Here is how the rhetoric, which we see in every defense of the stupendous salaries paid to the financial leaders (and, it needs to be said, corporate CEOs and top managers generally), goes: there is a competitive market out there. If we [insert any name here] don't pay millions of dollars to this particular worker, she/he will go off to another firm, perhaps, perish the thought, to a foreign competitor [note here: it is always good to sprinkle this rhetoric with a little fear to get in your way]. So, that's why pay goes up and up and up. It's the "market" that decides.
The point is that this is entirely a scam.
Pay has nothing to do with the "free market". It is entirely a function of a small group of people conspiring to bootstrap one person's pay over another person's pay--having nothing to do with the larger, and mythical, "free market".
The compensation consultant only gets paid--and only gets hired for future jobs--when he or she successfully boosts the pay of the CEO (thanks, of course, to compliant boards of directors). It has virtually nothing to do with competence or past performance of the company. It is a scam.
Yes, we can tax banks to recoup money from banks who took taxpayer money to bail themselves out partly because they paid outrageous sums of money to CEOs who acted in their own greedy self-interest (a tax we should support).
Yes, we need to stop the corrupting influence of money that lets these folks stop any real reform.
But, above all, we need to entirely change the dialogue. Every time we hear the slogan "market rates" or "competitive pay", we should ask how that pay was set and whether there is some independent way of actually assessing why a single person deserves pay that gobbles up an outsized share of the money paid out to workers.
And we need to demand from our elected officials that they stop regurgitating the idea of "market rates" without thinking what that means. If they profess to represent the people, politicians have to get some spine and stand up to the people who have robbed America and crippled the livelihoods and futures of millions of hard-working people.
