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Will the Congressionally Abetted Plundering of America Continue? Paul Krugman Rightly Observes "Now That's Rich"

By Andis Kaulins

Paul Krugman in Now That?s Rich at the New York Times rightly roasts Congress for even considering an extension of the disastrous Bush tax cuts past 2010.

As Krugman rightly observes, the same politicians who are pinching pennies for the mass of Americans:

"[A]re eager to cut checks averaging $3 million each to the richest 120,000 people in the country....

No, this has nothing to do with sound economic policy. Instead, as I said, it?s about a dysfunctional and corrupt political culture, in which Congress won?t take action to revive the economy, pleads poverty when it comes to protecting the jobs of schoolteachers and firefighters, but declares cost no object when it comes to sparing the already wealthy even the slightest financial inconvenience."

There are a lot of people who still erroneously think that plundering America's wealth is OK, but being asked to put back their corresponding share into the economy is not their responsibility.

Since it is not in the nature of human nature for people to give up anything voluntarily, the only real solution for America's egregious inequality of income is probably only strong, willful inflation, combined with the printing of a lot of cash by the government, to be distributed sensibly to the have-nots. In this manner, the imbalance of wealth can be reduced and some redistribution of wealth can be achieved without resorting to the political fireball of personal income tax increases.

As a matter of system correction, the correct solution is to have laws which limit inequality of compensation. For 40 hours of work, no matter what a man does, no company executive should be able to earn more than 10 times more than what the lowest man on the scale -- also working 40 hours per week -- earns at his company. That would set things right and would force the executives of companies to adopt fairer systems of compensation for all.

Currently that is not the case. As we wrote previously at LawPundit in Economic Recovery & Executive Earnings Salaries Bonuses and Compensation: Establishing Sensible Legal Guidelines for the Distribution of Remuneration:

"In the United States executive salaries have been spiraling upward since 1970, the beginning of the oil-cartel induced price-push inflation spiral. Indeed, Gabaix and Landler discovered that from 1980 to 2003 market capitalization of companies in the U.S. had increased six-fold and that executive compensation had kept pace with that, as opposed to normal salaries which only kept pace with the actual economic growth of ca. 2.5 % a year."

Putting it simply, if you are an average American employee, the company heads are ripping you off royally, abetted by the U.S. Congress and a number of previous American Presidents.

Full post as published by LawPundit on August 24, 2010 (boomark / email).