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.
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