A new poll out last week has some encouraging news for progressives: even Trump supporters are starting to see through his phony populism and questioning whether he is really on their side when it comes to economic policy. His coziness with billionaires and Wall Street insiders is starting to cause discomfort as he moves to cut taxes for the wealthy, including at the expense of healthcare for millions of people. This is another wake up call to Democrats that they have an opportunity to fight back hard against the Administration’s deceitful messaging and Wall Street populism. Yesterday, some Democrats rose to that challenge.
At the behest of “forgotten men” like JP Morgan CEO Jamie Dimon, the Trump administration and Republicans in Congress are going to extraordinary lengths to roll back consumer and financial protections that were put in place after the 2008 financial crisis. One particularly emblematic move is their push back against a rule, set to go into effect this year, requiring corporations to disclose the ratio between their CEO’s salary and that of their median-paid employee. In a recent statement, Acting Chair of the Securities and Exchange Commission (SEC) Michael Piwowar announced plans to “reconsider” the rule’s implementation. He took the additional — and unusual — step of inviting corporations to report on “any unexpected challenges” they may have experienced “and whether relief is needed.”
Wall Street seized the opportunity to complain that the rule is too difficult to comply with, irrelevant, and bad for economic growth. In a letter to Trump, the Business Roundtable, which Dimon chairs, included the CEO pay ratio disclosure rule in a list of 16 regulations they’d like to see on the chopping block. The complaint from this association of highly-paid CEOs working to “foster a healthy business climate” is not only ridiculous, it’s embarrassing. They simply don’t want us to know just how enormous the pay gap is, and expect us to believe that their HR department is two people working with an abacus and a blackboard.
Congressional Democrats are having none of this whining for profit. Yesterday, thirty seven Representatives sent a letter to SEC chair Piwowar saying it would be a terrible mistake to delay or weaken the rule. Representatives who signed on to the letter include: Ellison, Grijalva, Waters, Pocan, Beyer, Blumenauer, Boyle, Brownley, Capuano, Carson, Cicilline, Conyers, Cummings, Danny Davis, DeFazio, DeSaulnier, Evans, Huffman, Jayapal, Kaptur, Barbara Lee, Lewis, Lynch, McCollum, McGovern, Nadler, Norton, Raskin, Schakowsky, Bobby Scott, Shea-Porter, Adam Smith, Takano, Tsongas, Velázquez, Visclosky, and Welch.
The SEC works to protect investors and regular Americans from being taken advantage of by Wall Street. Indeed, the allegation that calculating a company’s median salary is “difficult” should raise red flags for investors about the competence of a company’s management. Contrary to corporate managers’ dismissal of pay ratio as irrelevant and bad for growth, pay ratio data can in fact be instrumental in gauging the long-term soundness of companies. Pay data not only helps shareholders guard their pocketbooks against self-seeking executives, it can be an indicator of excessively risky practices up and down the line, and can help reorient cash flow in a firm to more productive use, including paying workers fairly, which improves morale and productivity. Case in point: we just learned that Wells Fargo executives were awarded more money in 2016 despite the phony account scandal which affected more than 2 million people, and for which they had to pay millions of dollars in fines.
It is heartening that some Democrats are calling out Trump’s Wall Street populism, even if his rich friends are not having too hard a time themselves disrobing the emperor.
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