Letter From Washington: As U.S. rich-poor gap grows, so does public outcry - Americas - International Herald Tribune (original) (raw)
Americas|Letter From Washington: As U.S. rich-poor gap grows, so does public outcry - Americas - International Herald Tribune
https://www.nytimes.com/2007/02/18/world/americas/18iht-letter.4637416.html
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- Feb. 18, 2007
WASHINGTON — There is hand-wringing in America over growing income inequality and excessive executive compensation.
The complaints are not emanating from populists on the left or ivory- tower academics. The Federal Reserve chairman, Ben Bernanke, devoted an entire speech this month to income inequality, worrying that it threatened "the dynamism" of capitalism. And President George W. Bush has been a critic of greedy executives.
These conservatives have realized that, for all the strength of the American economy, many people feel it is chiefly the rich who are getting richer while the middle and working classes struggle to stay even. This is likely to be a big issue in the 2008 presidential election.
The gap between the wealthy and the less affluent has gradually widened for decades, accelerating during the Bush presidency. Meanwhile, U.S. chief executive officers and chief financial officers now make 400-fold more than average workers; that gap is 20 times bigger than it was in 1965.
Inflated CEO pay — such as the 357millionretirementpackagegivenExxonMobil′sLeeRaymondorthe357 million retirement package given Exxon Mobil's Lee Raymond or the 357millionretirementpackagegivenExxonMobil′sLeeRaymondorthe210 million that Home Depot's Robert Nardelli walked away with after being fired — is fueling the populist backlash far more than the salaries of baseball players and other celebrities that Bernanke cited.
To be sure, excessive corporate compensation is only a small part of income inequality in America. Most experts agree that the larger problem requires significant and smart investments in education and job training for skills required in tomorrow's economy.
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