Regular readers know that I do not believe the there is a legitimate two party system in the U.S. Granted, the nominal parties differ on social issues but when it comes to matters of cold hard cash, they all work for the same bosses. Hopefully, Obama will prove me wrong, but his appointments don't suggest that will happen anytime soon.
Anyway, two prominent news items support the observation that the only political party in the U.S. is the Business party. The first is government's insistence that workers at American companies take pay cuts. The second is the widespread lamentation that there is nothing we can do about out-of-control executive looting, errr compensation.
Both of these issues should be easy to understand and resolve, yet all across the political spectrum our leaders just throw up their hands and say that nothing can be done. Perhaps there is areal need for American workers to take pay cuts to put their salaries in line with foreign workers. If this is a valid principle, we should apply it across the board.
For example, American executives make far more money than their Japanese or European counterparts (whose companies, btw, have apparently been much better managed):"
On average, chief executives at Japanese companies with more than $10 billion in annual revenues are paid about $1.3 million a year, including bonuses and stock-option grants, according to Towers Perrin, a consulting firm, based on data gathered between 2004 and 2006. But chiefs in the U.S. are paid about $12 million, and chiefs in Europe are paid $6 million.
So why don't our leaders demand the same pay equivalence of executives as they do of workers? And perhaps we should look at bringing our Senators and Congress people's total compensation more in line with world averages.
Of course everyone throws up their hands and wails that there's nothing we can do about executive compensation. That's really not something the government can, or should legislate. And I agree. The government shouldn't legislate anyone's salaries (not even their own).
But the government can certainly influence executive pay and it's not a great mystery how. The fact that the obvious answer that has worked so well in the U.S. historically and continues to work well abroad even up to the present day is not even discussed in the congress or the media is yet another demonstration that we are a one party state.
What is this mysterious solution to this problem? It's right out there in plain site.
The progressive tax system, duh. Just tax the greedy motherfuckers back to earth. That's what we've done in the past. That's what they do abroad. I'll leave it to the experts to figure out the best levels, but something like 70 percent of any income or capital gains over $500,000, 90 percent on any income or capital gains over 2 million, and 99 percent on any income or captial gains over 100 million. Would that result in people not wanting to become rich? No, but it might result in people not willing to mismanage and loot companies in order to become richer than Croesus.
Something like that would go a long way to solving a lot of problems. Too bad there's no opposition party or independent media to put it on the table.
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