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Social Impact of $240,000,000 salaries

The "reward" entitlement mentality

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Today at BJOL:

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Everyone talks about average salaries; wouldn't median salary be a better indicator? Or is that what the media mean when they say "average," and they're just being sloppy? I expect the medial salary is quite a bit lower than the average, as it would take quite a few minimum salary players to balance out each ARod or Pujols, etc.
Asked by: DanaKing
Answered: 12/30/2013
A better indicator of what?
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As to large salaries for athletes and movie stars. I always thought it was better for the performers to get the money than the owners. No one has ever paid to see an owner hit a baseball, or captivate us on the screen. One possible solution is a 'super' tax bracket. Income beyond some huge amount, say $2MM per year gets taxed at a much higher rate than our current highest marginal bracket, which I believe is around 40%. Make that number around 65% and at least some good will come of it.
Asked by: 3for3
Answered: 12/30/2013

Those are really good 1950s ways of thinking about the problem. Sorry; that was a little harsh. Slow down. Take time to think through the problem. You're trying to tell us that the failed solutions of the past will work now. They won't. You're trying to tell us that the rhetoric of the past is deep wisdom. It isn't. These are just knee-jerk comments. You can do much better.

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Bill, the average salary in mlb is now, if I'm not mistaken, around $3 million. If it continues to increase, as I'm sure it will, do you foresee a time when it could lead to a backlash among the fans? Thanks.
Asked by: manhattanhi
Answered: 12/29/2013
Not in exactly that way. I do believe there will be a sea change in the perception of sports salaries--and the salaries of movie stars and CEOs--and the public will turn against these very large numbers, and begin to denounce them. Do I think that will happen as a direct result of escalations in baseball salaries. . .no.
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This social-political post is motivated, in part, because yesterday at my church we had a Philippine friend give us a presentation about his life in the Philippines.  Loaded with death, starvation, and many other forms of tragedy.

The man was surprisingly happy, well-adjusted, and was not bitter about his lot in life.  He was warm towards us as rich Americans, generally, and tearfully grateful for all the help that we'd sent him and his friends over the years.

He cried when talking about the death of his mother at age 11.  His mother charged him to take care of his younger siblings; soon after, he and his siblings were all separated.  He was sad talking about it, but he does not blame anyone for his difficult life.  People in Third World countries tend not to feel like 50" HD TV's "are the way things ought to be."  

People in those countries tend to feel like challenge is the natural flow of life -- not something to resent, but something to cope with.  0-0 draws, in soccer, annoy Americans.  They do not annoy Bulgarians.

Later, this young man found a sponsor, went back, and gathered his siblings to live in a Nipa hut in his local preacher's back yard.  

Eventually he became a doctor, managing a care center for the poor and mentally diseased.  Now he comes to the States and politely offers us chances to sponsor the work.

Seeing this Filipino's optimism and positive bearing, that was a life-changing event.  No words will capture it; you'd have to have been there.  :- )

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We had a family member, since passed, a college professor.  He deeply resented the incomes of the richest Americans, and called for 90% tax rates on them.  90% plus.  

(William F. Buckley once asked a debate opponent, "What, in principle, would be your objection to a 100% tax rate on everyone?"  Which, of course, would be slavery.)

I asked this family member, "Supposing you were the only Native American, in a community of 5,000, who knew how to whittle flutes.  You had sold 1,000 of them for sea shells, and had by far the most sea shells of any member of the community ..."

"Another Native American, #1,001, comes up and asks you to make another flute.  What, in principle, do you see as the social damage occurring because of this next transaction?"

You make the transaction illegal, what you have really done is prevent #1,001 from having a flute.

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Surprisingly, he didn't have much of an answer.  He thought a while, and thought "No one person should have that much power."

But in America, $240,000,000 does not buy a lot of power, as such.  Robinson Cano is not going to dominate the Puget Sound region.  He's going to have more power than you or I do, but he's not going to have as much power as a minor politician.

If it were merely a question of regulating Bill Gates' power, you can make restrictions on what he could DO with his money -- you could regulate the USE of his money, rather than the ACCUMULATION of his money.  You could make a rule that Nintendo must not donate money to Rakuten.

This "leftist" family member (whom I loved dearly) did not send any of his income overseas, to third world countries, that I was ever aware of.  Some "leftists" do, of course.  This particular person was always way, way too far behind on his debts to do so....

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My family member would talk about it being an "evil" that X% of America's wealth was concentrated in Y% of the people.  (His salary was above the median, and he never gave money to those in lower social strata, so I questioned whether his motivation was compassion.)

Certainly there are consequences to social strata.  But in America, the "poor" have cell phones, DVR's and 50 pounds to lose.  

My mother, when she was 80 years old and using a walker, had her own carpeted private apartment (!!), a nice TV, plenty of food, a personal doctor, and so forth.  Social Security, the WA State food program, etc etc, provided her a "dream life" by rural Philippine standards.

There does exist "income inequality."  The phrase itself makes the situation sound evil; the language itself accuses society of unfairness.  

But is it "evil" for one child to have 32 crayons when another one has 16?  I've thought about it for a long time, many years, and I don't know why it is inherently evil for Robinson Cano to have privileges that I don't.  The only inherent argument against it, that I can see, arises out of jealousy.

This family member couldn't feasibly make the argument that a poor person, paying $7 for a bleacher seat, was being exploited by social evil (since Howard Lincoln & Co. accumulated another fraction of the poor person's wealth).

You make the transaction illegal, you simply make it impossible for the poor person to watch a baseball game.

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Sure, it would be nice if everybody were rich.  (In America, we've essentially accomplished that.  Anybody willing to work 40 hours at a fast food job, and stay clean of drugs and alcohol, lives a "dream life" in my Philippine friend's world).  

But for me, the poorer person in relative terms, to resent Robinson Cano (because 50 million people purchase the spectacle of his playing baseball), does me the poorer person no good.

Sure, the rich should be generous.  The media is not generally eager to make it visible when they are generous.  How much money has Bill Gates given away?

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Here, by the way, are 20 things the rich do, that the poor don't.  For example, 80% of wealthy people are -- right now -- focused on some single goal, such as losing 20 lbs.  Only 12% of very poor people are.  The fact is, some people are poor because of circumstances, such as my Philippine friend when he was young.  It's also a fact that our choices have consequences.  Both statements are true; they're not exclusive.

As Bill James put it, Robinson Cano indeed has an entitlement mentality.  But it is a distinct mentality, the mentality that says "I've worked so hard, and am so talented, that I am entitled to rewards."

How hard, exactly, do you think Robinson Cano worked to get to this point?  How much focus did he apply?

It seems to me that athletes such as Russell Wilson and Aaron Rodgers, hitting $100M paydays, are positive role models in terms of effort-and-reward.  I don't think that many 14-year-old boys are oblivious to the idea that they worked fanatically to attain success.  Junior high schoolers realize that earning a letter, in football, will require big sacrifices.

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In the case of my family member, there honestly was nothing behind his "tax the rich" agenda, other than jealousy.  And personally, I don't see jealousy as moving the society anyplace it really wants to go.

I've got a blind spot here, because I know that some people want Robinson Cano's salary taxed at 65%, 80%, 95% for positive reasons.  Those reasons are opaque to me.  I'd appreciate it if somebody would explain them to me.

Because if Tom Scholz has a billion CD's of his music, and I want to give him another $10 for a CD, I don't see how it harms society.  By "I don't see how," I mean that I don't see how.

Respectfully,

Jeff

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