The incessant drumbeat about unfairness and inequality

2014

This is from a NYT OpEd by Roger Cohen. It’s well worth reading in total. However, I am focusing on one comment.

It is not just the sense that something has gone seriously wrong with a polarized American democracy where scorched-earth Republicans devote their politics to obstruction, and the government can grind to a halt as it did last year, and a C.E.O. can earn $80 million for a few weeks of work while incomes for most Americans are stagnant.

Presumably he is referring to this:

Comcast Corp. released details of deal negotiations and turned heads with the disclosure of an $80 million parachute for TWC Chief Executive Rob Marcus will receive if he is let go after Comcast acquires its smaller rival. Although Mr. Marcus has only held his post since the beginning of the year, his employment dates back to 2005, and he had served as both its chief operating officer and CFO.

Such a payout is indeed outrageous but quite irrelevant except to the shareholders. However, parachute payments have their place because without them executives would be more interested in protecting their jobs rather than making deals in the best interest of their company and shareholders.

While mentioning such payments in the same breath as stagnant incomes, commentators ignore incomes such as Michael Jordon earning $80 million last year mostly from endorsing an array of products, many targeting consumers who likely cannot afford them. Such selective comparisons undermine the credibility of the inequality argument.

Liberal commentators focus on endless comparisons between high and low income Americans, (at least high income in the corporate world) while we should be more concerned with the causes of income stagnation and focused on the reasons lower and middle income Americans are not gaining. This includes global competition, changing job requirements, inadequate training and education and in many cases dysfunctional families.

Bashing the most financially successful, selective as it may be, simply distracts us from solving the real problems and avoids telling Americans the truth about the world of the 21st century. On the other hand, such populist rhetoric does garner votes, perhaps a hint as to the real priorities.