October 11th, 2011


the politics of greed

A specter slate of numbers is haunting teh internets. Thus “Going for Broke – Will Legislate For Food”, posted on 4 July 2011 by gmyers2112, purports to illustrate the “Ratio of Pay CEO : Avg Worker” in several countries:

Regrettably, in an ongoing discussion, the blogger credits “the entrails of a still born calf” as his source of information. Thankfully, another prolific replicator is more forthcoming:

In “The Real American Exceptionalism”, posted on 18 April 2011, David Morris credits this substantially similar chart, purporting to illustrate the “Multiplier of CEO Pay to Average Worker Pay”, to a Management 510 class presentation, given at Louisiana Tech University on 17 November 2005 by Adam Choate, Dana Rowzee, and Jerrod Tinsley. The numbers quoted by Choate, Rowzee, and Tinsley are identical to those posted by gmyers2112, and likewise unsourced.

Another set of international pay ratios was assembled under the heading of “Growing Sense Of Outrage Over Executive Pay” by Heather Landy for The Washington Post on 15 November 2008. Restricting her analysis to S&P 500 CEOs, Landy tallies the ratios of their pay to the average wage of the American worker, as 42:1 in 1980; 107:1 in 1990; 525:1 in 2000; 364:1 in 2006; and 344:1 in 2007. But her international comparisons are far from the foregoing:
How American CEOs Compare With CEOs in Other Countries: “a 2005 analysis of the ratio of CEO compensation to the pay of production workers in the manufacturing sector showed U.S. chief executives taking a clear lead”:
  • Australia: 15.6;
  • Belgium: 18;
  • Canada: 23.1;
  • France: 22.8;
  • Germany: 20.1;
  • Italy: 25.9;
  • Japan: 10.8;
  • New Zealand: 24.9;
  • Spain: 17.2;
  • Switzerland: 19.3;
  • Britain: 31.8;
  • United Slates: 39.
Landy’s charts suggest that Choate, Rowzee, and Tinsley were comparing the ratio of pay between celebrity chief executives of the U.S. S&P 500, to their garden variety counterparts abroad. This contrast makes as little sense as singling out Brad Pitt and Angelina Jolie as model U.S. actor representatives in international income comparisons biased towards bit players world-wide.

More to the point, on 6 October 2011, Business Insider reported that the U.S is the #39 most unequal country in the world, based on the CIA compilation of Gini coefficients. The U.S. has more income inequality than Russia (#51) and China (#52). It ranks far worse than Portugal (#71), which rates as the worst in Western Europe. In consolation, the adjoining list of “The 16 Most Creative Countries In The World”, based on a recently released study by the Martin Prosperity Institute, counts United States as #2, right below Sweden counted as #1, replicating its achievement of the most egalitarian distribution of family incomes in the aforementioned ranking. In so far as these metrics are equally credible, creativity needn’t depend upon, or be stymied by, inequality. To complicate matters further, according to a poll conducted by the Pew Research Center for the People and the Press and The Washington Post, 52% of American respondents say that it is incorrect to think of the country as divided between “haves” and “have-nots”, while only 45% say that it is divided this way. Thus a solid majority of U.S. citizens is turning a blind eye to the facts of its ostensible disenfranchisement.

One reason for this blindness is the effect of institutionalized ambitions. Twelve years ago, Ted Ownby identified the American dreams of unbounded consumption, shared by the poorest black Mississippians. They craved an abundance of freely chosen and perpetually renewed material goods, shared regardless of race, gender, ethnicity, or class. They claimed the right to fashion individual life styles unconstrained by meddlesome standards of their social betters. In the context of such cravings and claims, economic inequality becomes ambivalent. For dedicated consumers, the availability of the 475:1 earnings ratio is a true inspiration. For dissidents nursing spiritual notions, what reason could there be to obsess about it? As our unalienable rights to Life, Liberty, and the pursuit of Happiness vest in the humble toiler, so they do in the rapacious one percenter. To socially responsible entreaties of moderation, the American consumer puts forth an irresistible retort: “Can you let me go to Hell the way I want to?”

The perdurance of American Dreams tends to frame the protests sweeping across our nation as still-born ramblings of discombobulated malcontents. After failing to anticipate the Arab nations moving from stability to turmoil, our beleaguered POTUS is attempting to surf the wave of protests sweeping suddenly across the nation. Yet this is the same Chief Executive who has received more money from Wall Street than any other politician of his generation; who publicly declined to begrudge the bonuses of Wall Street bigwigs; and who now depends on their largesse for a third of his reelection campaign contributions. It is tempting to hope for a politically effective counterpart to the Tea Party emerging from the American Left. Regrettably, this hope will not be realized by the occupiers of Wall Street.