Tag: Bernie Sanders

The Moral Arithmetic of American Capitalism

Did you know that the average CEO compensation at large U.S. public companies now stands at roughly 280 times the pay of a frontline worker?

That represents a staggering shift from the 1960s, when CEOs earned 20 to 30 times what their workers made. Since the 1970s, the CEO-to-worker pay ratio has increased by over 1,000 percent.

This divergence did not occur by accident. One pivotal change came in the late 1970s, when American corporations moved away from a model centered on growth, stability, and shared prosperity toward one focused on maximizing shareholder value. Executive pay was increasingly tied to stock price rather than the long-term health of the firm.

With the rise of stock options and equity grants, CEOs could reap enormous rewards without raising wages, expanding productivity, or strengthening the workforce. Compensation ballooned even when companies stagnated.

Tax policy amplified the effect. In the 1950s and 1960s, top marginal income tax rates exceeded 70 to 90 percent, effectively discouraging runaway executive pay. That restraint largely disappeared in the 1980s, as marginal tax rates fell sharply, making extreme compensation both legal and cheap.

At the same time, labor power collapsed. Union membership declined, offshoring and automation accelerated, and job security eroded. Productivity rose; worker wages did not. Executive compensation absorbed the gains.

Business leaders defend this system by claiming that outsized pay is necessary to attract top talent. In practice, this has produced a self-perpetuating escalation, as boards benchmark CEO pay against ever-rising peer averages. In a globalized economy, profits flow upward, not outward.

Yet America’s extreme CEO-worker wage gap is not an inevitable feature of advanced capitalism.

Consider international comparisons:

Typical CEO-to-worker pay ratios (large firms):

  • United States: ~250–350:1
  • Western Europe: ~40–90:1
  • Japan: ~15–40:1

In much of Europe, workers sit on corporate boards, restraining excess. In Japan, adopting the American compensation model would be seen as collective irresponsibility, not enlightened management.

Public anger is justified—especially amid persistent inflation and decades of wage stagnation. Can the old restraints return?

There are tentative steps. The Tax Excessive CEO Pay Act of 2025, introduced by Rep. Rashida Tlaib and Sen. Bernie Sanders among others, would raise corporate tax rates on companies whose CEO pay exceeds worker pay by extreme margins, beginning at 50-to-1. But meaningful reform would require broad coalitions and a substantial shift in Congress. Change, if it comes, will be slow—and uncertain.

Transparency may be the public’s strongest immediate tool.

What has happened in America is not merely an economic evolution; it is a moral shift. Accumulation has replaced public responsibility as the dominant ethic, not only in corporate life but across society. Its most vivid emblem is the twice-elected billionaire president, Donald Trump, whose politics celebrate wealth while dismantling social safeguards.

Since 1990, the number of U.S. billionaires has grown from 66 to more than 800, while the median hourly wage has increased by only about 20 percent.

This is not efficiency.

It is not merit.

It is not inevitability.

It is obscene.

—rj

Apple vs. the FBI: How Money May Decide the Issue

thThings are really heating up these days in the ongoing dispute between Apple and the FBI.

In December, fourteen people were killed by ISIL sympathizers Farook Malik and his wife Taskeen, in San Bernardino, CA.   In the aftermath, the FBI has been investigating the possibility they may have had accomplices. Backed by a court order, the FBI has requested Apple remove the security blocks on Farook’s iPhone.

CEO Tim Cook, speaking for Apple, refuses to comply, contending it would compromise the privacy of its smartphone users.

I’m not taking sides on the controversy here.  The issue is as heated as it is complicated, with the country divided in its opinion and perhaps SCOTUS inevitably having to make the call.

What does concern me is Apple’s new strategy to move the matter to the Congress for adjudication. (Hearings begin next Tuesday.)

Fact is, the Congress is hardly the right party to decide the issue, given the systemic corruption fostered by business conglomerates soliciting favors through huge sums of money donated to its members.

We see this, for example, with regard to the National Rifle Association (NRA), successfully preempting responsible gun legislation, despite myriad mass shootings like those in San Bernardino,.

In 2014, NRA contributions to members of Congress amounted to $984,152 with an additional $3,360,000 for lobbying.

What really fries my brain is that it spent a whopping $28, 212,718 in outside spending!

Apple, as such, is being disingenuous in attempting to shift the scenario to the Congress, having demonstrated a lengthy penchant, like its fellow high tech icons, in substantially contributing to the Congressional feedbag, their mission to deter any regulatory legislation that would rein them in. In other words, a good many Congressional members owe them favors and now’s an opportune time to collect and circumvent the courts.

Since 1990, Apple has contributed $1,902,870 and spent $27,083,008 on lobbying.

Bernie Sanders was right when he denounced PAC money contributions as undermining our democratic franchise: “People aren’t dumb.” These donors don’t give willy-nilly, but expect something in return.

On the other hand, even Bernie has had his hand in the till, ranking second among senators in receiving money from Apple and its employees.

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Now let’s see how the system filters out elsewhere. The most prominent Democrat opposing Apple on the issue is Diane Feinstein.   Guess what? You’ll find her absent from the list of top recipients of money from Apple and its allies that include Microsoft, Google, Facebook, and Twitter.  These conglomerates are not about to waste their money on those opposing their interests.

In third world countries, we’d call it bribery.

In the U. S.  Congress, many are willing to take the bribe.

–rj

Bibliography:

OpenSecrets.org

IVN