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I think what the author is getting at here is that CEO pay was in an unstable equilibrium, and that starting in the mid-90's, that balance was tipped, causing "

• aetherson 11y ago
  Klein's thesis is actually that the conditions weren't always there, they were that the conditions were set up by the Reagan tax cuts, but there was about a 10 year delay between the conditions being set up and the trigger. Specifically, he argues that pre-Reagan, it wasn't worthwhile for CEOs to bother to try to get higher pay, because the high tax rates meant it mostly went to the government. I do wonder whether Klein also feels that, say, higher capital gains taxes would mean falling investment because investors wouldn't bother chasing returns if the majority of them went to the government. I also find it unimpressive for Klein to talk about 90% top marginal tax rates and then say that Reagan slashed tax rates. Just to be clear, 90% marginal taxes: 1951-1964. Reagan tax cuts: 1981. Between there: 70% marginal taxes. Does tripling the take-home pay of top earners (from 10% of nominal salary to 30%) not provoke any changes? Finally, what's the word for "post hoc ergo propter hoc," except even lamer because it's not just post hoc it's way way way post hoc? Like, if I don't like 1916's establishment of National Parks, can I claim that they are responsible for overgrazing in the 1980s and it just took a while for norms to be overcome?