UK Labour Leader Slammed For "Totally Idiotic" Salary Cap Plan

Tyler Durden's picture

UK Labour Party leader Jeremy Corbyn has a brilliant idea to 'fix' the supposed income-inequality problem - impose a maximum limit on how much people can earn in Britain. This proposal was immediately met by derision by economists and leaders as "incoherent", "it doesn't make any economic sense at all, and "totally idiotic" - all of which are completely correct.

As The Telegraph reports, Corbyn told the BBC Radio 4 Today program...

"If we want to live in a more egalitarian society and fund our public services, we cannot go on creating worse levels of inequality...

 

I would like to see a maximum earnings limit quite honestly, because I think that would be a fairer thing to do."

 

Mr Corbyn refused to say at what level the cap should be set, although he later told Sky News it would be "somewhat higher" than the £138,000 he earns as an MP and Leader of the Opposition.

However, before we move on to the responses to this proposal, it turns out that the income gap between the richest and poorest people in Britain is at a 30-year low, new figures from the Office for National Statistics (ONS) show.

 

Disposable income for the poorest fifth of the population in Britain rose by £700, or 5.1%, last year according to the ONS while disposable income for the richest fifth fell by £1,000, or 1.9%.

But those are just facts. Corbyn's plan has been branded "totally idiotic" by a former top economic adviser.

Academic Richard Murphy, who advised Mr Corbyn during his leadership bid, said the proposal was "incoherent".

 

He told World At One: "It doesn't make any economic sense at all. You cannot impose such a cap."

 

"Jeremy needs to sit down and get some proper advice. Whoever is advising him now is not giving the right advice or Jeremy isn't simply asking them before making these comments."

 

Asked if the Government would consider taking up Jeremy Corbyn's wage cap proposal, a spokesman for the Prime Minister has said: "It is not a policy we are pursuing."

 

They added that they had "not seen the details of what is actually being proposed".

 

Danny Blanchflower, a former member of the Bank of England’s monetary policy committee and a former member of Corbyn’s economic advisory committee, has taken to Twitter to describe the wage cap proposal as "totally idiotic" and a "lunatic idea".

Ouch!

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Haus-Targaryen's picture

As someone who would like to see Germany do better than it currently is, go Mr. Corbyn go.  

To all the ZH readers in the UK, when the UK does decide to try out Socialism, please consider Germany.  We'll have sorted this Muzzie invasion by then, and at the end of the day, you are Anglo-Saxons, who can trace your roots back to Sachen/Sachsen-Anhalt/Niedersachsen in Germany. 

In a way, you'll be coming home after a 1,000 year vacation. 

IReallyDontCare's picture

 Jeremy Corbyn as Prime Minister is as likely as a Clinton presidency.

boiow's picture

It is far less likely than that.   Clinton almost got in.  Corbyn will Never get in.

CuttingEdge's picture

Will Keith Ellison garner as many belly laughs as Jeremy Corbyn?

The parallels between the fucktard left in the UK and the future of the Democratic party in the US are there for all to see.

HowdyDoody's picture

Banksters deserve unlimited compensation for saving the economy.

 

americhinaman's picture

anyone who relies on a salary is not part of the elite, banker or otherwise.

Praeda2's picture

The fact it was Obongo's last makes it all the sweeter.

Praeda2's picture

Jews bro, Jews. Nothingness IS their thing.

Haus-Targaryen's picture

I appreciate this.  

Just an idea for all you guys across the channel to think about if things go south there.

uncle_disgusting's picture

And our royal family is German anyhoo - the Saxe-Coburgs...

edit: P.S. I already checked-out of Hotel UK - Deutschland ist sicher schön, aber es scheint dass die Steuern ein bisschen zu hoch sind...

Troy Ounce's picture

"In a way, you'll be coming home after a 1,000 year vacation".

Only if there is a cheese pizza with walnut sauce wrapped in a handkerchief.

ramius's picture

ooh nooo, thank you verry much. As long as Merkel is anywhere near the political arena, "Wolfenstein - The New Order"is still censored, kebaps are welcome and the stick is faaar up the native german's arses, you won't see any descendants of common ancestors even remotly considering a return to the "Vaterland". We'll just stay put and conserve the original germanic values we still posess, like hard work, order, nationalism and loyalty to each other, without snitching on the neighbour. Damn that may be just my hungarian half speaking, but you get the point. Germany today  is not "Germany "as it entered the legends, as a place of things well done, good beer and culture. Sadly, it becomes more and more the place of "good enough", pisswasser and multikulti. Better get used to it, cos there is no way back. 

koan's picture

I hope you do "sort out" the muzzies, but you've been under the thumb of history for so long, one wonders if your people have the chutzpah necessary.

floosy's picture

Jeremy Corbyn.

Lol.

He is well on the way to taking Labour from being the second largest party in parliament (and the official opposition to the Conservatives) to electoral oblivion.

Squid-puppets a-go-go's picture

Sorry, Tyler, I gotta agree with it.

If the only way you can pay a banker a quarter of a billion pounds is to print the money, then limit the salary and keep the printers turned off thank you very much

Stanelli's picture

Bankers? By all means! But this is just a starting point. You don't stop the fight for social justice here, before you achieve it, do you? So the next step is to go down with the idea. First bankers, then CEOs, high managers, engineers and so on... until what we get is equally poor mass of equal prols.

rondellio's picture

Justice is a word we understand.  What is "social justice"?  

BitchezGonnaBitch's picture

Any reason why a C-level exec for a rail company, which has to subsidised by the UK govt to stay afloat, should get 200+ times a higher salary that a back office admin? What essential skills do they display to earn that ratio? Use yer feckin head sometime.

rondellio's picture

There's a cause for that 200K and you mentioned it-govt subsidies.

burocracy's picture

Bring on the morons!

Stanelli's picture

Say 'hello' to communism, because that's how it works. People become equal. Equaly poor that is!

Good job SJWs!

Economy-X's picture

No, he didn't ask for everybody to be paid the same, he asked for a cap so that people such as CEO's can't abuse their market power to overpay themselves by copious amounts. 

rondellio's picture

Why isn't 138k-Corbyn's wage-a case of overpayment?

Praeda2's picture

Except Communism isn't the end game. It's simple the step before absolute despotism. White genocide followed by some mud race that Jews rule with an iron first in a hellish existence the likes of which have never been seen before.

Economy-X's picture

The powerful always say anything that threatens their benefits is idiotic. And since when did zerohedge start listening to so-called "economic experts". These are the same experts who give us negative interest rates, and WE for zombie banks, and a whole load of other crappier that supports insider trades. Corbyn's plan is in fact very coherent and potentially effective, but only if all advanced economies implemented it. There is no sound economic reason why it would not work, which is precisely why our above expert had to revert to name calling instead of analysis. People would still have incentive to work harder to earn the top wage, while everybody would get a fairer share.

 

Instead, today we see CEO's getting hundreds and even thousands of times more than their lowest paid employees, and massive increases over last thirty years for doing more or less same job. Theft pure and simple. The only idiots are those who let the nobility each from their table for free everyday

Praeda2's picture

10/10 troll, otherwise you're a mental patient.

Batman11's picture

Reasons to be optimistic.

Leaders with two brain cells to rub together could get the economy back on track in no time.

It is hard to get a return on capital today; you have to pay people to take it off your hands with negative yields.

This is what excessive inequality looks like.

The world is full of pent up demand, a majority of consumers would like to have the money to be able to consume more.

There is a shortage of demand in the system due to those at the bottom not having enough money.

Where is all the money?

2014 – “85 richest people as wealthy as poorest half of the world”

2016– “Richest 62 people as wealthy as half of world’s population”

Doing the maths and assuming a straight line …….

5.4 years until one person is as wealthy as poorest half of the world.

Inequality is horrendous and getting worse.

What can we do?

Redistributive taxation just like we used to have when we had the lowest levels of inequality in recorded history (1950s - 1970s).

It’s not rocket science is it?

If we could find leaders with two brain cells to rub together the economy would be back on track in no time.

Reasons to be pessimistic.

If leaders had even the tiniest amount of analytic capability they would have done this already.

There are no leaders with two brain cells to rub together. 

rondellio's picture

Maybe there is something inherently wrong with "leaders" - and the people who look to "leaders" for deliverance?

 

LyLo's picture

Probably so.  In the meantime, it's kind of inherent to primates so not like we're getting rid of this drive soon.  I'd recommend finding something to fret about that's a little less innate to the species, or you'll find that you're pissing in the wind. 

(Friendly heads up from someone on that same jag a little over a decade ago: you'll eventually notice that every 'leaderless' movement actually has a leader, and boy are they sitting comfy while vehemently denying their power.  Best just to be open about it, so a little oversight is possible.)

css1971's picture

The problem is, was and likely will continue to be the monetary system. The way money is created. It should be illegal. It's fraud.

Money is a public good.

 

There are no leaders with two brain cells to rub together.

 

You assume stupidity. I don't see how. It has to be malice.

stljoe's picture

This is utter nonsense. We did not have redistributive taxation in the 50's-70's. We created the AMT because the wealthiest were paying nothing at all despite the headline tax rate. This is simply a delusional talking point unmoored from reality.

RabbitChow's picture

There are salary caps in the US federal government. I haven't seen too many complaints about the salary cap at 160 k for most folk (if they can ever reach that level). So there's a minimum wage and a maximum wage. I guess if you don't like the rules, don't play the game.

Praeda2's picture

That's the public sector you twat.

If you don't like being enslaved just kill yourself huh? Why are you even here if you don't make a lousy 160k??? GTFO poor fag.

BitchezGonnaBitch's picture

Knee jark twattery yet again from you, Tylers. Inject some thought, at least, don't just tell us what the Telegraph told us. He's not entirely wrong either. 

Praeda2's picture

Yes, yes he is and if you knew the absolute basics you moron, you would know that as well. It's not even something to dignify with a real answer. Just insults because it's moronic.

rondellio's picture

These timid vacuous politicians!  The mean wage in UK is about 26K, so how is a maximum above 138K "equality" and "fair"?  It isn't.  The correct position for Corbyn and any equalitarian is this: every adult gets the same income.  If that works out to, say, 30K a yeart then that's what a floor sweeper and a football star both get.

This is a losing proposition but it's the only honest way to be an equalitarian.

css1971's picture

The Labour party aren't going to see power again in the UK I think in my lifetime and this kind of shit from Corbyn isn't going to help them. They used to rely on Scottish Labour support to get them into power. But Scotland has gone SNP instead. Labour, like the Conservatives are being wiped out in Scotland.

Good thing too. They're all morons.

What we're seeing is the resurgence of real classical liberalism. Not the American liberalism=socialism crap, but the real thing.

70 years is more than enough time to discredit socialism, but the real problem remains fascism.

 

So, the conservative party in the UK is going to rule until a credible alternative (a real Liberal party) grows up to oppose them.

 

rondellio's picture

I'd like you to be right, but don't see it.  What makes you so optimistic?

Grandad Grumps's picture

No. Just make compensation shares illegal. No free stock. No free options. Make it so that execs and board members must buy shares to own them.

It has always been wrong for execs and board members to embezzle company wealth by voting themselves shares. Eliminating free stock and options will also have the benefit of eliminating the leverage banks have over company management and stock price fraud abuse. No more back room deals for price manipulation.

I suppose there can be other rules tied to bonuses and such, which should be related to real, not fake performance, but free share abuse is the biggest thing.

rondellio's picture

Why not improve shareholder control?

Singelguy's picture

The majority of shares are owned by pension funds, hedge funds, insurers and other financial institutions. As long as they are getting a decent ROI, they don't give a shit.

rondellio's picture

Good point.  But if the ROI is good then the CEO is doing his job.

I'd agree there is room for pension funds to make decisions in a way that makes them accountable to their beneficiaries. 

 

Singelguy's picture

The company might be doing a good job despite the CEO. Big corporations are like big government; they are very slow to change. The point is that CEO compensation is a drop in the ocean in the overall scheme of things. I am more concerned with what the CEO's and boards do with the profits that the corporations generate. Borrowing money to buy back shares at inflated prices instead of investing in R&D and the long term growth of the business is cause for great concern going forward.

rondellio's picture

It might...and it might not.

Buying back shares at inflated prices wld not help ROI.

I'd say rather big corps are big govt.  A better allocation of resources-your point, and I agree with you-can be achieved by making it easier for newcomers to enter the mkt.  This is exactly what big corps don't want and why they need regualtory control and big bank support.   

Praeda2's picture

Why not have the government run the company? That's what the Commie wants.

You're a fucking idiot. I've seen your bullshit before. You need to STFU and learn something before opening your spic piehole with your basic bitch bullshit questions.

effendi's picture

The article is a bit misleading when it states that the gap between the richest and poorest is declining. Defining the richest as the top 20% of incomes overlooks the reality that those at the 80-90% income levels are only typical low-mid management and proffessional people and might be having stagnant incomes. They also have little in common with the 99% level (the 1%ers) and nothing in common with the billionaires (the .001%ers)

DeeZ_nutZ's picture

CAP THE PAY AND USE THE SAVING TO BUILD MOSQUES, BITCHEZ!

quadraspleen's picture

Love that horizontal graph arrow. It totally ignores the vertical gulf between the lines. Yeah, sure, the rubes are being fucked over marginally less than they have for 30 years, but way to obfuscate an issue. No,I don't believe in wage caps at all,but I also don't believe in economists or some of the shite that the ONS puts out.