Why executives make the big bucks

Socialists suffer seizures when the subject of CEO salaries surfaces. They never tell us how much more money than a janitor a CEO should make, so it’s clear that no matter what the salary they will harm themselves by their extreme response if it is any higher.

British socialists are advertising their envy in a new report “of companies that Theresa May said risk damaging ‘the social fabric of our country’ by paying bosses too much money,” according to comments by the Adam Smith Institute. The author explained,

"The public register was published on Tuesday by the Investment Association, a trade body of investment firms that manage the pensions of millions of Britons."

The register lists every company in the FTSE All-Share Index which has suffered at least a 20% shareholder rebellion against proposals for executive pay, re-election of directors or other resolution at their shareholder meetings.

Of course, the source of the outrage is pure envy and no amount of economic reasoning or facts will dissuade the left. But can free marketeers justify the highest CEO salaries? There are two reasons that CEOs earn such salaries: 1) marginal revenue and 2) knowledge.

Brexit! The UK's independence day!

Last week the Brits voted for independence from the European Union. Maybe now they better grasp why we colonists divorced King George over 200 years ago.

The Adam Smith Institute has the best pieces on Brexit here and here and with the video Brexit: The Movie.

I had hoped to avoid writing about the British exit from the European Union because I never saw it as an important event, but the hysteria drummed up by the media has made it difficult for me to keep silent. So here are my two bits.

First, why the hysteria? There are two reasons for it. One is that the media have but one purpose and that is to create hysteria. Fear keeps people tuned in and more people paying attention means greater advertising revenues. The great newspaper editor Mencken once wrote, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” Because he was in the business, he blinded himself to the fact that the media is an accomplice of politicians in crime.