bare minimum, life would be no worse without it.
It’s not even a decently designed website.
And even if you love it–is Facebook a $6,000-a-minute idea? Really? How is that possible?
Face it: It hurts America to let one man hog all that cash.
Zuckerberg’s $45 billion could cut a check for $3,500 to every officially unemployed person in the United States. But we live under a system under which nearly 13 million people suffer–so that one man is permitted to aggregate unimaginable wealth.
But not for long.
It just isn’t possible.
(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)
COPYRIGHT 2012 TED RALL
