Senator Claire McCaskill took to the Senate floor last week and put into words what most Americans know, but much of the economic and media elite systematically ignore: there is no economic or social justification for the massive incomes earned by the barons of Wall Street - especially when their companies continue to exist solely because of massive infusions of taxpayer dollars.
Last week it was announced that Wall Street gave out $18.4 billion in bonuses - presumably to reward executives for their performance in 2008 when the markets lost 30% of their value - and when their irresponsible risk-taking threw the world economy into a nose dive.
This comes on the heels of the spectacle of Wall Street firms coming with tin cups to Congress while it rewarded itself with million-dollar CEO bathroom make-overs, swank executive get-aways, $35,000 office couches and new $50 million corporate jets.
What are they thinking? The answer is that they live on anther planet -- one where they tell each other that they actually "deserve" their massively disproportionate share of the society's good and services. The decades-long explosion of executive compensation - especially on Wall Street - has convinced many of them that the gravy train can - and should - go on forever. It's about time that someone like Senator McCaskill made it clear that the executive compensation "emperor" has no clothes.
Some facts:
* The CEO of the average company in the Standard and Poors Index makes $10.5 million. That means that before lunch, on the first workday of the year, he (sometimes she) has made more than the minimum wage workers in his company will make all year. That translates to $5,048 per hour - or about 344 times that pay of the typical American worker.
* Most people would consider a salary of $100,000 per year reasonably good pay. But the average CEO makes that much in the first half-week of the year.
* And that's nothing compared to some of the kings of Wall Street. In 2007 the top 50 hedge and private equity fund managers averaged $588 million in compensation each- more than 19,000 times as much as the average U.S. worker. And by the way, the hedge fund managers paid a tax rate on their income of only 15% -- far lower than the rate paid by their secretaries.
There is simply no moral or economic justification for this kind of greed. This kind of executive compensation comes out of the pockets of other Americans, or--as it turns out - out of the mountain of speculative "wealth" that turned out not to really exist, and which sent the economy careening toward disaster.
In her Senate floor speech, Senator McCaskill proposed that none of the executives of the Wall Street firms receiving taxpayer money should be compensated at a level higher than the $400,000/year that the taxpayers pay the President. After all, it's pretty hard to justify why any of them have more responsibility than the President of the United States even in the best of times - but especially when their decisions just sent the economy into the trash heap.
The Hedge Fund Manager who makes $588 million a year makes 1,470 times more than the President. Isn't it ridiculous that the taxpayers should shell out their money to pay CEO's more - much less 1,470 times more - than the President of the United States?
Yet on this week's Sunday talk shows, you could hear "experts" and media commentators explaining that they need to do a better job of showing the rest of us why the best solution to our economic problems is more of the same kind of "benefit the rich" economics that lead to the economic collapse in the first place.
When you think about it, these people should be described by a word that they might be surprised to hear: Parochial.
Many of these Wall Street insiders, CEO's, commentators and "experts" think of themselves as being more "sophisticated" and "cosmopolitan" than ordinary Americans. In fact, they spend their time in the isolated cocoon of corporate jet travel, luxury condos, private schools, exclusive resorts, private clubs, and fancy cocktail parties. They talk to other people like themselves who are perfectly happy to validate their view that they "deserve" multimillion dollar compensation - that they deserve to be driven around in limousines and live in estates that are valued in eight figures.
They convince themselves that if the benighted masses just knew all that they know about credit default swaps or mark-to--market accounting practices, they would understand why it is somehow in America's interest that they should continue to be given a massively disproportionate share of the wealth created by our economy.
It would probably do them some good to become "cosmopolitan" enough to get out and talk to ordinary Americans. Ordinary Americans who work hard every day have a hard time justifying why the very people who caused the economic disaster--that may have cost them their job or their home-- deserve to be paid millions and millions of dollars.
They might also take time to study some history. Marie Antoinette would be a good place to start. She and her husband, King Louis XVI of France, shared their "cosmopolitan" attitudes. It didn't work out so well for them.
Robert Creamer is a long time political organizer and strategist and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.