The King of the Democratic Socialists, Senator Bernie Sanders, continues to show off his stupid ideas. His latest – capping pay of private companies.
The current salvo is part of Sanders’ “Stop Walmart Act” in which he wants to limit CEO’s pay to 150 times that of a typical employee. Somehow, raising the quality of life for poorest Americans is not sufficient via increases to the minimum wage and work conditions. Sanders is intent on putting the breaks on income inequality by limiting what the top brass earn. So if the average employee made $50,000 per year at a company, the CEO pay would be capped at $7.5 million.
Think about applying the logic to the movie business.
Tom Hanks earned roughly $60 million for his work in Forrest Gump. Taking his pay and dividing by 150 would mean that the average worker for that movie – including hair and makeup, lighting, sound editor, key grip (whatever that means) – would earn $400,000. Needless to say, the average worker on the movie made nowhere near that total. If the average person made $75,000, should Hanks have his pay capped at $11.25 million?
In baseball, Mike Trout earns $33.25 million a year playing for the Angels. The ecosystem in baseball is vast and includes groundskeepers, umpires, gate and parking attendants, people in concessions and advertising and marketing. Does the average person who works in Major league Baseball make $221,667? If they don’t, then Sanders believes that Tout shouldn’t make as much as he does. His perception of fairness trumps the value of his contribution as determined by the free markets.
People can readily appreciate the performances of actors and athletes, and pay money to see them perform. But the management talents of corporate executives is not easy to comprehend or see. A bad CEO could cost a company billions of dollars and thousands of jobs. Their work is not simply to amuse people for a few hours, but has dramatic impact on shareholders, employees and customers.
But for new era of American Socialists, income inequality is inherently evil. As freshman member of Congress Alexandria Ocasio-Cortez said “a system that allows billionaires to exist… is wrong” and “immoral.”
The start of this thinking in the Democratic Party can be traced to 2012, when President Barack Obama made the remark “if you’ve got a business, you didn’t build that.” While there is a kernel of truth to his broader commentary that most businesses are built with many employees and an ecosystem which enables wealth creation, the current alt-left version of that thinking is that ALL people who have a hand in wealth creation inherently deserve a good portion of that wealth. In the example above, Sanders does not only think that a grounds-keeper at a stadium should get a large raise when the baseball players get huge paydays, but Mike Trout’s Little League coach when he was ten years old should also be entitled to some of Trout’s salary.
Senator Elizabeth Warren (D-MA) is another presidential hopeful from the left-wing who is hyper-focused on income inequality. She has proposed forcing large companies to have almost half of the boards of directors be representatives of the employees. Such efforts are meant to curtail the efficiencies and cost-savings which companies like Amazon utilize to pass cost-savings onto consumers, and instead ensure more employees are hired and make more money relative to shareholders and management. The goal is for unskilled labor to get shielded in a world of automation while trimming Jeff Bezos’s wealth; a double win for progressives. For the people who maximized efficiencies and created new companies, not so much.
Big progressive government is trying to launch the biggest takeover ever – of the entirety of the American business community. It promises to be heavy-handed, very intrusive and punitive as it devalues the contribution of those who innovate and lead.
Bernie Sanders proudly adopted one of the mottoes of Forrest Gump, that “mama said there’s only so much fortune a man really needs… and the rest is just for showing off,” as he pushes to pass laws preventing highly skilled people from making “too much” money. In truth, the Democratic Socialist motto is “stupid is as stupid does.”
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