RUSH: To North Alexandria, Pennsylvania. Nathan, you’re next. It’s great to have you here on the EIB Network. Hi.
CALLER: Hey, how you doing, Rush?
RUSH: Fine. Thank you.
CALLER: Good. I just wanted to say my brother is going to be real jealous. (chuckles) He listens to you like all the time, and I don’t think he’s ever gotten on the show. (laughing) But anyway, my comment —
RUSH: What’s your brother’s name?
CALLER: My brother Jason. He lives in Jacksonville, Florida.
RUSH: Oh, Jason. He lives in Jacksonville. Hi, Jason.
RUSH: Well, his time is coming.
CALLER: Yeah. There you go. There you go. But I just wanted to say, the one thing about this I do agree with, is Obama trying to get these bonuses back from the AIG execs, because that’s our money. That’s the taxpayers money. I don’t think their bonuses should be funded with taxpayers money.
RUSH: Let me ask you a question.
CALLER: That’s just my thought.
RUSH: Wait a second. Wait a second.
RUSH: Now, now. I’m very serious about this, Nathan.
RUSH: I’m very serious. You have a company. Let’s take AIG out of this, because they’re so emotionally charged. Let’s say that the company being bailed out is the XYZ Widget Company.
CALLER: All right.
RUSH: We’ve determined that we need to bail out XYZ Widget. XYZ Widget has people that work there.
RUSH: We’re going to bail XYZ Widget out because we need XYZ Widget to continue operating as an ongoing business.
RUSH: We need to manufacture widgets and sell widgets and so forth. So why in the world, or how do you get to the point that you’re going to bail out the company, but you don’t want the employees to get paid?
CALLER: No. Have the employees get paid, yeah, but… I mean, bonus? A bonus for tanking?
RUSH: No, this is not just executives, but executives are employees, too, and in —
CALLER: I understand that.
RUSH: — many of these firms, Nathan, their salaries are pretty small. They work on bonuses, via contract based on merit. Now —
CALLER: Tell you what I would love to have their salaries. We’ll switch salaries. I guarantee you, they would not be happy with my salary. (laughs)
RUSH: Well, now, that’s… Can I talk about that with you, too?
CALLER: Okay, go ahead. Go ahead.
RUSH: What’s stopping you?
CALLER: What’s stopping me from what?
RUSH: From having the kind of money that these people make, in your mind. What’s stopping you from making it?
CALLER: Well, basically I — I haven’t gone back at school for it yet, to tell you the truth, and I haven’t really been in that type of business for very long.
RUSH: Well —
CALLER: The main thing is —
RUSH: How old are you?
CALLER: How old am I? I’m 31 years old.
RUSH: Thirty-one. Your whole life is ahead of you. You can go back to school, if you want to earn…. What do you want to earn? What would you want to earn per year? Forget the bonuses, forget anybody else. What would you like to earn?
CALLER: Um, honestly, it really wouldn’t matter how much I learn as long as I live uncomfortably.
RUSH: No, it matters, because you’re upset that some of these people earn. You just said you’d love to have their salaries even though you don’t know what they are. So don’t be embarrassed to give me a number. There’s nothing wrong.
CALLER: Oh, I would love to earn about 200, 250,000 a year. That will be perfect.
RUSH: You want to earn 200,000.
RUSH: Two-fifty a year. Well, no, you want to earn $240,999 so you don’t get the tax increase. But you want to earn 250. Do you know what? And I mean this from the bottom of my heart, Nathan. The only person stopping you is you. There’s 250 —
RUSH: He hung up! Damn it, he hung up. Right? Nathan, if you’re listening, there’s $250,000 out there for you, Nathan. If you really want it, if you really want to earn that kind of money, it’s out there. Now, it’s going to take — I’m not being insulting. It’s going to take hard work. I’ve got a story here in the Stack from the Wall Street Journal, there’s a great book out there called ‘Outliers’ and it talks about success and hard work. It talks about people. ‘Are they born special? Do they just have special talents? Why are they so successful?’ They found out it takes 10,000 hours, and ten years of concentrated hard work. It doesn’t just happen even in the case of athletes. But the point is, Nathan, find out what you want to do. There’s $250,000 out there for you if you want it. This is the United States of America. There still is that chance. It hasn’t been destroyed yet.
And, Nathan, I tell you this from the bottom of my heart: you’re only putting obstacles in you’re own way when you’re worried about what other people are making, ’cause I guarantee you, whatever amount of bonus money these people at AIG are getting, your share is probably less than a penny. So whatever they’re making, they’re not taking from you. There’s a whole bunch of millions of taxpayers, if you want to divide how much money the taxpayers into 165 million. Don’t get sidetracked by what other people are making. You want to make $250,000? You live in the United States of America. It’s there for you. You target what you love; target what you want to do. Go do it better than anybody else, work hard for it, and it’s there. It’s there for a lot of other people, why not you? The only person holding you back, Nathan, is you — and that’s true for everybody. I don’t mean that in a personal sense.
RUSH: Now, how do people in this country get paid? This goes back to our call from Nathan. Nathan was all upset about these bonuses, he agreed with Obama, get the money back. It’s his money and every other taxpayer’s money. Well, how is it going to help you, Nathan? ‘It won’t. It’s just fair. They’re using our tax money to pay these people.’ And I said, ‘Well, you know these people work on pretty low salaries and most of their income is based on bonus.’ He said, ‘Well, I’d love to have their salaries.’ I said, ‘Well, how much money do you want?’ ‘Well, I don’t want to mention anything.’ I said, ‘Mention a number. There’s no wrong answer here. How much would you like to earn?’ He said $250,000. I said, ‘Well, you want 249,999 so you don’t get the tax increase, but I get the number.’ I said, ‘It’s out there for you.’ He probably doesn’t believe me. But if you want to make $250,000, it is out there.
There is $250,000 a year for you out there. It ain’t easy. It doesn’t have your name on it yet, but there’s $250,000 out there for you if you want to it. There’s a $175,000 if you want it. There’s also $50,000, and if all you want is $30, that’s pretty easy. And how do people in this country get paid? The Marxists, the socialists, the communists, they have a belief that products are worth only what the labor to produce them costs. That’s why they think it’s ridiculous for an automobile to cost what it costs ’cause they think a car should only cost what it costs to make it, the labor involved. That is not realistic in any way, shape, manner, or form. That belief is one of the foundations of Marxism, communism, collectivism, whatever you want to call it. All products, regardless what they are, including your services, the only value is relative to the amount of labor involved. That’s not how people get paid in this country. People get paid — at least in capitalism — based upon the value of their work to other people.
If you work for me, for example, and I assign you to do something I no longer have time to do, but I need you to do it almost as good as I do, knowing you can’t do it as well as I do, but almost as good, and let’s say I determine that in terms of my time and my desires, let’s say I’m going to pay you a hundred thousand dollars to do that, it is silly for anybody to start assigning, ‘Well, is that job worth a hundred thousand?’ It is to me, and I’m paying it, and that’s all that counts. Somebody who does the same thing for somebody else may make minimum wage, as an example, may make 50, whatever. May make more. It’s worth what I’m willing to pay somebody to do it. By the same token, if you manufacture a product that I have to have, that I just really want, then that product is worth what I’m willing to pay for it, not the sum total of what it costs to make it. We have plenty of products that do end up being priced that way, but that’s because of competition, not because of some moral concept that’s forced on people. The communists, the Marxists, the collectivists all assume that everybody’s work is identical, their output is identical, that everything ought to be the same and everybody ought to make the same.
Communism, socialism, whatever you want to call it is just totally absent of human nature. So if you want to earn $250,000 a year, you have to find somebody to whom your work is worth that or you have to come up with a product or a service that a number of people are willing to purchase to allow you to earn that kind of money. This is how it’s done. ‘But, Rush, but, Rush, what about teachers?’ Ah. Love the question about teachers. I love the question about union people. ‘Are you saying that people are only willing to spend $50,000 a year for teachers?’ No, I’m not. If I ran my own school, and I wanted it to be the best damn school out there, I would do this. I would pay whatever it took to get the best teachers and then I would charge parents who are going to send their kids appropriately. It would work because my competition’s the public school system, where more and more parents wish they had the opportunity to get their kids out. So a teacher makes $50,000 in the public school system, A, they know that going in — when they go to school and want to be a teacher, they know what it pays, and they do it. They’re also unionized and when you’re a member of a union, your individual worth is canceled out.
If you like unions, you want to be part of it all, my blessings. But you cease being able to provide individual value as a member of a union. The only way you can increase your wages is to hope somebody negotiates you a new deal or work your fingers to the bone in overtime and hope that the business you’re in doesn’t go belly up. If you really want to earn $250,000 a year, you have to find a way to make yourself worth that to somebody. It takes a lot of work, takes hard work, takes ingenuity, takes desire, passion, commitment, and not to the money. It takes desire, compassion, commitment to what it is you love doing. The money will come eventually if you end up doing what you do, as well as or better than the people who are considered the best at it. The only person stopping you from being able to do that is you. Yeah, there are lucky breaks that people get, it happens. But there is no substitute for hard work. There’s no substitute whatsoever for hard work. The more valuable you make yourself, let’s say you work for somebody, find a way to get yourself directly involved in the revenue stream of that company.
Make sure that your boss knows that a good percentage of that revenue that he gets as the owner of the company is because you’re there. You will then have value. But if you say, ‘Okay, I want to do that because it pays X.’ There’s no job that pays $250,000 a year. There are plenty of jobs that pay $30, plenty of jobs that pay $50, plenty of jobs that pay $60, but when you start talking about earning $250,000 a year, you’re talking entrepreneurism in one way or another. There are salaried positions of $250,000 a year, don’t misunderstand me. But you don’t go to vo-tech for it, you don’t go to shop class, you don’t go to government reeducation centers and so forth. You might start off in the mail room. You gotta love it.
RUSH: We’ll grab a phone call here before we have to go to another quick break. Jeff in Bristol, Pennsylvania. Hi. You’re on the EIB Network. Welcome.
CALLER: Yeah. Hi, Rush.
CALLER: Eh, um… Sorry. I was busy working. I just had an issue about the bonuses.
CALLER: Aren’t these guys the… you know, worked and performed to get those bonuses?
RUSH: Yes, according to the contracts. That’s my whole point. They’re doing what they do!
RUSH: These guys went out, they sold whatever it is they’re selling, insurance products or whatever. They met their contractual requirements, and they’re being bonused for it. This is why we bailed them out! This is what we do. If we take the money away from them, think of all the tax revenue New York City and New York State are going to lose, the $165 million that doesn’t get into circulation.
CALLER: Well, not only that, but the list that they’re putting together of all these guys, that would be a job search list, to me, because they’re the good ones. They’re the ones that are making the money. You know, only idiots are going to be left there —
RUSH: Wait a second.
CALLER: — because they’re going to leave.
RUSH: Now you’re on to something. I know you think you’re on to something, but you’re not. You think Andrew Cuomo wants these people singled out ’cause they’re doing good jobs, or does he want ’em singled out because they are thieves?
CALLER: Well, that’s the way it’s going to be portrayed.
RUSH: He’s trying to tarnish these people’s reputations!
CALLER: Exactly, but if I was a good CEO of a company, I would look at that as performance. I would look at that for a job list.
RUSH: The CEO is going to say, ‘Oh, my God, this guy is radioactive. He got subpoenaed by Andrew Cuomo! If I hire this guy, who knows what government agency is going to start looking at me?’ This is hideous, what’s happening here. This is my point. The bad guys are being portrayed as the fall guys.
RUSH: I want to add a couple things here to this whole discussion of making $250,000 a year, since that’s what Nathan said he wanted to make. In the first place, there are two kinds of people. There are people who get ‘paid,’ and there are people who are ‘compensated,’ and it’s different. You get ‘paid’ for doing a standard, ordinary, everyday job. There’s nothing wrong with that. I don’t want anybody misunderstanding this. Compensation is a direct relation to the value of what you produce. For example, the teacher. This is a question that I love getting. ‘But, Rush! But, Rush! We value teachers. Teachers are so important! Teachers are just so important, and we put such a value on education and we don’t pay them very much.’
Compensation comes from how rare the ability you have is. It comes from how rare your work output is. It comes from how rare your ability to do a job is, not how ‘important’ the job is. We have never structured compensation on the basis of importance. After all, could somebody please tell me, in the big scheme of things, what is the real importance of Alex Rodriguez and $270 million over ten years to the New York Yankees? To the Yankees, pshew! It is crucial. But to our society, to our country, just how important is it, really? Just how important is it that Julia Roberts make $20 million a movie? We don’t pay people on the basis of importance. We pay people on the basis of value. Julia Roberts gets twenty gazillion ’cause she makes far more than that for whoever is paying her.
Same thing with Alex Rodriguez. He gets his $270-million-a-year contract because the New York Yankees were essentially able to expand an entire cable television network on his back. They had it when they got him, but the subs went up; the revenue stream increased. Some might be able to make the case Alex Rodriguez is underpaid. But it’s acceptable to him, so the deal was made. Now, if you are one of these people and you want to earn 250 grand, I have another earth-shattering fact for you. Some of you in this audience who want to earn 250 someday will, and when you do, the dirty little secret is, you are more likely to be underpaid than fairly paid.
If somebody is willing to pay you 250, you might be worth three. You might be worth 350. You’re going to think you’re worth more. No matter how much anyone is compensated or is paid, they always think they’re worth more. But thinking it and proving it are two different things, because you don’t make $250,000 in this country without being worth a whole lot more than that. This way of thinking, these kinds of theories are not taught to anybody. In fact, old Nathan, who called about 50 minutes ago, I guarantee you when he heard me say, ‘There’s $250,000 out there for you,’ thought, ‘Oh, yeah! Right, man. Ha-ha-ha. Tell me another one.’
I’ve often found it fascinating, when I was younger, to go to a dinner party or whatever, and just go round the table and ask whoever, ‘What’s big money?’ You’d be amazed at the numbers you get. And back in the days when Merrill Lynch was a big, ongoing concern and they weren’t hated and despised, they had a theory when they were interviewing people. They’d bring in prospective account execs or whatever, and ask ’em, ‘What do you want to earn here?’ And if they gave a number, they were disqualified. Not that they were told. The interviewer just made a little checkmark, ’cause the theory is that if you say, ‘I want to make two million,’ that you’ll stop there. That’s your comfort level, and they wanted people to whom the sky was the limit. So I guarantee you: you get the 250, and you are going to think you’re underpaid. You won’t be miserable or unhappy unless somebody doing less than you do is getting more. But these are just the facts of life. This is just the way it is, and we don’t pay people on the basis of their importance.
‘But, Rush! But, Rush! I’m really important.’
Why? Why are you important? If you are important to some outfit, it’s because you have value. It’s not because you do the job. It’s ’cause of how you do it.