Today in his blog, Paul Krugman blasts President Obama for comparing banking executive pay to baseball players' earnings. In a recent interview Obama stated, while $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”
Krugman has two main criticisms of the president's remarks. First he notes, "To my knowledge, irresponsible behavior by baseball players hasn’t brought the world economy to the brink of collapse and cost millions of innocent Americans their jobs and/or houses."
Well, maybe not baseball players, but I would direct readers to the recent post here at TSE about the role of the 2004 Olympics in the current economic crisis in Greece.
Second, Krugman writes, "These bank executives are not free agents who are earning big bucks in fair competition; they run companies that are essentially wards of the state."
Sure, but aren't baseball teams also guilty of tugging at the public purse-strings? The "Big Four" professional leagues in the U.S. have received well in excess of $10 billion dollars in direct and indirect subsidies for stadium construction and operation over the past two decades. As a percentage of operating revenues, sports teams are almost certainly more heavily subsidized than financial institutions.
While I tend to agree with Krugman about the banking executives, let's not let the athletes and owners off so easily.