A short book review gives us a new perspective on problems in the US economy.
In the early 1980s, in a book called “American Journey,” I calculated that American corporate chief executive officers were making 30 to 40 times as much as they paid average production workers. Looking back at that, I see that I was surprised to learn that that ratio had increased from 25-to-1 in 1970 — and that in other developed countries the ratio was closer to 10-to-1.It seems now that I was easily shocked in the good old days. Today that compensation ratio goes from 300-to-1 to almost 1,000-to-1 in the United States, if you count various perks, including stock options and pensions.
Massaging those numbers produces rather startling results, as recorded in a new book, “Winner-Take-All Politics: How Washington Made the Rich Richer — And Turned Its Back on the Middle Class” by Jacob S. Hacker and Paul Pierson, professors, respectively, at Yale and the University of California, Berkeley.
Apparently, the real message of the book is that American politics has become enamored–but probably bought off–by big business in the states. American policy has rewarded the rich at the expense of the poor and middle class and the voters have been vulnerable to marketing that works against their own interests.
It is sad, but the real problem is finding a solution. Bad income distribution does deter investment and development of industries that help most people. What are we gonna do?