Washington Post columnist Steven Pearlstein wrote a piece yesterday (10/13/10) headlined “Wage Cuts Hurt, but They May Be the Only Way to Get Americans Back to Work.” The point–in case you didn’t catch the drift ofthe headline–is that workers are going to need to take pay cuts in order to get the U.S. economy back on track. U.S. workers simply make too much in comparison to international competitors.
Pearlstein cheers the move by some U.S. autoworkers to take a pay cut–the kind of “structural adjustments that are necessary if the U.S. economy is to find a new equilibrium.” But taking a 20 percent pay cut sure isn’t for everyone:
I’m sure many of you are reading this and thinking that if anyone is forced to take a pay cut to rebalance the economy, surely it ought to be overpaid investment bankers, corporate executives and newspaper columnists. That’s how things would work in a socialist paradise, but not in market economies, which are much better at producing efficiency than fairness.
While it’s good that Pearlstein anticipates the reaction of his readers, his argument is entirely unconvincing. Investment bankers operate in a “market economy”? Then why did Wall Street require a massive government intervention in order to avoid what we’re often told could have been a total economic meltdown?
The idea that one would hold up the newspaper business as any sort of “market” model is questionable. (Certainly the Washington Post would not qualify as a business success at the moment.) But let’s say that a paper like the Post operated on the principle that thoughtful opinion columnists should compete for space in the paper. Given that many people would give the Post a column for something close to free (the Internet is full of free opinion, some of it quite good), it’s hard to see how Steven Pearlstein would have a job anymore–or at least one that pays very much. And that outcome wouldn’t even depend on the creation of a “socialist paradise.”
Dean Baker has more thoughts on Pearstein here, which as usual are worth reading.
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Well, there wouldn’t be any investment bankers or corporate execs, overpaid or otherwise, in a “socialist paradise”, would there?
There would be columnists, but in a world where folks were treated with dignity and respect, Pearlstein and his ilk would be hard-pressed to find gainful employment as such, wouldn’t they?
Now, there’ll never be a paradise of any sort, but a world that values cooperation over competition, and people over profit, is our last best hope of saving this old rock, isn’t it?
I wouldn’t bet money on it happening, but if we’re to have any chance of survival, we’ll all have to bet our lives on it, won’t we?
Corporate executives pay themselves outrageous salaries and bonuses because they can. Pearlstein’s magic “market economy” has nothing to do with it.
[…] http://www.fair.org/blog/2010/10/14/wpost-columnist-pay-cuts-for-everyone-except-me/ […]
[…] Social Security payouts. Sometimes I’ve thought that was unfair of me, but then (courtesy of FAIR) we got Steve Pearlstein’s Washington Post column which explains why cutting wages is a great […]
Tentatively I will agree that if pay cuts are asked for…..It should always be across the board.Top down.I say tentatively because I have noticed with libs that”where you give a pig a finger he will often take a knuckle”.
I see the future(as FAIR bloggers would have it) and it looks like everybody take a 20% pay cut ….PLUS taxes go up 25% for those dirty so called rich.Double wacka roo for those risk takers.That should teach anybody who wants to achieve a high level of success with all the schooling and such that that entails.Bastards
I hate to repeat the obvious. Real purchasing power has gone down for the last nine years of Republicans. Remember $4 a gallon gas. I Believe that was the straw that broke the camel’s back and wrecked havoc with the economy. If there was real competition from all classes, the economy would not be in the mess it is in. I suppose
up is down and down is up these days.
Mary if you are going to compare the Bush years (economically )with the Obama years….well dont.They were the good old days.And please don’t think I am lauding him.I had huge disagreements with the man especially economically.He spent like a drunken sailor. Prescription drugs….He allowed the socialist programs of Fanny and Freddy to wreak destruction when he KNEW how wrong it was.He under regulated when he should of been on the watch.It was within his constitutional authority to do so.He had one thing…an economy chugging along.For 7 and a half years it was all looking Ok even with the drain of the war.Look at one man-your president.Look at how he made his money and when.The Bush years were good years for him.But as we know there was a leak in the tire of this country.Obama inherited a crappy tire.And Obama has expanded on the spending and the smoke and mirror games.He is wrecking all our tires.We can do better
.As far as gas and oil …..we are in a country that has gone schitzo.We are loosing our refining base. Blocking new development. Nuclear power is the kiss of death for most politicians. GReen power is the new hot word but it is not picking up the slack.WE need to use all natural resources to remove ourselves from the energy tit now.And develop new forms as we go.If we don’t you will see that” last straw” in your lifetime as gas cripples us in some future nightmare scenario.
The beauty of reality is we can see clearly now. We have listened to those “experts” (and we were willing to call them that because they made BIG money – but we have the chance now to see the big money that decieved us was a Ponzi scheme).
How did we allow these “experts” to convince us that they had a solution to the devistation they caused…just give them MORE money to reward them for “market” failure? Who made THAT decission? (after who broke both legs at the knee, and offered a band aid?)
I am not an expert, but it seems simple logic to throw the Ponzi “experts” in jail, confiscate their stolen property, and tax TOTALLY their estates.
Thank you thank you thank you Donr for saying so clearly and concisely what so many bloggers here believe.That GOVERNMENT should be judge, jury, and executioner of the peoples property,lands,and all their belongings.My God even where you are even minimally correct you —-end up entirely wrong.And that is why the road to hell is paved with Liberal good intentions.
Steve Pearlstein would do well to remember what happened to Marie Antionette, when she said: “Let them eat cake”. The caustic comments about working people, and his not being in line for a cut in pay don’t help with this difficult time in our history. I will be sure to not purchase anything that might bring profit to him., and hope that others do the same!
[…] Washington Post's Steven Pearlstein (11/11/10), one of the few Americans (by his own account) who DOESN'T need to have his wages cut, writes: Reducing the federal deficit won't by itself do […]