The attitude is very different, of course, when members of the executive class are setting each other’s pay. They claim that the huge increase in their share of total wealth in the 1990s, justified then by the stock market bubble at the time but never reduced once the bubble deflated, is the result of a sacrosanct “free market.” In reality, however, the market in executive pay is just as rigged, but in the other direction. Through the agency of the executive pay consultants they all hire, Boards of Directors inevitably conclude that if the previous deal for an executive was for X, the next executive deserves X plus 10 percent. And then when member of the Board of one company get their pay set in another company, they expect X plus 10 percent plus 10 percent. That is nothing like a free market, and very much like the way public employee pay and pensions are set – more and more for those in on the deal, leaving less and less for those forced to pay, who have no say. And there is no salary cap in executive pay, and no thought of creating one.

The NBA Players had eliminated their union during the conflict with the owners, and will now have to re-form it to sign a deal. They had “de-certified” because without a union deal, what the owners want to do is “collusion” and “against the free market,” and thus vulnerable to an anti-trust lawsuit which the players had filed. With a union, the owners can collude and bargain collectively because the players are doing the same.

There is no doubt that if institutional investors were to do what I advocated, and demand drastic reductions in executive pay with the savings used for higher dividends across all public companies, the executives would sue on anti-trust grounds. Since institutional investors own pieces of all companies, there would be nowhere for the executives left to sell their services for higher pay, unless they did something useful like starting a new company themselves. But in reality it is the owners of those companies who should be filing an anti-trust lawsuit, because the executives have conspired to keep their own pay high – and everyone else’s pay and investor returns low – through the agency of the executive pay consultants.

Note that the kind of salary cap they have in sports does not set the pay of any one player. It sets the pay of players in general, relative to league revenues and subject to the least well paid typically getting a minimum salary and package of benefits. IN the recent NBA deal, the salary cap is apparently around 50 percent of basketball-related revenues for the players. A similar salary cap would set the pay of top executives relative to dividends paid to investors. Just to hand out equal outrages against the entitled, the public employee pension equivalent of a salary cap would limit the pension contribution taxpayers had to make to a certain share of the wages and salaries of those actually doing work on the job. The public employees would pay the rest.

All in all, both the executive class and the political class are lucky that most Americans don’t follow their pay versus performance as closely as they follow sports. Just listen to those calling on a station such as WFAN, and hear their passion and rage when those who are the best paid don’t perform, and the team doesn’t win. If the team wins, they don’t worry so much about pay levels, but when the team loses, the fans feel as though they have been robbed. Because while the team owners are paying, they are paying with the fan’s money. Well guess what: our team has lost, as employees, investors, and citizens (and in particular future citizens) of this state and country. Rather than leading us to victory, those who control our institutions have made out very well, win or lose.

The U.S. has been described as a “winner take all” economy by those who believe that is the working of the market, not power and self-dealing within public and private institutions, that have led the bonus rich and pension rich to become so much better off than everyone else. It would be, they say, un-American to do anything about it. Yet when the winners who take all are a bunch of jocks, because the wealthy men who control sports teams cannot control themselves when over-bidding for them, something is done about it. Someone should ask NBA Commissioner David Stern and the NBA owners if they think a salary cap is appropriate for executive pay.