Outrageous Executive Pay–At Taxpayers’ Expense
The money paid to the 600 highest paid bank executives that got bail-out funds would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.
America was punked. We were led to believe that bailing out Wall Street from its corporate greed was necessary for saving the economy from another Great Depression–and that it would free up liquidity, save jobs and mortgages, etc. Also, that execs had learned their lessons and would stop giving themselves billions in bonuses while trashing their companies.
We were wrong. The banks are sitting on the money. Mortgages are still crashing and job losses continue. The bailed out execs still have corporate jets (and, unlike the auto execs–whose mismanagement I do NOT excuse–no one asked the bank execs and insurance company execs about them!) and still justify their high salaries and bonues–with our money.
We need a serious conversation about economic justice in this country. I’d like to see us go back to the days when most company executives made no more than 10 times the average worker and no more than 20 times the lowest paid worker. I’m still not sure that would be “just,” but it is probably the best we can hope for in even a Keynesian capitalist society. I’d rather see public opinion (and the opinion of others in same industries) lead to this situation rather than government laws and regulations. I am not sure government should set salaries–for executives OR workers (as the GOP wants to do with UAW salaries). But we have to end the era of “Greed is good.” And we have to be more concerned about establishing decent floors under the lowest paid workers–and that won’t happen if there are not salary caps for executives. Who can set those caps if not the government? Well, in public corporations, they can be set by trustee boards.
The public outrage is growing–and should be growing faster and louder. If trustee boards don’t start reigning in executive pay, an angry public is going to seek other answers. Enlightened self-interest ought to kick into high gear.
Government can do something: Set an example. Members of Congress (House and Senate) and of the Executive Branch, from President on down, should take voluntary pay cuts, with saving split between the general budget and Social Security. In this time of crisis, I’d like to see maximum salaries on the Hill and in the White House of $75,000 per annum (which would stop people from going into government for the money), but I’d settle for a cut-off of $90,000. That’s already higher than most voters will ever see. The median income (pre-meltdown) for a U.S. family of 4 is $50,000 per annum, which means that 50% of Americans make less than that. Further, in many, perhaps most, cases, this is NOT from a single salary, but the combined incomes of 2-3 jobs. (My wife and I have 3 jobs to make about $47,000 per annum–including the income I make from numerous magazine articles per year since many of those pay very little. I have GOT to start writing for better-paying venues. She has a master’s degree and I have a Ph.D. By contrast, people in the financial sector with just a baccalaureate pull in huge sums. No wonder we have trouble recruiting teachers, firefighters, social workers, etc.)
The median income is a fairer judge of the economic health than the mean or average. If UAW workers are sharing a beer in a bar (celebrating having a job into the new year, perhaps) and Bill Gates walks in, the MEAN/AVERAGE income goes WAY up–but it’s still 3 ordinary joes and Bill Gates.
I am no economist. I have no big answers. I do have a sense of the populist anger in the country toward decades of the “Greed is Good” philosophy and its current results. I think we’d better start having real conversations about our values and priorities before that anger is not channeled into constructive change, but boils over into the streets. The greedy have sown the wind–and only repentance can keep us all from reaping the whirlwind.
As the case of Republic Windows and Doors in Chicago shows, banks have NOT been helping companies meet payroll and they have closed–just what this money was supposed to prevent. Citibank is using taxpayer bailout money to put its name on a sports stadium and sponsor the Tournament of Roses Parade and Rose Bowl. Excuse me? With our money?
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