October 21st, 2004

elongate politburo messianic strife

Why I'm no longer a Libertarian, part 83

Rant time.

This article is an excellent summary of how runaway executive compensation and stagnating middle-class jobs are widening the class divide in America, and the toxic effects this is having on our society. Sample statistics:
Executives' salaries aren't to blame for this—bloated as they are, they still generally constitute only a tiny fraction of major companies' revenues—but they are a symptom of the larger trend. According to the Congressional Budget Office, between 1979 and 1997 the richest 1% of American families—those who had an annual income of at least $677,900 in '97—saw their incomes more than double. But for families in the middle, income grew by only 10%. For the lowest 20%, it actually fell.

Especially illuminating is how executive compensation has leapt onto a vicious upward spiral. In short, increased recruitment of executives has led to the increased use of consultants who try to give salary offers based on the industry average plus a few deal sweeteners (since who wants to pay less than the average?) -- which drags the average up, which then gets factored back into the calculations when the next round of management changes rolls around.

Libertarians, broadly speaking, favor decreased regulation on businesses and less government intervention in market forces setting the fair price for goods, services, and labor. But the problem here is that it's market forces that are creating the problem. Boards, acting in their own self-interests, drive up executive wages; executives, acting in their own self-interests, hold out for higher wages. Shareholders would normally be acting in their own self-interests by exerting a counterforce holding these expenses down ... but, um, considering the vast number of stock options thrown into these deals, who exactly are these shareholders and what are their interests?

The 1,100,000 Washington households that makes less than $46,000 a year probably collectively own less stock than the one man who is chairman of its flagship corporation Microsoft. Meanwhile, a great number of those million-plus households can't even afford health insurance (45 million Americans go without). Gods forbid their primary income provider(s) get in a car accident.

Now, it might be the case that market forces can also solve the problem of the widening class divide. But I don't see an answer being suggested. Even the Libertarians who get beyond "I don't get it. Why is having a handful of ludicrously rich people a problem for America?*" generally smile and say "The market can fix it" and then ignore the problem entirely as if those words were the magic incantation that made the market start fixing it. (Or, worse, blame the poor and middle class for not putting more economic pressure on the corporations to change their policies. Look, folks, popular apathy is just about the only glue holding our society together. When the proletariat bands together and decides to put pressure on their bourgeoisie ... there's a word for it, and it starts with R and ends with evolution.)

I've heard a few market-based, non-government solutions that could conceivably have a positive effect. For example, voluntary regulation or industry-set salary caps. I'd be quite willing to give these a try, seeing as how they're better than nothing, but nobody is seriously advocating them. Show me one Libertarian, even one, who considers income inequality a major political issue and feels it's among the top issues that society must address before it spirals out of control.

No, really. Please show me one. I want my respect for the party back.

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* Because power corrupts, dumbass, and the concentration of power further corrupts. Think for a second about the entire POINT of a limited-government stance. I'll give you a hint: You ... want ... to ... prevent ... the ... accumulation ... of ... power. Classical liberalism is a very populist philosophy.
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odd baud skins (pic by Waywind)

Random thought

Something that occurred to me after seeing an odd license plate on my way to work.

Here in California, the standard -- non-customized -- license plate for cars consists of one digit, three letters, and three digits. A string like 1ABC123.

After Sept. 11, 2001, what did the states do with plates like 4OBL911?

That string of characters was meaningless before the terror attack. It was probably even on someone's car. But afterward, you can probably guess (especially if you think about the acronym for a moment) that it, and a number of other similar plates, could be found terribly offensive.

Do agencies have some sort of recall provision for random plates that through odd circumstance become controversial?

N.b.: I envy the lucky person randomly assigned the plate 1AML337.
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