Executive pay fact of the day

…while overly generous executive pay may be maddening, it is a drop in the bucket compared to the size of these companies and the impact it has on shareholder prices and employee compensation.  The top 50 companies alone have a market capitalization approaching $5 trillion.  Limiting CEO pay, as some neopopulists propose would have little to no impact on overall wages or compensation.  If every penny of the $14.4 billion earned by the "fortunate 2500" were distributed to all workers, it would amount to only $100 apiece.

That is from The New Rules Economy, a "Third Way" Project, and full of remarkable common sense.  Or try this bit:

Corporate profits as a share of both corporate net income and as a share of national income were higher in the 1940s and 1960s.  But that, admittedly, is splitting hairs.  What they don’t highlight is that in 2001, corporate profits were at one of their lowest points in recent history.

The neat trick is that the authors invert the usual right- vs. left-wing take on living standards: "Yes, living standards are way up, that means we have lots of money to spend on creative social programs."  It will make some people want to say "Whoa….living standards aren’t up that much…"


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