On a Fox TV news broadcast Tucker Carlson noted that the coronavirus shutdowns have crushed huge parts of the economy. “Millions of Americans are out of work. But at least one person has become extremely rich, richer than any man in history. Just yesterday Jeff Bezos made $13 billion in a single day” – from a stock market surge. That’s to be expected, replied Sean Hannity: “People who make money provide goods and services that people need and desire. It’s called freedom, capitalism.”
The on-air exchange illustrates a difference of opinion on the vast gap between the very rich one per cent and the less affluent and struggling ninety-nine per cent, an inequality beyond any other in U.S. history. Today’s top salaries would defy belief even a generation ago. It’s hard to keep track of the climbing salaries, but it looks as if Safra Catz, CEO of Oracle (computer services), is on top, at least until tomorrow, with an annual $103 million.
Current CEO’s make as much as 1000 times what their employees earn, leading to questions of both fairness and good business. Abigail Disney of the founding Disney family raised the issue of Disney CEO Robert Iger’s $65.6 million salary. Surely half of that could be distributed to employees, she advised, without harming the company. Iger took the hint. He settled for a more modest $47.5million.
Today’s CEO’s are worth it, claims an article in Time magazine. There’s a blossoming of innovative firms with a global reach that needs leaders to match. Would that include Dennis Muilenberg, CEO of Boeing, who presided over the launching of the poorly designed 737 Max aircraft that resulted in two crashes and the loss of 346 lives? Families of the victims were outraged that he was removed from his job but left with a tidy $30 million in compensation.
Economic inequality leads to political inequality, supposedly the antithesis of democracy. In its wisdom the U.S. Supreme Court has decreed that money is the equivalent of speech to be used as freely as words in politics. But a greater amount of money buys a greater number of words in political campaigns and also buys more influence with candidates. An example is billionaire Sheldon Adelson, President Trump’s biggest donor, who insisted on a U.S. withdrawal from an agreement with Iran that limited its nuclear activities and offered relief from economic sanctions. Trump obliged, adding more sanctions alongside.
Billionaire Gorge Soros adroitly shifted his funding from national politics to local, putting $52 million into races for sheriff, mayor or district attorney in various parts of the country. Some of his successful candidates then implemented his radical policies that abetted or ignored the rioting in targeted cities.
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The so-called Gilded Age in the late 1800’s was also a time of great inequality, though not as extensive as today’s. Labor strife, a struggle among classes led to the Populist and Progressive reform movements and notable leaders like William Jennings Bryan and Teddy Roosevelt, later U.S. President. Inequality was reduced by opening up the political system and providing more help for working people.
Today’s one per cent have managed to avoid serious challenge because their potential opposition is divided on issues involving race and social change. They are thus distracted from the most important cause of all. So the one per cent rest content and if anything, inequality increases.
Great article, Ed! It’s is so sad that Americans who are the most hurt, support the system. I read comments about billionaires like Bezos that say: “Why not, it is their money.” “Their” money if exploitation is acceptable. It seems in this country it is. Any kind of social support system is anathema, “communism.” Now, as I understand, they want to dismantle SS and Medicare. Do these wealthy and presumably educated people – understand that when they suck out everything, there will be nothing left for them to feed on?
I think your last graph needs some elaboration. “The potential opposition is distracted” needs some examples to support the conclusion.