Getting What You Pay For

Thomas Sowell writes:

….The money that can be saved by limiting CEO pay is chump change compared to the money that can be lost because you cannot attract top-notch talent.

Congress itself is a classic example of what can happen when penny-wise policies restrict the caliber of people who can be attracted.

No top-level doctor, lawyer, economist, engineer or CEO can become a member of Congress without taking a big pay cut, perhaps costing that person’s family millions of dollars over a lifetime.

On the other hand, if you paid every member of Congress a million dollars a year, it would cost less than the cost of even a small government boondoggle, much less a whole agency.

It is not that the turkeys in Congress today deserve a raise. They don’t even deserve their current pay. But that is the very reason for attracting different people. Cheap politicians are actually very expensive and the same principle applies to CEOs.

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