CEOs and other executives are overpaid nowadays by any reasonable standard. To make matters worse, taxpayers are footing a large part of the bill. Thanks to some historical lobbying and maneuvering, corporations are able to deduct much of the money they pay to their most highly compensated executives. We can blame corporate CEOs for selfish, shortsighted, and greedy behavior, and we should. But that misses an important point: government policy actually encourages them to behave that way. In one of its lesser-known provisions, the Affordable Care Act limited these tax breaks for health insurers who benefit from the law. While that may sound arcane, the implications could be profound and far-reaching.
The latest reports from Europe indicate that the continent is slipping back into recession. The U.S. is doing only slightly better, with positive economic growth but scant progress on the jobs front, and no growth in the earnings of the vast majority of Americans. Meanwhile, global climate change continues to worsen, producing unprecedented policy conundrums of how to reconcile the very survival of the planet with improved living standards for the world's impoverished billions and for most Americans, whose real incomes have declined since the year 2000. Amid all of these serious challenges, what common strategies are top U.S. and European leaders pursuing? Why, a new trade and investment deal modeled on NAFTA, to make it harder for governments to regulate capitalism.
The economy grew at an impressive rate of four percent in the second quarter of this year, according to a government report released on Wednesday. But the stock market promptly tanked. The Dow lost more than 317 points Thursday and another 70 points Friday. What gives? Financial markets like it when the economy grows fast enough to signal that the recovery is continuing -- but not so fast that labor markets might tighten and workers get more bargaining power to get raises. Markets also worry that if the economy grows too fast, the Federal Reserve might pull back from its policy of low interest rates.
It's hard to recall a time when the world presented more crises with fewer easy solutions. And for the Republicans, all of these woes have a common genesis: American weakness projected by Barack Obama. People in the Middle East, former Vice President Dick Cheney said recently, "are absolutely convinced that the American capacity to lead and influence in that part of the world has been dramatically reduced by this president." He added, "We've got a problem with weakness, and it's centered right in the White House." Really? It's instructive to ask: What exactly would a Republican president advised by Cheney do in each of these crises? Let's take them one at a time.
When you consider what has been happening to the average working person since the era of Ronald Reagan, it's amazing that the Republicans have fought the Democrats about to a draw. The recipe of Reagan and both Bushes has been to weaken government, undermine the regulation of market excesses, attack core social insurance programs, tilt the tax system away from the wealthy and towards the middle class, gut the safeguards that protect workers on the job, make college ever more unaffordable, and appoint judges who undermine democracy itself. That stuff is not exactly popular. Yet Democrats seem largely unable to convert Republican elitism to their advantage.
Last month, President Obama belatedly decided that the global climate crisis necessitated action to reduce carbon emission caused by coal. He authorized the EPA to issue draft regulations requiring utilities to cut carbon dioxide emissions from existing coal plants by up to 30 percent by 2030. With climate change and coal's inherent dirtiness not exactly state secrets, I wondered why the president had waited until a difficult election year, when Democrats in coal states face difficult elections. But Obama's unerring sense of timing is a subject for another day. And these proposed regulations, though an improvement, only scratch the surface of what needs to be done. The thought occurred: Wouldn't the economic dislocations of a serious effort on climate change be more bearable if the economy were at full employment?