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Jeremy Lin and liberal confusion, ignorance, hypocrisy

Economist Greg Mankiw provides an excerpt from economist Kenneth Rogoff’s excellent point regarding liberal confusion, ignorance and/or hypocrisy regarding wide income disparity between top earners and others.

What amazes me is the public’s blasé acceptance of the salaries of sports stars, compared to its low regard for superstars in business and finance. Half of all NBA players’ annual salaries exceed $2 million, more than five times the threshold for the top 1% of household incomes in the United States. Because long-time superstars like Kobe Bryant earn upwards of $25 million a year, the average annual NBA salary is more than $5 million. Indeed, Lin’s salary, at $800,000, is the NBA’s “minimum wage” for a second-season player. Presumably, Lin will soon be earning much more, and fans will applaud.

Yet many of these same fans would almost surely argue that CEOs of Fortune 500 companies, whose median compensation is around $10 million, are ridiculously overpaid. If a star basketball player reacts a split-second faster than his competitors, no one has a problem with his earning more for every game than five factory workers do in a year. But if, say, a financial trader or a corporate executive is paid a fortune for being a shade faster than competitors, the public suspects that he or she is undeserving or, worse, a thief.

http://gregmankiw.blogspot.com/2012/03/rogoff-reflects-on-jeremy-lin.html (link there for full piece by Rogoff)

I would only make one note, to be thorough. There is a possible objection to high CEO income if there is a reasonable argument in some case that it is resulting from poor corporate governance (e.g., CEOs sitting on each other’s boards and scratching each other’s backs) in conflict with the interest of shareholders. That said, that is not the crux of liberal’s objection to high CEO salaries. They just think it’s “unfair”.

Also, in my effort to bend over backwards to be fair, some liberals do object to high salaries earned by athletes. But I agree with Rogoff that there are a heck of a lot of ‘em that don’t object, at least not nearly enough to get worked up over it, let alone squat in a park for days and weeks (and yes, I do mean a double entendre with the verb “squat”)

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