Disney heiress slams CEO pay, says 'Jesus Christ himself isn't worth 500 times' worker salaries

[JHB]

5. Once upon a time, we had mechanisms that worked against shooting money skyward

https://www.nytimes.com/2017/09/05/opinion/rich-getting-richer-taxes.html

A half-century ago, a top automobile executive named George Romney — yes, Mitt’s father — turned down several big annual bonuses. He did so, he told his company’s board, because he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today).

He worried that “the temptations of success” could distract people from more important matters, as he said to a biographer, T. George Harris. This belief seems to have stemmed from both Romney’s Mormon faith and a culture of financial restraint that was once commonplace in this country.

Romney didn’t try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month.

The old culture of restraint had multiple causes, but one of them was the tax code. When Romney was saying no to bonuses, the top marginal tax rate was 91 percent. Even if he had accepted the bonuses, he would have kept only a sliver of them.

We used to change the incentives, making it less attractive for those already in the economic stratosphere to grab every last buck they could. Some still did, but they were farther out on the end of the bell curve. Then these mechanisms were recast as "punishing success", and now maximizing profit -- shooting money skyward, as much as possible, as fast as possible, as high as possible -- is treated as the highest economic virtue.