U.S. journalists, economists, an political figures rarely express indignation about the super-high incomes of anyone except corporate executives. Scarcely anyone professes outrage about Forbes list of the twenty best-paid actors, who average $23 million apiece in 2005. U.S. business magazines and newspapers do not even bother with annual surveys of the incomes of the best-paid trial lawyers, TV news anchors, executives of private companies, investment bankers or portfolio managers.
New York magazine’s 2004 survey of local talent managed to turn up three famous hedge-fund managers who earned between $540 million and $1.02 billion in 2004. Those huge incomes were in no sense “distributed” at the expense of ordinary workers. They were earned from fees willingly paid by affluent and sophisticated investors (hedge-fund managers usually keep 20 percent of profits they earn for investors). The Irish rock group U-2 grossed $260 million from concerts alone in 2005, but that was from tickets willingly paid by Bono fans. Readers of Parade magazine were supposed to be amused rather than outraged that rapper Sean “P. Diddy” Combs earned $36 million in 2005 while radio talker Howard Stern got by on a mere $31 million. … there is no reason to believe that if Combs and Stern had been paid millions less their loss would have somehow benefited those with lower incomes (including most of their fans).
Many people share a voyeuristic fascination with what other people earn yet regard it as none of their business –except when discussing corporate executives.
From Income and Wealth by Alan Reynolds
HKO comment: the author’s critical comment is the extent that high corporate compensation is deemed to come out of some other peoples’ pockets while celebrity salaries are not. I do believe that many corporate salaries are excessive and on average not indicative of shareholder success. Buffet, Jobs and Gates of Berkshire, Apple and Microsoft became very wealthy because of their long term commitment and ownership of the shares of their company and few of their fellow shareholders hold any hostility to their wealth. Many corporate executives, on the other hand, benefit from short term events outside their control that are too often mistakenly attributed to their talent. The bigger problem with corporate bonuses is not that they are too high, but that they are too tied to short term ‘performance’ that is often mistakenly attributed to talent.
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