A Stitch in Haste

To review: Regardless of what one thinks of the propriety of the government blocking strictly private employment contracts between competent consenting adults at the lower end of the work spectrum (i.e., minimum wage laws), the arguments for such incursions upon freedom of contract have exactly zero relevance to the upper end of the work spectrum. Stated differently, malcontents need an alternative rationalization for their disturbed voyeurism regarding "excessive" executive compensation ("Excessive"? To whom? By what standard?)

For some among the hubris class, the the latest fashionable rationalization is the fiction of "rising income inequality." (A fiction, as I explained recently, because income percentiles are not constant over time -- today's "top 1%" are neither yesterday's "top 1%" nor tomorrow's "top 1%," and likewise for the "bottom 20%.")

Others are less creative and just flat out claim the prerogative to subject all transactions to mob veto because -- well, because it's the mob:

Net income at Office Depot fell 23 percent last year compared with 2006; its share price fell 64 percent. Steve Odland, its chief, made nearly $18 million all told -- some 85 percent more than in 2006. With the share price of Toll Brothers, the luxury home builder, plummeting, it seems reasonable that Robert Toll, its chief, got no bonus. Still, the company took steps to ensure that he gets one this year, even if home-building doesn't recover.

It's hard to square the conceit that chief executives are rewarded for improving companies' performance with the fact that chiefs at 10 financial-services firms in the study made $320 million last year, even as their banks reported mortgage-related losses of $55 billion.

Of course, it's only "hard to square the conceit" of what other people make when you try to square it in the first place. And you only try to square it when you suffer from some ignoble mixture of envy and schadenfreude. It's one thing to feel compassion for the less fortunate; it's another thing altogether to loathe the more fortunate.

It's quite simple really: If you are uncomfortable or indignant about what the CEOs of Office Depot and Toll Brothers are paid, then don't invest in Office Depot or Toll Brothers. Don't work there. Don't shop there. But don't project your fiscal sociopathy onto others and pretend that you're not the one with an pathological fixation on something that is, literally, none of your business.

More:

In any case, the combination of inexorable income growth at the very apex of society and stagnation everywhere else can serve no public good.

The Bush administration has focused its economic policies on cutting taxes for the very richest Americans. Taxation needs urgently to become more progressive. If the United States is to continue to embrace globalization, technological innovation and other forces that contribute to economic growth, it has to share the spoils better.

One wonders how to say this any more remedially: Private contracts do not need to serve a "public good." Person A paying, out of his own pocket, Person B a sum that Person C happens thinks is "too high" is not an "externality," and Person C has no right, either alone or ganging up with his neighbors, to block or punish that transaction.

The rest is just flat-out lying: The Bush tax cuts did not benefit "the rich" at the expense of "the poor" and the federal income tax is already obscenely progressive. The data are what they are; wishing they were "oppressive" does not make them so.

(One might also note -- since the Times can't be bothered -- that Internal Revenue Code Section 162(m) already disallows the deduction of salaries above $1 million as a business expense for publicly traded corporations -- a figure which, to the best of my knowledge, has never been adjusted for inflation. Such salaries are therefore double-taxed much as corporate dividends are double-taxed. At some point "punitive" tax policy -- which is abhorrent enough -- becomes downright sadistic tax policy. Except to the Times -- for which too much bloodsucking is never enough.

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I find it laughably ironic, incidentally, that someone at the Times chose the headline "Corporate Croesus" for this silly editorial. For those not in the know:

Croesus consulted the oracle of Delphi in Greece. The oracle replied: "If Croesus goes to war he will destroy a great empire." So Croesus went out to meet the army of Cyrus and was utterly defeated, he destroyed his own great empire.

Leave it to the Times not to understand the difference between capitalism and warfare, between an entrepreneur and an emperor, between selling and plundering, between the civility of private contracts and the barbarism of mob rule.

More:

The old story goes on to relate that Cyrus ordered Croesus to be burned alive. When Croesus saw the flames creeping upward to consume him, he remembered the words of the wise Solon and cried out, "O Solon! Solon! Solon!" Supposedly Cyrus was so moved by the story of how Solon had warned the proud king that he ordered Croesus to be released. Cyrus asked to Croesus why he shouted Solon's name, and Croesus asked him another question "what your soldiers are doing now?", showing the Persian soldiers taking all the treasures and destroying everything; Cyrus replied "They are plundering your city"; then Croesus said "They are not plundering my city, it's your city now and your soldiers are destroying your city". After that short conversation Cyrus the Great stopped his soldiers.

The worst thing that can ever happen to an advocate of central planning is to actually become a central planner. For when they do, then learn the hard way that there is indeed a difference between building a business and seizing it, between running a firm and controlling it, between making something and stealing something.