“But isn’t that . . . ‘Socialism’??”
He who frames the question wins the debate.
I’ve been struck in recent months, talking to various people about the economy, by two things:
One. The generally limited vocabulary people have when it comes to understanding all things financial — even people who are otherwise very sophisticated, well-educated, etc.; and
Two. The tendency — again, amongst otherwise sophisticated people — to somehow equate outrage about Wall Street misconduct and calls for genuine, structural reform with a “fringe” political agenda.
The “S Word”
So, what do you call someone who thinks:
–Hedge fund managers should pay a higher tax rate than teachers or firemen? (They don’t; thanks to an especially sleazy tax break, their compensation — called “carried interest” — is taxed at 15%).
–CEO’s shouldn’t make literally *400 times what the janitor makes — up from the 30x-40x that prevailed for almost half a century (roughly from the ’30’s to the ’80’s).
–Having half a dozen monster financial institutions — whose balance sheets can literally be measured as a % of U.S. GDP — is bad for our economy and political system.
Apparently . . . . “a socialist.”
Sorry, folks, but we already have a socialist economy.
Except that it’s socialism at the very top . . . and capitalism for everyone else.
*The 400 times is merely an estimate; the truth is, no one really knows, because executive compensation disclosure rules are exceptionally murky and porous.
It’s also the case that CEO compensation is not set by the market; it’s determined by captive boards of directors — which is to say, the CEO’s themselves.