To be a member of the hated, reviled, filthy, wicked “1 percent,” one needs a household income of about $400,000 a year. That’s no small thing — 99 percent of us don’t manage it in any given year — but it’s not Jay-Z money, either. (What, your wife didn’t do like Mrs.-Z and give you a $5 million watch for your 43rd birthday?) A generously compensated high-school principal can make a 1 percent income solo, and a couple of married high-school principals can hit 1 percent territory with relative ease.
If your name is Clinton, you do not even need a full year to make that kind of money — you need an hour.
Sometime National Review contributor Peter Schweizer has a book out this week bearing the straightforward title Clinton Cash, in which he documents the coincidence between the financial contributions of foreign interests to Clan Clinton and favorable treatment by Hillary Rodham Clinton’s State Department. Mrs. Clinton has been doing a fair Elizabeth Warren impersonation of late on the issue of executive compensation, which has led a few critics to point out that at approximately $300,000 an hour, Mrs. Clinton as a maker of speeches out-earns all of the highest-earning American executives on an hourly basis or a daily basis. And we’re talking about Fortune 500 guys, there.
Discussions of CEO pay generally focus on the Fortune 500 or on publicly traded corporations. This is a mistake, for many reasons: The Fortune 500 CEOs are by definition an unusual group — there are only 500 of them in a nation of 310 million — which means that using them to judge executive pay, or even chief-executive pay, is like combining the incomes of the year’s New York Times bestselling authors and those of the screenwriters behind the year’s hit movies and television shows to get an impression of what an American writer makes, or using the New York Philharmonic to get an idea of what an American musician makes. In reality, the average American CEO — the average chief executive — makes a little less than $200,000 a year. Paul Krugman makes more than that for a part-time gig thinking deep thoughts about . . . economic inequality.
Which is to say, Mr. and Mrs. Clinton could each work an hour every year and still have an income that would place them well into the “1 percent,” while Mrs. Clinton by herself could work an hour a year and out-earn, by half-again as much, the typical American CEO.
Being the boss in a for-profit enterprise is less profitable than you’d expect. Profit-making isn’t where the profit is.
Consider this: The city manager of my hometown — the sprawling and urbane metropolis of Lubbock, Texas — makes $235,000 a year, which seems to me much more significant than what the boss makes at IBM or Goldman Sachs. For one thing, there are only 500 Fortune 500 CEOs, but there are a hell of a lot of small-fry city managers, six-figure high-school principals and million-dollar superintendents, $300,000-a-year Philadelphia police detectives, etc. Running parks and recreation in Pawnee, Ind., doesn’t seem like all that high-paying a gig for the fictional Leslie Knope and her gang — but in the real world, it’s a pretty good jump on a 1 percenter’s income.
Another important difference between Fortune 500 1 percenters and government 1 percenters is that you don’t have to pay CEOs unless you really want to. I have worked for closely held and publicly traded companies, and I have seen some pretty awful executives in action. (In a desk drawer somewhere, I still have my Journal Register Company stock-option paperwork, which I drag out from time to time when I want to make myself feel bad.) Unlike Senator Jim DeMint and that other flaming right-winger, Bernie Sanders, Senator Clinton voted for the Wall Street bailout; but the occasional Clinton-approved handout aside, you don’t have to worry much about whether any given CEO is worth his salt. That decision, for better or for worse, is made by boards of directors on behalf of the shareholders who own the company. Some boards do a pretty good job, some don’t. But if you are a shareholder who believes that Apple is misspending your money, then you can rally other shareholders against the management or you can just sell your Apple shares.
On the other hand, if you thought that Bell, Calif. — population 35,000 — was overpaying its city manager (at $800,000 a year!) you couldn’t sell your Bell shares or short the hell out of Bell. You had to keep paying, or the sheriff and burly men with guns would eventually come and seize your property. Say what you like about Warren Buffett, Berkshire Hathaway doesn’t have the power to withhold money from your paycheck or order you to pay up at gunpoint.
If Fidelity, Goldman Sachs, and the nation’s drug-store chains want to dump wheelbarrows full of 100-dollar bills at Mrs. Clinton’s feet for the privilege of listening to Herself talk about Herself, that’s between them and the suckers who own their shares. (Government-funded institutions such as colleges, and organizations that have financial relationships with government agencies, are another question.) But if we really want to take a look at whose elephantine paychecks are weighing heavily on the finances of those “everyday” Americans that Mrs. Clinton likes to talk about, it isn’t Lloyd Blankfein’s fat stacks. It’s your local city manager’s, your high-school principal’s, your police detective’s when he’s earning more in questionable overtime than he is in salary. It’s your local union-goon lobbyist getting a lifetime pension for one day’s work as a substitute teacher.
#related#Why? Because, unlike with Fortune 500 CEOs, you actually pay these guys.
Mrs. Clinton et al. are counting on voters’ being stupid — on your not being able to understand that there is not some big national slop-bucket labeled “Income,” that nobody is getting paid less because a Fortune 500 CEO gets paid more. But somebody is getting paid less in order to fund lifetime pensions for IRS criminals and the S-Class payments for 1 percenter school superintendents.
That would be you, sucker.
— Kevin D. Williamson is roving correspondent for National Review.