HILLARY CLINTON: As you look across the country, the deck is still stacked in favor of those already at the top. And there's something wrong with that. There's something wrong when CEOs making 300 times more than the typical worker.Bill O'Reilly starts off a recent talking point memo with this predictable, morally corrupt "phone-it-in" class warfare crap that the Democrats are perennially running on; I remember Al Gore railing on it in the 2000 campaign after the mythical Camelot Clinton two-term Presidency. (By the way, this is one of the few pieces O'Reilly largely gets right: what labor needs is economic growth. to which the Democratic prescription of tax, spend and regulate is toxic. His message needs a little tweaking and editing, but it's basically in the right direction. I'm so used to O'Reilly's largely neo-con messages, with which I disagree, that I find it rare we're in agreement.)
Now almost any free market economist can dispatch this nonsense without breaking a sweat. But let a layman show you the way. There are a number of people who make a lot of money: professional ballplayers, entertainers, skilled surgeons, not to mention both Clintons as speakers, ranging anywhere from $200K to $700K an appearance. Now I last went to a major league game while living in Houston during the 1980's, but reading a 2013 column, saying the average family of four (four tickets, two beers, two sodas, four hot dogs, parking, two programs and two caps) would shell out over $300 for one outing at Yankee stadium, doesn't really surprise me; the minimum salary for a major league player is around $500,000, and of course there are lucrative broadcast/cable rights. (Minor league players make a fraction of that, if not on the 40-man roster, they can make $1150-2150 a month, while roster players earn a low to higher middle income salary.) Do I think a major league player is worth up to a few million dollars a year? Yes--in the sense they have the skills to attract fans to the ballparks or to media outlets to watch them play. Would I pay $300 dollars for a premium ticket to watch the Yankees? Not even if the Babe, Gehrig, Mantle and DiMaggio were still playing for them... But the point is, that's the market in action; the consumer and/or advertisers are willing to put up the dollars that make a multi-million dollar payroll for a small roster possible.
Do I think either Clinton is worth $200K a speech? Hell no. But if they are able to pull off this scam on "progressive" audiences, so long as they don't make quid pro quo commitments like "I can get Obama to return your phone call", "I know that regulator; let me talk to him" or "let's talk over breakfast once I'm elected President", why should I care how overpaid economically illiterate "progressive" yuppies throw their money away? Now my price to listen to Hillary Clinton speak is $50,000 plus expenses, and I want the payment in Bitcoins... Don Boudreaux of Cafe Hayek recently wrote his typical speaking fee is around $1000; one Boudreaux speech is easily worth more than any combination of 800 Obama or Clinton speeches.
But here's the point: there is a voluntary market that funds these types of transactions. I don't lose a single cent because some yuppie is shelling out big bucks to see former President Zipper. There's no Chief Justice Roberts' mandate tax that forces me to buy a ticket to the event.
But let's go back to the "survivor" of the "Bosnian sniper attack": "There's something wrong when CEOs making 300 times more than the typical worker." Why? Why is that any less reasonable than Madonna making 300 times more than her typical fan? Why is that any less reasonable than some overrated unaccomplished politician making 200 times more a speech than an accomplished economist who actually knows what he's talking about? Why should a janitor who works at Apple make more than doing the same type work at your local public school? Simply because the company invented and markets insanely popular products? Now to investors, there is a limited pool of people capable of running one of the world's largest, most profitable companies, whose products could be eclipsed almost overnight by a number of highly innovative competitors. If the Enron or AIG incidents taught us anything, it taught us that a CEO not up to the task can drive a company into bankruptcy and lose thousands of jobs... Do you really want to gamble your company's future on lesser qualified candidates willing to take an artificially low salary? Ben and Jerry's, headquartered in the People's Democratic Republic of Vermont, in 1994 dropped its low pay-cap ratio; you have other companies gameplaying, stretching their caps or shifting salary dollars to benefits, etc. But it's very easy to see how competitors could raid a company's up-and-coming leadership with very competitive offers. It's not a question of "fairness"; I have no doubt that a janitor can work just as hard at his job as an executive, a professional sports star, etc. But I remember mopping floors at 6 AM as a 16-year-old college freshman; I just wasn't as talented in filling $300 stadium seats, ready to run a Fortune 500 company or designing the latest infomercial gizmo...
So the first thing the former First Lady needs to learn is the law of supply and demand. Some professions can pay very well, like engineering, actuary, and physician/surgeon, but they often have demanding coursework, require graduate study, residencies, licensing requirements, continuing education, etc. As a doctoral student for 3 years, I barely made over expenses; my idea of a celebration for passing one of my comps (major, minor, oral) was going to a dollar cinema on Westheimer and splurging on a soda and popcorn. Some people don't want to travel or work on nights or weekends, things you sometimes have to do to climb the ladder. As a junior single professor, I didn't have a single date over 5 years. I remember thinking that once I defended my dissertation, I would have time to date and enjoy life; no--then comes what to most young professors is the drive to tenure, including publications, university service, etc. I was spending 5 years up to 70-80 hours a week, the last 3 looking for next year's appointment, working towards tenure that never happened. I don't believe in tenure either; not sour grapes but a principled position that tenure is morally hazardous. Still, I had to bite my tongue as more than one "teaching-oriented" (vs. research) interviewer said they could have a decent publication record, too, if they sacrificed at the expense of their students. Talk about presumptuous arrogance; I felt like blasting back that I sacrificed nothing but my personal life. You have a similar story climbing the corporate or professional ladder.
Specifically, on the propaganda Ms. Clinton is citing, it's based on a select number of very large corporations. As Mary Perry of Carpe Diem points out, there are 27 MILLION private companies vs. the 250-300 featured in the union propaganda talking points. According to the 2013 BLS figures, the average CEO pay was under $180K, less than 2% over the prior year.
So given the fact that Barack Obama also ran on economic populism, how does she account for the past 6 years of subpar economic growth, declining labor force participation rate, and high unemployment rates among minority communities? After all, Obama has spent more money and piled up more debt than any President, by far, in American history; the Democrats had super-majorities in his first two years in office; Obama has hired many veterans of the Bill Clinton economic team,
- How does she explain the listless economic performance under Obama? If she wants to trash the GOP since 2010, it should be noted that Clinton lost control of one or both chambers of Congress after 1994...
- What would she have done differently in terms of taxes, spending and regulation? Why shouldn't we expect more of the same during a Clinton Presidency?
