Confederate Sharpshooter

Like almost everyone else in the free world, I spent last night enjoying the company of friends and family watching the Super Bowl on TV. Great game, even though I’m not a football fan- I just show up for the food and conversation. This year, as you might expect, a lot of that conversation centered on the economy, jobs, and what needs to be done. The group of friends I was with would be considered extremely conservative, religious, and ‘right wing’ by any member of the current media. Yet, during the pre-game conversation, the talk turned to the recent Wall Street bailout and in particular some of the salaries of the executives of the affected companies. Most of the remarks were the expected ones, but to my surprise there was widespread agreement when it came to passing laws and controls on what people could be paid for doing work. Specifically, what a Wall Street Executive, say, the guy who runs Acme Investments, should make. My fellow arm-chair quarterbacks were all in favor of passing laws against anyone on Wall Street making ‘a million dollars a year.’ One person opined that they shouldn’t be making more than the president, since anyone who had control of the nuclear button had a lot more responsibility than a glorified banker. So, nobody in the US should ever make more than $400,000 per year. Also, nobody needs to make that kind of money.
I said very little at the time, I came to watch the game and eat, not get into a heated political argument. But the point bears scrutiny, as it demonstrates the lack of depth most people apply to issues of great importance. I expect that given a quiet setting, and some time, most of these educated, in some cases professional, men and women could be persuaded into seeing the flaws in the argument they were so passionately extolling over chips and dip. But most people do not get around to doing that, and the majority now give some brief thought as to who to vote for a week or three prior to the election, and then forget it for another 4 years. This needs to change, and we- true conservatives- need to get to work at educating and correcting everyone who lets this sort of thing go unchallenged.
Free markets regulate themselves. That is how they work. Every time you stick the heavy hand of government into the mix, you screw up that regulation, with sometimes disastrous results. It might fix a temporary problem or make you feel better in the short term, but sooner or later it will snowball into something terrible. No, I don’t think some of these high-paid executives are worth the obscene amounts of money they are paid. (I don’t have to go to New York to see that kind of money, either- every city, county, and state has a share of ultra-rich folks, if you know where to look.) But I cringe with fear any time I hear someone voice the opinion that a government- any government- should do something about it. Who do you think owns those companies? Most are publicly traded, and if you own insurance, have an IRA, or have an investment anywhere you could probably do something about things at the next meeting. But I would advise that you don’t. Why? Well, you do want the IRA to gain value, right? The insurance to be worth something? Then you need to have someone running the company that knows what the devil they are doing, and unfortunately people like that are in short supply, and command strong salaries. Let’s face it, if Acme Investments could hire Wile E. Coyote to run the business and expect it to prosper, they would, and save a few million bucks on salaries. But they don’t, because they’ve seen what happens to Wile E. Coyote when he gets near the Acme products. So the stockholders pony up the bucks and hire someone who will get the job done, and by golly if he doesn’t he’s out the door in short order, with the few exceptions of CEO’s that are bright enough to fool the stockholders while they rob the place blind. Those companies are not around long, which is the other end of self regulation. Contrast this with government control, where this year we tell the CEO he can’t make more money than looks good for the cameras. CEO promptly does so, and either gets the money elsewhere, as a stock option for instance, or he finds work in a sector that allows him or her to make the money he deserves. As the saying goes, you generally get what you pay for. The Clinton administration attempted to levy a tax on any CEO that grossed more than $1 million to the tune of a 100% tax. Guess how much they collected? Right- zero, zilch, nada. Nobody is going to work when it all goes to taxes. The affected parties simply reduced the salary they were paid and took it elsewhere as noted above. But it did look good for the cameras.
We are constantly told the minimum wage needs to be raised, and the top earners need to get less. This will not work. Wages are paid from profit earned by a company providing goods and services to the public. When these wages are artificially raised, or lowered, it affects the ability of these companies to provide those goods and services. Simply put, if you raise the minimum wage to $100 per hour, you won’t have a bunch of happy burger flippers and waitresses. You will have a bunch of unemployed burger flippers and waitresses, since few of us can afford $500 burgers or $1,000 lunches. Change that amount to $7 per hour, or $10, or $15, the effect is still the same. It doesn’t matter if we are talking about selling newspapers on the corner or General Motors- the products sold have to reflect the wages paid to workers, or the company will lose money and be forced to close, and minimum wage doesn’t count when you are unemployed. It holds true for the other end of the economic spectrum as well: if you don’t pay top dollar for your CEO, you get Wile E. Coyote running the Acme Inc. And we all know what happens then. Government regulation, with very few exceptions, causes far more problems than it ever solves. So, please, think carefully and remember that having the people who cause problems (The Feds) are the last people to ask for help when trying to solve a problem, especially one that involves money.