Marie Cocco: Free Market Madness

[marmar]

from Truthdig:


Free Market Madness


Posted on Aug 30, 2007
By Marie Cocco

WASHINGTON—With Labor Day approaching, it must not go unnoticed that Angelo Mozilo, chief executive of Countrywide Financial—the company that has helped drive world markets into turmoil with its lending—raked in $42.9 million last year. The Nobel laureate Harold Varmus, chief executive of the Memorial Sloan-Kettering Cancer Center, was paid $2.5 million.

Roughly speaking, here is what their relative compensation means: We now value the contributions of someone who has left homeowners frantic about whether they will be able to keep a roof over their heads about (BEG ITAL)18 times(END ITAL) as much as we do those of a brilliant scientist whose groundbreaking research on the genetic basis for cancer could save millions of lives.

Yet what new mother, dreamily rocking her infant, wishes that her child one day will grow up to invent a convoluted mortgage instrument?

We’ve known for years that executive pay is obscenely out of whack with the earnings of today’s workers. The current ratio, according to public data analyzed by the Institute for Policy Studies, is that CEO pay among the chieftains of Fortune 500 companies is about 364 times the pay of an average worker. The data, drawn from an Associated Press survey of executive pay, do not reflect the latest Census Bureau finding that earnings of men and women who work full time dropped by about 1 percent last year. It’s the third consecutive year that earnings have dropped, the government says.

Here is another way to measure the madness: If you count only the value of “perks”—private jets used for personal travel, reimbursement of country club fees and commuting expenses, even company payment of taxes owed on bonus income—a minimum-wage earner would have to work for 36 years to earn the equivalent of what corporate chiefs averaged just in perks last year, according to the IPS, a liberal-leaning economic research group.

Whatever populist urge arises from these juxtapositions is lost, oddly, in what sometimes seems to be boredom with the truth. The level of inequality in our society is at a high point in contemporary American history, a new “Gilded Age” is upon us and, according to conventional thought, there just isn’t much to be done about it. The legislative fixes that from time to time arise—limiting egregious tax loopholes for hedge-fund managers, capping the amount that can be put away in increasingly robust, tax-deferred retirement accounts for top executives—are nip-and-tuck tactics. They won’t change the overall contour of a business culture run amok. .....(more)

The complete piece is at: http://www.truthdig.com/report/item/20070830_free_market_madness/