I own a lot of CDs by The White Stripes. I suppose that I could have gotten most of their music much cheaper by purchasing it as MP3s, but I wanted to have tangible copies of their music. I don't need to worry about my hard drive crashing. I don't need to worry about network access to get to the Cloud. I don't rely about the financial stability of companies that I must rely upon for access to my music, or their ability to keep hackers out of their servers, or their continued willingness to provide me with free access to things that I paid for. I have my CDs, they have been ripped into my computer, and they can easily be ripped onto my computer again, should my system crash irreparably. And I like knowing that they are there, because I love The White Stripes.
How many White Stripes' CDs do I have? 30, at present. This includes albums, imports, and CD singles. Why do I have all of these? Because every one of these albums, imports, and CD singles has at least one song or version of a song that was not on their regular albums. For example, I could only get "Jolene" from a UK import. And, while I already had a copy of "You Don't Know What Love Is", I would not have the Frat Rock version of it had I not purchased the CD single of the aforementioned song.
So why do I have all of these CDs? Because I want them. Why do I want them? Because I am interested in them. I have a genuine and overwhelming interest in the music of The White Stripes.
However, for all that, I'm willing to bet that you have more songs on your MP3 player than I do. Much of the space on mine is consumed by audiobooks and Teaching Company courses. Which is not to say that I don't have music on my mine, it's just that I likely have less than you. I don't feel bad that your Diamond Rio outpaces mine in sheer volume of music.
But I have more of The White Stripes than almost anybody. And more Green Day; especially now that I have added the Shennanigans, Kerplunk, and 1,039/Smoothed-Out Slappy Hours albums to my collection. And I'll bet I have more Mozart that most. And more Beethoven.
However, I'll bet I have fewer XBox 360 games than the average XBox 360 owner. And I'll bet I have fewer DVDs than the average person. But I'll bet I have more cans of Cisk. And more Bloom County books.
You have your things and I have mine. These are the things that we are interested in.
So, with that explained, who gives a crap that people who are interested in money have more money?
I had a paper route once. Not a bad job for a kid who couldn't drive yet. It was a pretty easy job, too. All I had to do was wake up and deliver my papers on time every morning. Once every month, I needed to send out my bills and receive my checks, making sure that everyone paid so that I could then pay the newspaper company for those newspapers that they delivered to me every morning. A job like that can teach a kid important lessons about responsibility. Unfortunately, the only thing I learned is that I don't like waking up in the morning.
I was the worst paper boy ever. I couldn't deliver the silly things on time because I couldn't get my sorry rear end out of bed. I would forget to send out bills every month, then wouldn't keep track of who paid them. I feel sorry for anybody who was on my route, because that newspaper was probably the single most unreliable thing in their lives. But at least the bill was just as unreliable on a monthly basis, so I think it just about evened out for everybody.
Money was supposed to be the reason to get out of bed at 5:00 AM and deliver the papers. But money didn't get me out of bed at 5:00 AM. Doubly so in the summer, when I didn't need to get to school on time. Heck, money wasn't even enough of a reason to send out the bills, because I would regularly neglect to do that at the end of the month. So, looking back on it, money does not motivate me to do things.
I want money. So does pretty much everyone else. That's why people complain about the fact they don't have any, while these sports stars and CEOs are making gonzo amounts of the stuff. But I, like almost everyone else, have almost no interest in money.
If I were interested in money, I would not be so willing to spend it on complete crap. I blew a several hundred dollars on White Stripes CDs while I was builing my aforementioned collection. Just last month, I pissed away a couple hundred more on dinners and drinks on the weekends. I do these things because I care more about these things than I do about the money itself. I could have put that money into a mutual fund or a savings bond or some other investment option that would actually help me have more money later, but I did not. Therefore, I really don't seem to be all that interested in money; I am instead interested in all the worthless shit I can buy with it.
Again, I enjoy having the stuff. But that's mostly because I like buying stuff with it. And I like seeing a lot of digits in my bank account on the few occasions I can see such a thing. But I am not particularly interested in the movements, actions, and activities of money. I know it sits in the bank. I know the bank loans it to somebody else, who then uses the money to buy a house or start a business. I know that it is used to buy stocks or bonds or commodity futures. But I am not all that excited about many of the complexities of monetary and fiscal policy that go so far in shaping our economy and its outlook. Neither do most other people. All they care about is getting that check every two weeks so that they can put it toward a car payment, or a vacation, or some cool new clothes, or a 12-pack, or any of a number of other things that will not increase their net worth.
Alex Rodriguez is often held up as the example of the overpaid athlete, so I will address his case specifically. Most of what I say could be adapted to the particular case of any athlete playing a major sport, so feel free to do so at your leisure.
I can't remember what Rodriguez's contract is—something like $250 million for 10 years or so—but people were appalled by it. "How can he be paid that much to play a kids' game!" they all screamed. And then they pay $40 to sit 300 feet away from him and watch him play baseball.
So what if Alex Rodriguez makes that much money? If he can make that much, he should make that much. He worked his entire life to become a great baseball player, and he apparently still spends long hours trying to perfect his swing and his game so that he can continue to be the best. Had I spent my entire life trying to be good at something, then I would want a lifetime's worth of work to pay off in some way... preferably monetarily. Because, if I spent all that time working to be the best at something and it didn't pay off for me, then all that work was a waste of time that could have been more effectively spent watching television, since that would have paid off just as well as working at my own self-improvement.
The Yankees are still making money, even with his (and all his teammates') ridiculously large contracts. The Yankees players are the ones doing all the work out there, why is it bad that the people doing the work are being paid well?
Besides, this is the height of Alex Rodriguez's earning potential. Essentially all of the money that he is going to make for the rest of his life is the money he is going to make right now. And, at any moment, he could get an injury or illness that could take away his future earning potential. If I rupture a tendon in my right shoulder or get arthritis in my knees, I can still look forward to potentially moving up in my company. Or, at the very least, keeping my current earning potential. If Alex Rodriguez has any of these things happens, he's dumped on the scrap heap and will have to live on and support his family with whatever he currently has saved up.
And it's not just his own requirements that he needs to worry about; his current salary is also his family's future. He can secure the financial future for his kids, and maybe even his grandkids with his current contract. He can make sure they don't need to scrape for nickels while they are trying to get through college. If his kids get sick, he can pay for the best medical care. When his kids grow up, they can do what they want to do, not whatever job they can get. So unless Alex Rodriguez is blowing all his dough on McLaren F1s and lighting cigars with $100 bills, then his contract is a pretty good deal for a whole lot of people he cares about.
So if some owner wants to throw more money at Alex Rodriguez than he deserves for playing a kids' game, then he would be a moron to turn it down. If Alex Rodriguez's boss is stupid, that is not Alex Rodriguez's problem. If the boss enjoys throwing his or her money away on excessive payroll, I don't know too many people who would turn down a paycheck that's too big. If your boss suddenly gave you a 150% raise for a job you had been doing quite well for your current salary, would you turn it down? Didn't think so.
So why is it bad that Alex Rodriguez is making mondo bucks? It's better than the old days, when the owners were cleaning up and the players were getting peanuts. Because then the players would need to find other ways to make money that would take away from the quality of a game that people pay a lot of money to watch. After the season, they wouldn't spend all their time working out and practicing for next season; they would spend it pumping gas or waiting tables. Or, if they were really hard up and on a really good team, they could just accept a bribe to throw the World Series.
I will grant that CEO salaries are pretty large. And they take up an awful lot of their companies' income. However, I would like to take an example of the CEO of Ford Motor Company, Alan R. Mulally. He makes somewhere around $18 million each year in salary and benefits. Not a small bit of change, but not as gigantic as many others'. However, it will work fine for my example.
So what does he get for this salary? Does he get to design cars? Does he get to test drive cars? Does he get to invent exciting new concept vehicles? Does he get to direct cool new commercials? Does he invent new fuels? What, exactly, does he do all day?
Well, it would seem that he spends his day reading financial reports. And attempting to figure out which product lines are going to sell well in about 5 years. And reading production reports. And trying to keep the stock price up at a decent and increasing level.
So how many of you want to read financial and production reports all day? Go ahead, try. Or, if you prefer, you can read something along the same lines: an annual report. I'll even give you a link to the annual report for the Ford Motor Company. Now read every word of it. Good luck.
Most people can't slog through this impenetrable glop of business-related muck. In fact, I'm willing to guess that you won't even try to do it, knowing that it may actually kill you with boredom. However, that impenetrable glop of business-related muck provides a very good summary of the past year of business in the company, supposing that you are willing to work through the spin control and obfuscation that make up so much of these annual reports. And if you want to know something about Ford and its business, you'd better be able to read every word of that report.
Perhaps the CEO isn't reading that report specifically, but he'd better be reading a lot of financial reports and projections and spreadsheets and other such tedious minutiae. And if he isn't doing that? Or at least keeping on top of the financial condition of the company? Well then, the Board of Trustees had better fire him immediately and find someone who will.
I think we can all agree that the tasks required of a CEO on a daily basis are nothing to get excited about. So what are his responsibilities? I mean, this is a pretty important guy, so wouldn't that make the job worthwhile?
Well, let's see, if he makes a mistake in his projections for the future, his company loses business and a bunch of people have to be laid off, his blue-collar employees will hate him for laying people off, his engineers will think he's an idiot, his management will think he's doing everything wrong, and the board of trustees will end up firing him and finding someone who can run the company properly.
And if he does everything right, then his blue-collar employees will hate him for not spreading the wealth, his engineers will think he's an idiot (engineers think every non-engineer is an idiot), and his management will think that he doesn't appreciate them enough. But at least his board of trustees will like him... until he doesn't increase already high rates of growth and they decide that they need some fresh blood in there to move forward into the future, and they will end up firing him in the hopes of finding someone who can do better.
I'll grant that the money paid to the CEO could be used to pay for additional worker salaries. However, I would also like to point out that Alan Mulally is responsible for some 164,000 employees, $129 billion in revenue, and $6.6 billion in net profit. He needs to ensure the revenue keeps coming in and the profits stay up so that he can keep those employees as employees. If he can't do that, then the board of trustees needs to fire him immediately and find someone who will.
So if Mr. Mulally needs to keep up the revenue and the profits, then he'd better know a thing or two about money and how to make it. Which means that he had better know that he should make it while he can. You can say that a CEO should just be paid a dollar a year. But who would do a job nobody wants, managing a bunch of people who can't stand you, taking care of a bunch of numbers that are commonly considered to be "the root of all evil". Besides, if the man with ultimate authority in your company is only worth a dollar, he needs to be fired and replaced with someone who will provide actual value. And if the person you hire doesn't give $18 million a year in value to manage your $129 billion in revenue, then the board of trustees needs to fire him immediately and replace him with someone who will.
So what about selflessness and sacrifice? Well, what about it? Dollars don't have feeling, they are just dollars. And anybody who got into the position of CEO of a major corporation had better know quite a lot of things about dollars and they had better want them. Because if they don't care about or want dollars, then they are not going to take care of the dollars that allow the employees to continue getting paid. And if they care about and want dollars, then they are going to want some for themselves. And any decent CEO who cares about dollars knows that his leadership had better be giving a lot of value to the company he is running. And if he is giving a lot of value to the company, he had better be getting a lot of value back in return; this isn't charity work, this is a business. And if he doesn't make a good amount of money as CEO, then he will take himself and his money-making knowledge, interest and skill someplace where they will actually make money for him. And that would leave the board of trustees with a need to pay the next guy more so that he will have some motivation to stick around.
Look, I don't like a lot of things that the wealthy do with their money. And I don't like a lot of the things that they do to get it. And I don't like the fact that they often hold strings of power through their money. But I also must accept the fact that they hold power because they hold what everyone else wants: money. And people have decided that the only way to get money is to get money from the monied.
People want to get it from the rich people. People want to get it from the wealthy corporations. People want to get it from the government that doles it out. Instead of learning about money and how to get it, people just take whatever they can get from those who have it. And those who have it hold power over those who don't because people perfectly accept this doling-out situation as their only method of income.
So maybe if we wanted money itself, rather than the stuff we can buy with it, then we would keep it rather than spending it on crap. And maybe if we learned about money and its movements, rather than being willfully ignorant about it, we might be able to take care of it and build it up, rather than waiting for other people to hand it to us. And maybe if we treated money and commerce as a vital field of study, rather than as a grotesque and evil field of vile money-men and tedious, unfeeling bean counters, then maybe we wouldn't have a problem with people who are actually good at dealing with the stuff.