I was actually intending to do a more thoughtful post inspired by this, (or maybe a more sarcastic one inspired by this), but, as I scanned over the NYT website, I actually gawked–out loud–in disbelief as I read this:
President Bush took aim Wednesday at lavish salaries and bonuses for corporate executives, standing on Wall Street to issue a sharp warning for corporate boards to “step up to their responsibilities” and tie compensation packages to performance.
…The president acknowledged people’s continuing nervousness about their financial picture, despite a string of similar reports that provide some reason for optimism. He said some workers are being left behind in the booming economy and the disparity between the rich and the poor is growing.
“The fact is that income inequality is real. It has been rising for more than 25 years,” the president said. “The earnings gap is now twice as wide as it was in 1980,” Bush said, adding that more education and training can lift peoples’ salaries.
…In his address, Bush said he realized that stories about the enormous salaries and other perks for CEOs, for instance, create anger and uncertainty that affect the country’s investors.
under the American tax system as designed by the Bush administration and congressional Republicans, the most a person of vast wealth is expected to contribute to the commonweal from his or her last dollar of investment profits is the same 15 cents or so that a minimum-wage worker is expected to pay on his or her first dollar. This does not mean that we have a flat tax. We have a tax system of vast complexity, with wildly different tax burdens on different people. But we have a tax system that, on balance, knows who’s in charge.
“Government should not decide the compensation for America’s corporate executives,” [Bush] said.
I guess its enough to rewrite the tax code to increase the incentives on such massive executive compensation packages based on stock options. As Paul Krugman explained it:
The 2003 tax cut delivers a somewhat smaller share to the top 1 percent, 29.1 percent, but within that concentrates its benefits on the really, really rich. Families with incomes over $1 million a year — a mere 0.13 percent of the population — will receive 17.3 percent of this year’s tax cut, more than the total received by the bottom 70 percent of American families. Indeed, the 2003 tax cut has already proved a major boon to some of America’s wealthiest people: corporations in which executives or a single family hold a large fraction of stocks are suddenly paying much bigger dividends, which are now taxed at only 15 percent no matter how high the income of their recipient.
Just in case you thought the world was about to end–
Still, even Bush’s words on pay were met with complete silence from the business crowd he addressed.