Last Friday in a New York Times op-ed, Peter Georgescu, billionaire business man and the author of “The Constant Choice: An Everyday Journey From Evil Toward Good”, supported by Ken Langone, co-founder of Home Depot, sounded more like Bernie Sanders than a conservative billionaire Republican. Well, at least he sounded that way until you read further toward the end.
He starts by saying he’s sacred, that Ken Langone and many other chief executives are scared. What’s frighten them? They’re afraid of where income inequality will led.
“If inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes, such as the 80 percent tax rate on income over $500,000 suggested by Thomas Piketty, the French economist and author of the best-selling book “Capital in the Twenty-First Century.”
Georgescu then goes on to tell the sad story of his early life. How he’d been separated from my parents when they left for America, leaving him behind in Romania, when he was only 7. How at the age of 10 he’d been placed in a hard-labor camp along with his older brother and how he was finally rescued and reunited with his parent due to the intervention of President Dwight D. Eisenhower in 1954. He ends his brief life’s summery by revealing that it was “through kindness and compassion” that he was invited to attend the elite Phillips Exeter Academy, which would eventually led him to Princeton, the Stanford Business School and onto financial success.
He then says: “Would young people get those opportunities now? I don’t think so.”
Georgescu called capitalists to arise and fix the problem saying:
Business has the most to gain from a healthy America, and the most to lose by social unrest or punitive taxation. Business can start the process in two steps. First, invest in the actual value creators — the employees. Start compensating fairly, by which I mean a wage that enables employees to share amply in productivity increases and creative innovations.
The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees.
Sounds great. Right? Well yes, until you read on and find out just what Georgescu suggests can get the ball rolling and entice capitalists to buy in.
“Government can provide tax incentives to business to pay more to employees making $80,000 or less. The program would exist for three to five years and then be evaluated for effectiveness.”
What? Georgescu is asking the government to give corporations the money (as tax incentives) to increase the salaries of their workers! More corporate welfare at a time our country is in debt, Corporate profits are soaring and U.S. CEOs are estimated to earn from 400 to 500 times the median salary of workers.
This my be one capitalist’s prescription to save capitalists from themselves, but it sure won’t cure them. Here’s a revolutionary prescription. Perhaps corporations and their CEOs should grow up, reach into their own very deep pockets, be responsible, go to work on fixing what ails them and do what needs to be done to save themselves.
Frankly, if this is the best capitalists can come up with, it’s looking more and more like mass civil unrest is the only things that will get billionaires to realize the gross error of their ways. Or we could just elect Bernie Sanders president.