Home > conservative, economics > Enough with the “economic inequality” nonsense.

Enough with the “economic inequality” nonsense.

Sean, All the King's Men Premiere

Nobody complains about my wealth

Is anyone else tired of the incessant whining about the “wealthy,” or the “top 1%?”  Or how the “rich are getting richer while the poor are getting poorer” nonsense (not true by the way)?  Being that they’ve failed in every conceivable way to improve the economy since taking control of, well, everything in 2008, the liberals have made the alleged “growing economic disparity between rich and poor” argument their primary focus for 2012.  Some guy named Peter Whoriskey did a nice job of distilling the left’s obsession with the wealthy down to its basic components in a Washington Post article this past Saturday (although I don’t think he intended my conclusion).

Whoriskey uses Dean Foods as an example of the alleged problem with skyrocketing executive salaries.  In the 1970’s, Dean Foods CEO Kenneth Douglas never earned more than $1 million (in today’s dollars).  Dean Foods current CEO, Gregg Engles, on the other hand, earns about 10 times that amount.  Of course, as the article rightfully points out, Dean Foods also currently earns more than 10 times it did in the 1970’s (from $9.8 million in 1979 to $228 million in 2009).  It also employs just shy of 26,000 workers.

The overarching point of Whoriskey’s article is a simple one: rich executives are greedy jerks, and they should be disliked because of it.  Simply put, the author uses six pages of space in a national newspaper to offer the suggestion that wealthy executives make too much money.

‘Do people bitch because Engles makes so much?  Yeah.  But there’s nothing you can do about it,’ said Bob Goad, 61, a burly former high school wrestler who is a pasteurizer at a Dean Foods plant in Harvard, Ill., and runs an auction business on the side to supplement his income.  ‘These companies have the idea that the only people that matter to the company are those at the top.’

Co-worker Ray Kavanaugh provides a different opinion:

‘You’re king of the hill, and you get paid for that’…’He’s worth it if he keeps the company making money.’

The differences in perspective are instructive.  Those that criticize Mr. Engles’s salary, like Mr. Goad, seem to believe that running a multi-billion dollar company like Dean Foods is easy.  To those like him I say, if you’re unhappy, why don’t you go start your own company?  Or acquire the skills necessary to be the CEO of your employer?  See, this is where the left has successfully deployed class warfare.  I don’t know anything about Mr. Goad, other than what’s set forth in the article.  If I had to guess though, he has a high school education, and is doing a job that any number of people could do.  Are any of these things bad?  Of course not.  I’m sure Mr. Engles would be the first to say that Dean Foods needs more pasteurizers than CEO’s.  Here’s the point though: the market dictates how much both Mr. Goad and Mr. Engles are worth to their company, and Mr. Goad has little legitimate reason to complain.  Mr. Kavanaugh, on the other hand, understands this simple point that is lost on so many.

The author moves closer to his ultimate point by harkening back to better days, when executives worked for the love of the their job and employees, and not the money.

‘[Mr. Douglas] believed the reward went to the shareholders, not to any one man,’ said John P. Frazee, another former board member.  ‘Today we get cults of personality around the CEO, but then there was not a cult of personality.’

[…]

‘People back then thought enough was enough,’ said Ron Smith, 63, who maintains the machines at the plant.’

Both Mr. Frazee and Mr. Smith have come to the arbitrary determination that their current CEO earns too much.  Neither offers any suggestions as to what constitutes “enough” or how one determines what is “too much,” however.  I was just a baby back then, but I’m willing to bet that the “I hate my boss and he earns too much” theory didn’t originate in the last couple of decades, though.

The point of this post is not to defend the salaries of the super-rich.  I don’t care how much Mr. Engles makes, anymore than I care how much Alex Rodriguez or Sean Penn make.  They all earn what people are willing to pay them.  My point is this: once you start complaining about a group earning “too much” or “too little,” you are implicitly advocating for some sort of mechanism that arbitrarily sets salaries.  Somewhere, someone will be deciding what’s “fair.”  One less direct suggestion that is making the rounds is taxing the crap out of the rich, and then re-distributing the money to the less affluent via government programs.

As you can probably tell, I find the demagoguing of the ultra-wealthy to be an important issue.  Simply put, Mr. Engles earns his salary, just like Mr. Goad presumably earns his.  No one is guaranteed economic equality, as if it’s some sort of right, and to take the stance that we all have the right to a good-paying job isn’t just juvenile, it’s dangerous.  Need examples?  See the Soviet Union, Cuba, and North Korea.

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