Unsolicited Punditry #2

Earning Money the Old Fashioned Way

The Sunday morning news shows prattle on about the AIG bonuses today and the proposed 90% redacto tax that congress is looking to file on them. I started thinking about these events going on about the Congress voting, knowingly, deliberately trying to "game" the Constitution and finding a loophole in which to violate it.

Then I had a conversation with someone that started me considering the question of how does one actually "earn" their wages? What entitles someone to the pay they get? I realized quickly that this is not an easily determined question and is highly subject to opinion, conjecture and personal involvement. So how can government, or even individual citizens say, with a straight face that someone has actually "earned" his living? I don't think they should be allowed to continue with these statements unchallenged anymore.

There is a serious flaw in the argument that someone does or does not earn a wage. The best way that I can concieve to illustrate it is to ask them what they do for a living and why they actually DO earn their wage. Most people when confronted with how much pay they are recieving from their employer is that they are underpaid for the amount of work they put in. Almost everyone believes that they are worth more than what they are paid for their time and effort. This is the foundation of the flaw in the argument. Nobody, except for a small few, believe they do not deserve higher pay.

Now, when you look at the situation of someone ELSE'S pay, often the statement is that they are overpaid. This sentiment is usually shared by everyone who is underpaid or a congenial busybody, concerned more with what's going on in other people's lives than their own. They discount, by near reflex, duties of the job as not worthy of pay, when they themselves would count the effort as needing even more pay if they were doing the job. This requires a certain level of intellectual dishonesty and/or a lack of self awareness. Unfortunately, these diseases are totally rampant in today's society as well as highly difficult to cure because the process is painful and often transformative.

So, here we are, stuck between those who believe they deserve more when they are doing it, but everyone else deserves less if they do a job. But the complications do not end there. We must also look at the entrepreneur who's arbiter of pay is not based on what an employer pays based on the negotiating prowess of the employee, what the competition is paying and market pressures. No, the self-made businessman's only arbiter of earnings is his own personal greed and success of business versus what the market is willing to pay for his services. In some regard this is the case for all employees, it is just more evident in the case of an entrepreneur because the market is much more visible.

If a product is overpriced, people will buy it less or not at all, directly affecting the bottom line. The owner may decide to turn down his current profits from the work he does for future, larger gains. Growing his business over growing his own wallet. Where the issue becomes almost a monstrous joke is when a company becomes SO successful, that the profits cannot be helped but be considered extreme due to the relative scale compared to other businesses. Most people cannot relate or even sympathize with a business owner that is suddenly faced with tens or even hundreds of millions of dollars in profit due to it's sudden popularity or success. Now, the money's there, goods and services have been traded fairly on the open market, and his business has EARNED them. Then in come the jealous saying... but does he really DESERVE them? Yet often, if this level of growth occurred over an extended period of time, the question would nary come to the fore. People think that it is only "natural". Sudden change seems to be a major catalyst in this level of jealousy.

But flip the argument and put the person who questions the justification of keeping earnings in the same position, a vast, vast, vast super-duper majority of them would say yes! I made the company, I own it, I deserve it. It's only "fair" after all I should profit from my hard work. Of course, this requires a level of intellectual honesty that is rapidly failing in this society at large. It gets back to the general hypocrisy of "I deserve it but they do not" for the same job; and unless that basic hypocrisy is expunged, you can never win the discussion.

With corporations, this is a much harder path to follow, but a similar one none the less. You have shareholders to consider as well. Hence why, till the Clinton Administration, you could compensate your executives with massive salaries and perks to keep them, and make sure you had the best and brightest running your company. Talent costs. And talent that can run a massive global corporation costs much more than most poeple can concieve. These people make decisions that affect thousands, if not millions of lives. One signature can make or break whole economies. It's the law of scale in action. Yet now, thanks to the perception that large salaries are not deserved, companies must find other ways to compensate fairly for the talent they hire. When wage and price controls were enacted by FDR, we suddenly had the creation of "benefits" like paid, health insurance, vacation time, perks like cars and homes. It was the only way to retain the people who could do and had done so well, even in times of crisis. Today, it's stock options and outright "performance" bonuses.

Unfortunately, we have government interference in executive pay in the form of wage controls that is considered to be ineffective. They were all negotiated and both sides agreed (Board of Directors and potential executive) that they were fair. This is the capitalist system at it's finest. You want how much? This is what we want to pay. You and I negotiate to X amount and find it agreeable. It's only the monday morning quarterbacks, busibodies and the jealous who complain and lobby government to stop others from getting what they deserve or negotiate for. Harming the earnings of others is never a recipe for personal satisfaction (unless you are particularly sociopatic or malicious) or incentive to keep those who have skills others will pay the massive salaries for that you cannot control.

Now, the politicians and society at large are trying to use shame and austerity as the new values to force people, personally (sometimes also through threats of death and violence) refuse taking what they worked so hard to earn. Intimidation is a horrible weapon to aim at common citizens for doing what they can for their family and personal life. Working hard and being rewarded fairly. Now yes, there can be times of unfair compensation, but of what harm is it to the public unless it is a service they are all forced to use, or a product they cannot avoid? It is a company's fault for bad negotiation, or failure to factor in changes that could adversely affect them in the public sector of opinion or to their bottom line.

So, here we sit. Those who can't are not only criticizing, but attempting to insert themselves into the equation to STEAL from those who can, and have, and are contractually owed for their work. The politicians, who many knew well in advance, of AIG bonuses being contractual obligations, are having a tantrum and furor over something they should have no problem with or should have taken into account before public money became involved. Yes, the government now owns 80% of the company, but it is still illegal to go back and take from those people what is owed them and was negotiated out. It is in fact a direct violation of the Constitution for them to do so. The matter that it is also not the Constitutionally mandated business of the government doesn't seem to even enter into their thoughts. I leave that aspect for a future column.

But no, their political dander is up in an effort to redistribute wealth from those who deserve to those who do not. Their clarion call is one of "Fairness" and "Equality" and "Earned Wages". They are so blind to their lust for riches and power, that they cannot see that they are the ones being unequal and unfair, and the people they wish to give the money back to (which they never will to begin with) do not deserve it either. What makes matters worse is that the overall tenor of the government is that it has become one vast charitable organization, backed with guns and law requiring you to participate and be complicit with it's desires. A far cry from the original intent of the Constitution.

These are the words of those who wish to end a nation where we are all free to pursue, life, liberty and happiness. No, we enslave ourselves to the opinion of others who through some arbitrary and nebulous personal formula decide for themselves when we've had enough life, liberty and happiness.

The mob is trying to rule, and unless stopped, we all will suffer.