In 2009, long before the Occupy Movement brought the issue of income inequity into the national spotlight, Dr. Murray C. McClellan, founder of The 40x Rule, published this editorial in the Washington Post:
"A different kind of pay cap for Wall Street
Tuesday, October 27, 2009
In his Oct. 23 Business column ["Pay restrictions may not fix underlying risk-taking"] about the Federal Reserve's and the Treasury Department's imposition of pay limits on some Wall Street executives, Steven Pearlstein correctly noted that these measures, proposed "to contain growing populist anger," will probably not have their desired effect. But Mr. Pearlstein, and indeed almost all who have commented on this story, miss the real point.
The popular anger over obscene Wall Street salaries and benefit packages is not directed toward how they provide incentives for risky trading practices; it is about how they are one part of the dangerously escalating divide between the wealthy and the poor in this country. What is needed is not a cap in executive pay but rather equity in pay throughout a company.
No one in the federal government makes more than 40 times what the lowest-paid worker earns. Let executive pay be as high as it can be, as long as it is not 40 times what the cleaning staff gets. Like an eight-hour workday or restrictions against child labor, we should make the 40-times pay rule the law of the land.
Murray C. McClellan, Annapolis"
America ought to be, and historically has been, a country in which every citizen has an opportunity for success. Yet since the end of World War II, income inequality has been spiraling out control, having been made only worse by Reaganomics and the Bush tax cuts for the wealthy. The richest of the rich control a disproportionate amount of the wealth, and the middle-class and especially the poor control very little.
This is not to say that there should not be an upper class and a lower class, nor that we should convert to a socialistic, government-controlled economy. Absolutely not. It is, however, crucial that steps be taken to correct the gross injustice taking place every day in this country--CEOs raking in millions and, in some cases, billions, as everyday Americans lose their jobs and find it difficult to pay the rent or feed their families.
This is America, and it goes against our principles to place an upper limit on success. Anyone should be able to make as much money as he or she has the ability to make--this has been one of the guiding principles of our country and economy, and we do not propose to change it, merely to expand it. Anyone should be able to make as much money as he or she has the ability to make--as long as we are not leaving people behind.
Some might say The 40x Rule will de-incentivize corporations to earn money. We respectfully disagree. Too often we see the CEOs and other high-ranking officials of corporations giving themselves large bonuses even as their companies are tanking. What is the incentive of the wealthy to keep working when they can award themselves as many bonuses as they want, and what is the incentive of the lower-level worker if the benefits never trickle down to him? The 40x Rule, by providing a standard income equity, incentivizes everyone to strive for success--because, finally, everyone will have a share of the benefits.
Many prominent conservatives have spoken of the "trickle-down effect"--the idea that if the wealthy have enough money, it will "trickle-down" to the poor and middle-class. Unfortunately, this has been proven nonsense. The 40x Rule ensures that everyone IS, in fact, getting at least a trickle.