Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.Boo Hoo Hoo! Executives don't like rules. They certainly don't like the new rules that would limit their pay at companies that accept government bailout money. Vacation homes, chauffeurs, personal trainers, private schools and tutors. They may have to cut back. Maybe Bob Geldof can organize a benefit concert.
Just a couple of months ago the case was made not to bail out the ailing Big Three automakers. Labor costs were out of control we were told! Those union auto-workers -- with all those perks like health-care and pensions -- were earning close to $80 an hour! Except it was all misinformation. In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour.
Sometimes I get the distinct feeling that arrogant, under-worked executives think they're better than everybody else. Who wouldn't feel superior when you're better off than royalty of old?
a few things come to mind after reading this blog post. first, regarding these people's behaviors, thorstein veblen put forth the idea that once you have achieved a certain level of comsumption, it becomes difficult to go to a lower level. veblen also put forth the idea of conspicuous consumption (also a theory of behavior) that the purpose of consumption is for display purposes, ie, to show off your wealth (or that you can afford to buy things to consume). the final theory from veblen is pecuniary canon of taste in which the sufficiently wealthy engage in stupid behavior (regarding consumption).
ReplyDeletemy initial reaction is the same as yours. i feel outrage towards these execs who feel that they are privileged to make that much money and feel they can't live below those means when most of us (the taxpayers who are ultimately paying for their greed and avarice)are barely making it right now. the reason i wanted to present the veblenian ideas was because i wanted to approach it from an institutional econ point of view. i am not necessarily saying that these theories justify their behavior, but i wanted to present some ideas behind human behavior (and to show off my erudition :P)