Nicholas Kristof has a sticky piece today on the grotesque overpayment of CEOs who fail. Case in point: Richard Fuld, chief of the now-flushed Lehman Brothers, made a half-bil between 1993 and 2007. Good investment.
This story, and others like it, run the board on the traits of a sticky idea: They’re simple (Too much money!). Unexpected ($17,000 an hour!). Concrete ($6,000 shower curtains). Credible (the amounts are indisputable). Emotional (Outrage, envy, disgust). Story (Pick your CEO). And yet the public outcry never builds up to a roar. Only a half-hearted squawk.
I can’t explain it. Maybe people feel powerless to affect it. I.e., if you were really angry, to your core, about CEO pay, what would you do next? At least with global warming, you can switch out a lightbulb. But sadly, there’s no incremental action with CEOs — you can’t take a dollar out of Fuld’s pocket. (Even if you did, it wouldn’t be worth his time to retrieve it, because in the next 10 seconds, he’d have made another $47.)
The idea is sticky, but what’s the action?
I can choose not to work at said company. Or choose not to invest in said company. Or only invest in companies where the CEO’s pay is performance-based (aka NFL incentives)
But, these aren’t public officials. And I can’t see salary cap legislation getting through the legislative process.
Sometimes the action is being aware, remebering, and passing it on to someone else.
I think it would be more effective to utilize personalization that does not require envy. Hit them in their own pocketbook. This is easy enough to do with the CEOs of oil companies, but the results aren’t that striking. For instance, if executives earned $0 per year, gas prices would fall by only a dime per gallon (if my memory serves). By contrast, the federal government takes 4-5 times that in taxes.
With the financial markets, it’s a lot more difficult to quantify. It’s not a zero-sum game, and they’re into everything.
Here’s a bit of concreteness for you… Someone on Twitter mentioned how hard it is to put his head around the some $2.1 trillion bailout of the financial markets, presumably to include Fannie Mae and Freddie Mac.
I can certainly relate.
But I decided to take my own advice here to try to break that down into what it means for each individual worker in the U.S.
As it turns out, when you divide $2.1 trillion by the more than 195 million people in the labor pool, it comes out to a little less than $11 per person. Divide $2.1 trillion by the $130+ who filed individual tax returns, and the difference isn’t that significant.
When you put it like that, it seems much more approachable from a political standpoint, and it’s easier to dismiss it as no big deal. It sounds like if everyone just forked over the cost of a couple of value meals from McDonald’s, the financial markets — and everyone’s jobs — would be saved.
But that’s the exact opposite message from what I wanted to communicate. $2.1 trillion is a big deal — especially when it gets filtered through the bureaucratic overhead. But more than that, so is the situation that led up to it, which, if we don’t solve, will result in more and greater financial problems in the future.
In other words, the failure of the banks and quasi-government agencies was caused, in part, by the very same government that is promising they can be trusted to fix it with $11 per taxpayer — and then actually hold onto much of the financial power they seized.
How would anyone make THAT message concrete? I’m at a loss.
Cam Beck, you’re off by three zeros. Using your numbers, it’s actually over $11,000 per taxpayer. NOT an easy number to swallow, especially when you take the whole national deficit into consideration.
Green -
I was thinking about that today and just came back to correct myself. Glad you spotted it. You’re right. That’s much less easy to swallow.
But it’s worse than that in some ways, if you think about it, for not all people who file a tax return actually pay any taxes. So per taxpayer, it would be over $11k.
The national deficit is only half the story, too, when you consider how deeply Americans are in debt already. I forget what the number is. We’ll be digging ourselves out of this hole for awhile.