If history is any guide there is a very good chance Trumponomics will improve America’s economic conditions. Indeed, after eight years of low growth (Obama’s economy never achieved an annual growth rate better than 1.4%) and wage stagnation, a big chunk of a generation that has never seen a booming economy may experience one for the first time. The next four years may represent a true fundamental transformation on a scale we haven’t seen since the 1980s.
The Left Is Already Playing Offense
With Obama’s legacy in the national rear view mirror, and a need to save their economic policies from the truth, the left is already playing offense. Democratic commentator Jehmu Greene recently appeared on a Fox News weekend program. Greene warned viewers of the dangers associated with an economy that was doing too well. According to Greene, if our economy performed too well the result might be a significant future economic downturn. Such thinking is reminiscent of Obama’s pledge to remove the peaks and troughs from our economy and instead settle for a persistent fiscal malaise where prosperity once existed.
The left will be hard pressed to offer a convincing rebuttal as the American economy rebounds. So, they will go for what they always go for – divide people and pit them against each other. The left loves to divide Americans along the lines of haves and have nots. The left will insist that the prosperity enjoyed by haves be redistributed among whoever the left believes are the have nots.
Enter from Stage Left, The Maximum Wage
The maximum wage is an idea the left adores, but doesn’t like to talk about much unless they have a reason. Switzerland provided one such opportunity for liberals to come out of their maximum wage closet.
In 2013 the Swiss went to the polls to vote on a ballot initiative called 1:12. The measure would have limited executive pay to twelve times what employees made. The American left loved the idea. CNN pundit John D. Sutter (please, check this guy out) wrote a lengthy Op-Ed in November 2013 extoling the virtues of the maximum wage and begging for it to become an American reality.
Forget for a moment that CNN is owned by Turner Broadcasting and that Turner Broadcasting’s founder, Ted Turner, is one of the richest executives on the planet with an estimated $2.2 billion net worth – far in excess of what Turner Broadcasting’s working stiffs take home. Sutter’s piece is as predictably redistributive economics as it is deliberate in hiding facts. Facts like the truth behind Swiss politicians backing the 1:12 initiative. Sutter mentions Cedric Wermuth as being just one such Swiss politician – nothing to see here, nothing to worry about. That Wermuth was a member of the Socialist International political group was of course never disclosed in Sutter’s Op-Ed.
According to Sutter, “here in America, the land of unequal opportunity” CEO’s earn in a day what an average worker earns in an entire year. The AFL-CIO (with their executives earning tremendous salaries) is Sutter’s source for that information. Comparing the Swiss ratio of executive to worker income with the American ratio, Sutter is sure the Swiss ratio us 148:1. He’s unsure about the American ratio. It’s either 354:1 or it’s 273:1. Either way, “it’s bad” he says. Why is it bad?
“It is fundamentally unfair for the pay gap to be so wide and that it allows a few uber-rich people to wield undo influence over society, economics and politics.” To buttress this aspect of his argument, Sutter defers to Cornell professor Lynn Stout.
Stout said “I’m a big fan of capitalism. I love corporations and I love the business world…but there are structural reasons to think that executive pay and CEO pay are out of whack…what we’ve got is basically an arms race where the CEOs are competing on pay because they want to have higher status than the others.” Sutter cited Stout’s observations as the source of resentment behind the Occupy movement and the 1:12 initiative.
Sutter’s solution would be to cap CEO pay at 100 times the minimum wage. Said Sutter: “It’s ridiculous that the Securities and Exchange Commission attempts to make CEO pay ratios transparent are controversial in the business community. The conversation needs to move forward. Limiting CEO pay to 100 times the minimum wage would still allow top execs to be millionaires – they’d earn a maximum wage of about $1.5 million per year, given the current federal minimum of $7.25 an hour, figured for a 40-hour work week. And here’s the best part: if the fat cats wanted a pay increase, maybe the best way for them to get it would be to throw political weight behind a campaign to boost the minimum wage.”
In an NPR interview conducted in October 2013, Stout provided fodder for Sutter’s conclusion. She said, “you could have a very simple rule that says any compensation in excess of three or four million’s not deductible. You could even tie it to a ratio, something simple to measure like the minimum wage. Any CEO pay that’s more than 100 times the minimum wage is no longer tax deductible. So there are lots of ways to approach this problem.”
So either Sutter’s a plagiarist or the maximum wage, under the terms discussed by Sutter and Stout, is something the left discussed among themselves in 2013. In any event, a quick dissection of Sutter and Stout reveals:
– The idea that too much wealth is a “problem.”
– “Unequal opportunity” is code for “let’s equalize outcomes via restructuring of the economy in the name of “fairness”.
– Use of the word “structural”. Whenever a liberal says “structural” what they really mean is fundamental transformation in the faculty lounge sense. Structural racism, structural problems in our economy, etc. They are all left-wing dog whistles that mean deconstruct who we are, and replace with what the philosocrats in the faculty lounge think we should be.
– Use of the term “arms race”. It’s a rhetorical molotov designed to energize the Occupy types. (Isn’t it convenient Occupy came about when they did so that Sutter could cite them? Were it not for the Journ-o-List and wikileaks one would wonder if there were any collusion between Occupy’s bosses at 39 West 14th Street and 147th West 24th Street in Manhattan, and CNN).
– The underlying theme that somehow, it makes sense to allow executives to earn $1.5 million but not a penny more represents some great moral triumph.
The Swiss voted overwhelmingly against 1:12. Even so, the maximum wage pops up periodically on-line in agenda pieces posing as economic analysis.
Remember Florida Yachts?
I don’t have $1 million. When you don’t have $1 million, it’s easy to covet the things that millionaires have. Some years back, liberal do-gooders thought it would be a great idea to hike certain taxes affecting the wealthy in Florida. Taxes associated with yacht ownership and operation for example, were raised, because a bunch of liberals thought it a moral triumph to play Robin Hood that way. The result?
Yacht owners either sold their boats, or they moved them elsewhere. (Kind of like how John Kerry used to park his fleet in Rhode Island until people found out about it and he grudgingly had to move them to Massachusetts and pay higher Massachusetts taxes on them). That meant tens of thousands of men and women working in businesses supporting Florida yachting suffered. Boat yards issued pink slips to highly compensated craftsmen. Shops that sold line, anchors, and navigation radars closed their doors. Floridians that once brought home a pay check saw their hourly wage drop to the true minimum wage of $0.00.
As viscerally nice as it might sound to limit what the “fat cats” can earn, the ugly truths are:
– It’s really nobody’s business what anyone else, rich or poor, earns.
– Limit executive salaries to $1.5 million per year and a lot of lower income earners are going to find themselves out of a job.
– Indexing this and that to the maximum wage is intellectually bankrupt unless it’s understood that the true minimum wage is in fact, $0.00. That’s what people out of work earn.
Most perplexing in all this (and other topics) is the left’s discovery of morality. At least what they define as morality. The left that couldn’t stand the idea of legislating morality before seems as of late obsessed with the idea of pushing their morality via executive order, court ruling, or legislation – in that order. The left have become Ayatollahs in the pursuit of their version of morality.
If we are to accept that the maximum wage is evidence of moral society, can we find any on this earth that have mandated a maximum wage?
Two Countries Have a Maximum Wage
They are Cuba (which limits each Cuban’s earning capacity to no more than $20 per month) and Egypt. The Egyptians implemented theirs in July 2014 and suffered a brain drain as banking sector employees moved elsewhere.
When people think of world economic powerhouses, they aren’t thinking about Cuba or Egypt. Nor are they thinking about places where the quality of life is great. Let’s face it. Nobody is fleeing from somewhere to get into Cuba or Egypt. Cubans and Egyptians are begging to leave what their home countries are.
That the American left wish to place the U.S. in the ranks of Cuba and Egypt in the name of their legacy speaks to their greed.
Image: Shutterstock; ID:544446202; Copyright: Jesus Cervantes