Fred, the very title of your blog suggest that you view income confiscation is a form of deterrent or punishment or both for something inherently immoral.

If someone earns a lot of money dishonestly, (s)he should be prosecuted and punished for committing a crime.

If someone earns more than someone else honestly and legally, it is fundamentally unfair to take away his income simply because other people earn less.

I used to have my own business and even now I make more money than what Joe Biden considers proper. But I grew up in poverty, I never broke any laws, never been arrested or stopped by police and I donated serious money to charity over the years. I worked my ass off, trying to be creative, enterprising, fair, focused and effective. That's the American Dream as I undestand it.

Why am I held responsible for the fact that an auto worker is making less than I make? Or the fact that a CEO (who makes millions) makes more than an auto worker or me?

People tell me that I'm responsible for providing welfare to the poor, but I have no say in what happens with that money and, guess what, poverty is alive and not going anywhere. Why???

Your assumption is that a CEO income is automatically unfair and immoral than an auto worker.

But I think Donal hits the nail on the head when he talk about value.

An auto worker creates as much value as he's hired to do. A good CEO creates enough value to hire 10,000 workers. A brilliant CEO creates enough value to start a billion dollar industry with thousands of well-paying jobs. A terrible CEO destroys the company.

The impact of a CEO's decisions and the scope of his responsbility is exponentially higher than that of an auto worker, as is the value a CEO could create or destroy.

The problem with today's CEOs is similar to plane crashes and airlines. A few well publicized disasters create a bad name for the entire field. Instead of punishing criminality, we demonize them all and then we wonder why all the good guys are gone.

What if you compared a fruit picker with an auto worker instead?

What if every 20-year old high public school drop-out who's destined to spend his whole life as an auto worker or, as Kerry suggested, in the military, had a chance to get good education and skills training so that he could create something that's more valuable?

Wouldn't a fruit picker be happy to take his place at GM and keep all of what he earns? And wouldn't that be fair?

incomes far in excess of what they earn

Wasn't there a norm once in which the income of the top paid individual in a corporation was something like 14 times that of the lowest paid? Whatever happened to that?

Fred - Thanks for a thought provoking blog. From my own business career, I believe strongly that some people receive income far, far, far in excess of what they really "earn" or deserve. Let me give you an example from my own career. I worked as a senior executive for a large financial company. I was happy with the income I received for the three decades I worked there.

This financial firm a couple of decades into my working career decided to buy a large Wall Street firm. The compensation levels between comparative jobs in the Wall Street firm and my staid financial firm was widely disparate. In order not to create morale problems the pay for executives in the financial firm were increased by approximately 75%. My job everyday was no different but I was being paid $230,000 more per year.

No - I did not reject the extra money but I did feel guilt. It was the time I went from being a kind of RINO to a solid liberal Democrat.

In my years of working with executives from Wall Street and the financial industry, I have met many people in my situation. Vastly overpaid for the work we actually do. While all worked hard and many hours, the only reason for the outrageous pay was our luck in being in an industry that paid very high wages. A similar executive position at a large industrial or manufacturing company would earn nowhere near as high compensation. An illustration of this fact is I once turned down a job as CEO of a large service industry company with almost 20,000 employees because the pay was so much less than what I was making.

I don't have a firm solution to this inequity but one thing I do favor is a continual escalation of the tax brackets in excess of the current makimum of 35%. I would like to see a 70% bracket on pay of $10 million or more. I would also like to see equalization of tax between ordinary income and capital gains. It would sure slow down the kind of sweet heart deals that Wall Street uses to boost executive income that is tax favored.

Any job that is worth doing, is worth exactly the same as every other job.

What is the value of any job, the myth is the invisible hand of the market place decides. Ayn Rand wrote a great book about it. I know I'll offend many here when I say I liked Atlas shrugged. But you see, I knew it was fiction. I loved Child of Fortune by Normand Spinrad too but I'm not planning on hopping onto a void ship to travel out among the stars to visit the far flung worlds of men. I liked Atlas Shrugged but you can't run an economy on a book of fiction.

At a certain point the rich and powerful get so rich and powerful they can game the system for the benefit of the rich and powerful. There are no Hank Reardons and Dagny Taggarts out there that are too proud to game the system, too proud to only make money by doing right and to proud to ever cut any corners or do anything unethical.

Look at wall street. For years they gamed the system with derivatives, hedge funds, and leveraged junk mortgages making millions and living better that the kings of old. Used the profits to buy politicians to make even greater amounts of cash until they brought us to the brink of a complete collapse of the economy.

Who paid? Who lost? How did the invisible hand reward the truly honest and productive wall street broker and punish those who brought us to this point?

Look at Enron. For years Lay and his executives made obscene salaries while engaged in accounting fraud and corporate abuse. They manipulated the energy market to raise prices and contributed to the the near bankrupcy of California. While top executives were dumping stock Lay was encouraging low level employees to keep it and at times forbidding them from selling. While laying off 4500 workers the company was shelling out 103 million in bonuses to high level executives.

Even if Lay and Skilling were tried and convicted and forced into bankruptcy that would only pay back a fraction of what was stolen. But what of all the other executives that either couldn't be connected to the fraud or were in fact unaware and innocent. They still received salaries based on the worth of a company based on abuse and fraud and walked away with the millions accumulated over the life of the company.

Is anyone going to seriously claim that at a time when the invisible hand decided the company needed to shed 4500 workers that same invisible hand decided high level executives were worth 103 million in bonuses?

I've seen it time and time again. I lived through it when my father worked for the Bethlehem Steel. During the Reagan recession the company renegotiated the contract, "showed" the union the books, and demanded wage and benefit concessions because the company couldn't afford to continue paying what it had in the past. My father and the other union members voted to accept a cut in wages and benefits to help the corporation stay in business. A few months later the corporation gave a pay raise to the executives. Does anyone want to explain how the invisible hand decided that for the Bethlehem Steel to survive the blue collar workers needed a cut in pay and the white collar needed a raise? This isn't some rare occurrence. I watched it happen time and time again over the years.

There's no invisible hand deciding what a particular job is worth. There's just people with power and varying degrees of spiritual development and consequently varying degrees of morality and ethical behavior. Those at the top use their power to get as much of the pie for their class, those they work with in the executive suites and boardrooms, those they hang with at the country clubs. They other side of this equation is they give as little as they can get away with to the blue collar workers.

Yes, I'm talking class warfare. In 1965 the ratio of executive pay to worker pay was 24 to 1. Its now risen to 300 to 1. The rich and powerful have been on a 40 year money grab not because the invisible hand decided their work is now worth more than 10 times as much but just because they could get away with it. At the same time the top tax rate went from 70% in 1965 to 30% now. Its class war and it doesn't take much looking to see who won and who lost.

This isn't complicated. People "earn" what other people are willing to pay them for a day's work. The reason CEO/officer salaries ar so high is that the "other people" setting their salary are their direct subordinates. It's a natural conflict of interest that is difficult to overcome.