Tuesday, January 10, 2012


A friend of mine posted this on his facebook page.  I thought my response might be too long so I am making it into a blog entry.

 The first thing that jumps out at me is the obvious cherry picking going on.  The chart seems to indicate the average salaries of the fire fighter, teacher, police officer and doctor but then instead of using the average salary of all hedge fund managers it only looks at the salary of the top 25.  I have no idea how many hedge fund managers there are but after doing a quick Google search I found this list you can purchase from BarcayHedge which says it tracks 23,700 different funds.  Of course the people who mad the chart know this but they were skewing the numbers on purpose to try and illicit a stronger emotional response from people.

The second thing that comes to mind is the response people seem to have to this sort of thing, which is that 'the government needs to do something about this' and 'that's not fair, where is my piece of the pie'.  I think it is important to step back and remember why these people are able to make the kind of money that they do.  In my mind it is due to the basic constitutional rights to life, liberty and property within the framework of a (semi) free market economy.  It is our system of property rights and freedom which not only enables some to become incredibly wealthy but also allows our standard of living to be one of the highest in the world.  Here is a link to the Wikipedia article on GDP per capita.  As you can see it places the US at number 7 per the International Monetary Fund and the World Bank.

To sum it up, my concern is that the more people start to see the economy as a giant pie that the government can slice up and hand out to people, the more power we give them to do so and the more reliant upon it we become.  There is also an argument to be made for spontaneous order through the free market being superior to that of a centrally controlled economy but I don't have the time to get into it.  Here is a video I found that touches on it.