Why do people in the financial sector earn 100 times more than the average neurosurgeon? How is it possible that in 2009 the top 10 bankers earned an average of $900,000 an hour and the top 25 bankers earned as much as 658,000 entry-level teachers — put together? (Source: AlterNet)
Apple Inc. earned about $6 billion in 2009 thanks to 35,000 employees who design and market a vast array of amazing products. Appaloosa, the hedge fund, earned about as much as Apple in 2009 by speculating on… well, we don’t really know. How can a hedge fund that employees only 250 people, produce as much real value speculating on stuff as 35,000 Apple employees?
Then there’s the hedge fund manager who in 2010 made $4 billion dollars and only paid a capital gains tax rather than the higher rate of personal income taxes paid by his secretary.
Why do people who work in finance earn so much money? Because we’ve designed a system that lets them and encourages the rest of us to think it’s perfectly okay. It’s time to put an end to that system and put the real wealth in our country back in the hands of those who are actually creating value and worth.
love it! now write a blog about why women earn 80% of what their male counterparts. US Dept of Labot report 1025 – Highlights of Women’s Earnings in 2009
Good question. I suspect changing the whole system is going to create quite some waves, I take it for granted those who make this kind of money through speculation are not going to appreciate anyone taking their source of wealth away from them without a word. And yet it is the only way to go if we want to ensure a prosperous future for us all.
So true, and why is it that the GOP is attempting to block the efforts in recent, reasonable financial regulatory agency work intended to deter just such issues? Do regular (non-uber-rich) Republicans really foster these policies? If not, it’s time to let our legislators know that we expect them to support financial reform efforts.
I wish they could explain what drives them to extract such immense rent from society and what do they leave for posterity out of their wealth. Any remarkable cities, architecture, science, culture as previous wealthy people did? Will any hedge fund manager give us a Barcelona in the US?
It is very difficult to change the current unsustainable and socially damaging financial wealth accumulation due to several factors:
1. There is no theoretical framework in economics, social studies, politics, etc. which supports the return capital allocation to real wealth creation. Sadly, there is no Max Weber to explain the ethical foundations of the present anglo-saxon capitalism.
2. Work and value are completely disconnected and the majority of people have been convinced to view themselves as consumers not producers. Work itself is being eroded by a system which incentivizes and rewards financial, not real wealth creation.
3. Ignorance and propaganda on all issues of significance to the society, but especially in pursuing a damaging imbalance between individualism and social connection.
4. These people’s mirror neurons are defective and we need to help them bu showing a better model to follow, an empathic one as opposed to their anti-social one.
What should we do about it? It is our responsibility to change the system, for ourselves and for our fellow citizens and for the future generations.
Russell Ackoff, the acclaimed Systems Thinker said, “Ages don’t die, they fade away.”
I think this is true for the system that has created such mind numbing inequalities. As Silvia asks, what should we do about it?
Like anything in life one approach is to control what you can control. Individually we can make a collective difference and eventually this practice will end, but most likely beyond our lifetimes. But that is okay, as at least the journey will have commenced.
A couple of practical suggestions, one for the employee and another for the self-employed/business owner.
Employee
You have talent. Don’t forget it. Choose to work for companies that are worthy of your commitment. Think about what that means. It probably wouldn’t include such companies that practice inequality of pay to the degree descibed by Jeffrey.
Self-employed/business owner
Practice fairness of pay. It’s a simple concept. Pay people for their value in relation to what everyone else in your business gets paid. Including yourself.
So how do we put an end to such a system of concentrated wealth without starving a lot of people first?