How rich have America’s rich become? So rich that they can squirrel away $100 million and then lose track of it.
Steven Mnuchin, the Donald Trump nominee for U.S. treasury secretary, did just that earlier this month.
Mnuchin’s explanation for missing all those millions? The official disclosure questionnaire made him do it. All cabinet secretary picks have to file paperwork on their personal financial holdings, and Mnuchin dutifully filed his required records after his nomination. But subsequent review revealed that the one-time Goldman Sachs partner who went on to even greater hedge fund glory had failed to disclose assorted personal assets worth over $100 million.
“I think, as you all can appreciate, filling out these government forms is quite complicated,” he told a Senate hearing.
That big, round $100 million figure came up again last week with another Trump administration top pick. Gary Cohn, the administration’s choice to head the National Economic Council, used to be the president and chief operating officer of Goldman Sachs. Cohn resigned those positions to accept his new Trump position. But he won’t be walking away from the bank empty-handed.
On Tuesday, news reports related that Goldman Sachs would be blessing Cohn’s service with a $100 million windfall. By Thursday, more disclosures had swelled that reward to $285 million in stock and cash. This quarter-billion-plus comes over and above the $20 million the bank has already paid Cohn for his regular 2016 compensation.
Will Cohn, following his Goldman confrère Mnuchin, now lose track of his new millions? Would you — if someone dropped $100 million or more in your lap?
Probably not. The average American with a college degree, over the course of a working a career, will only collect a grand total of $2.1 million in paychecks. The average American high school grad will earn $1.2 million.
Most all of this paycheck income, in both cases, will go toward meeting daily expenses. Not much will be left over. In fact, the typical 401(k) account of Americans aged 55 to 64 now holds just $71,579.
So Gary Cohn, with his latest $285 million from Goldman Sachs, is walking away with nearly 4,000 times the reward for a lifetime of labor that goes to Americans of modest means.
Something must be done about this enormous disparity in corporate pay. Many people are doing something. Among them: Rhode Island lawmaker Aaron Regunberg. Representative Regunberg has just introduced a measure that would, if passed, become the first-ever state-level tax on excessive executive compensation.
Regunberg’s proposal would place a 10 percent business surtax on publicly traded corporations that pay their top execs over 100 times what their median — most typical — workers earn. Firms that pay their top execs over 250 times worker pay would face a 25 percent surtax.
“The spectacular concentration of income and wealth among the top 0.1 percent hurts our economy and corrupts our democracy,” Regunberg noted when he and five colleagues filed the excessive pay surtax legislation. “Nobody needs to receive more than what their employee would earn in a century.”
Early last month, in Oregon, Portland city officials adopted a similar pay ratio surtax on excessive corporate executive compensation, the first-ever municipal move against America’s gaping corporate pay divide. A host of other cities — led by San Francisco — have since then begun exploring actions along the same line.
So far, meanwhile, no one seems to have asked treasury secretary-designate Mnuchin what he thinks about this notion of levying extra taxes on companies that pay their CEOs excessively. But Senator Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, did ask the Goldman Sachs alum whether he thought having CEOs making hundreds of times more than their workers rated as “fair.”
Shareholders, Mnuchin responded, should determine how much CEOs make.
“I don’t think it is the proper role of the federal government to prescribe limitations,” added Donald Trump’s choice to run the federal government’s entire financial apparatus.
Fortunately for the rest of us, the United States also has a good many local and state governments. And they — increasingly — have some different ideas.