Dr. Martin Hash Podcast

People often confuse Capitalism with a meritocracy, where highly competent people are highly rewarded, but there are 10,000 qualified applicants for every high-paying job, so luck plays by far the biggest role in who gets the big bucks; probably a fraternity brother from Yale has more impact on their success than merit. This was still okay, people understood nepotism, always wishing they were related to the right person, but add one more ingredient to that exploitative mix, that being extreme differences in compensation, and dissatisfaction and a sense of betrayal start cracking the foundation of society. When the boss's son was paid twice what you were, that was one thing, but at 235 times the median, no amount of apologist prattle can defuse that bomb.

When tax rates were lowered for high-income earners, there was no longer anything keeping individuals from wanting huge salaries. Usually there's a sympathetic Board involved, but there's also a huge part of ego and competition. Just look how marquee basketball stars are paid; their compensation is newsworthy and fame-making. Because of our confused belief in meritocracy, it seems from the outside that those players are worth their extraordinary incomes: how many 7-footers dribble like a Point Guard after all? However, this clear connection between ability and recompense blurs significantly in a business environment: tall, handsome, and owner's nephew do not equate to dunking from the Free Throw line.