Sep 23rd, 2009 at 1:02 pm
Shocking Revelation
Does Barack Obama really not know that NFL players are subjected to a salary cap?
36 Responses to “Shocking Revelation”
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September 23rd, 2009 at 1:04 pm
The salary cap is per team, not per player.
September 23rd, 2009 at 1:08 pm
Then it still caps player salaries, just indirectly.
September 23rd, 2009 at 1:08 pm
You’re just now getting around to knowing that Krugman wrote this? If you want to move up on the scale of influential bloggers you need to pick up the pace Matt.
September 23rd, 2009 at 1:09 pm
The salary cap is per team, not per player.
Err, technically there’s a league minimum salary, there’s a requirement that at least 11 men be on the field at all times, and so that means there’s technically a player salary cap of
cap_team_sal – 10(leaguemin)
September 23rd, 2009 at 1:11 pm
Proving once again that there’s no limit to the amount of dishonesty he’ll employ to make a point, Krugman ignores the fact that Obama was talking about the need for the federal government to impose pay limitations on private citizens, not the ability of a private cartel to limit the pay of its members.
September 23rd, 2009 at 1:15 pm
Nobody gets paid cap_team_sal – 10(leaguemin). Calling that a cap is like saying we should cap bankers salaries at $1 Trillion. There is no real cap on players salaries, that is why they keep becoming more ridiculous.
September 23rd, 2009 at 1:18 pm
From the Krugman column:
http://www.nytimes.com/2009/09/21/opinion/21krugman.html?_r=1
“I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”
That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case…”
September 23rd, 2009 at 1:19 pm
The cap also changes year to year, is subject to inflation, the overall economic state of the NFL, and the scrutiny of both the owners and the Players Association twice a decade when the Collective Bargaining Agreement runs out.
Plus, under Greg’s formula, that pay cap is incredibly higher than what any NFL player is making right now–slightly different than the current discussion on Wall Street execs.
September 23rd, 2009 at 1:20 pm
Especially when you consider that bonuses are prorated over the life of a contract, so it is entirely possible for a player to make more than the team cap on a given year if the signing bonus is enough. In contrast, the NBA explicitly caps individual player salaries.
September 23rd, 2009 at 1:22 pm
That is actually a really dumb thing that Obama said. We would be making fun of Palin for saying the same thing, so its only fair.
September 23rd, 2009 at 1:23 pm
So if we put a hard cap on banker’s salaries does that mean they’ll all quit and become football players?
September 23rd, 2009 at 1:23 pm
He may not know about the salary cap, but he probably knows why a coke costs more in Europe than here.
September 23rd, 2009 at 1:23 pm
Plus, under Greg’s formula, that pay cap is incredibly higher than what any NFL player is making right now–slightly different than the current discussion on Wall Street execs.
Well, yea, that’s my point.
I was just saying that there is a way of directly deriving the maximum possible salary an NFL player could make – meaning each individual player’s salary is capped, contra what Obama said.
And I’m a little nonplussed as to why Obama decided to use the league with the most socialist compensation scheme *and* the most redistributionary revenue system.
September 23rd, 2009 at 1:25 pm
The MLB, by contrast, is the league that most resembles Wall Street.
September 23rd, 2009 at 1:28 pm
Yes there is, it’s just that the cap gets higher each year. The fact that there is a team salary cap does mean that there is a maximum salary that the team can pay one player, and that maximum is the same for all teams, regardless of how much money they’re making.
September 23rd, 2009 at 1:29 pm
Nat, if there is no real cap on a players salary, then why have a cap at all? If it won’t impact what talent they can get at what price, it would seem a fairly pointless rule. We can pretend that a team doesn’t need 2 quarterbacks (sometimes, even they pretend that) or that you can have your offensive and defensive lines be made up of 100% the exact same people, none of whom can have replacements in case of injury. I say we acknowledge reality and admit you need well above 11 players to actually complete a 16 game season.
But then we’d be letting reality intrude on our free-market fairy tale and we can’t have that now can we?
September 23rd, 2009 at 1:33 pm
If we include privately imposed ‘caps’ on salaries then that means there are caps on basically all union workers salaries.
Obama’s point is that the gov’t doesn’t get involved in capping salaries. Collectively bargained caps are completely different issue.
September 23rd, 2009 at 1:38 pm
@ #5
Considering that the federal government currently supports the banking industry through guarantees, among other things, and saved it from collapse through a massive infusion of taxpayer money, the distinction between public and private spheres that you seem to draw does not exist in this case. By all means though, continue slandering those you disagree with if it makes you feel better.
@ #6
There most certainly is a cap on players’ salaries. It is tied to revenue, and does not put a ceiling on individual players’ salaries, but it does have an overall effect of lowering those salaries relative to what they could be.
Here is a Wikipedia link explaining the system. Note especially the last paragraph under the section explaining the NFL salary cap.
http://en.wikipedia.org/wiki/NFL_salary_cap#Salary_cap_in_the_NFL
September 23rd, 2009 at 1:46 pm
This just another reminder that our President, despite his interest in basketball, is a nerd at heart, and while there are nerds who are NFL fans, Obama is clearly not one of them. So this is an understandable mistake on Obama’s heart.
However, Obama still made a serious mistake even when judged by nerd standards, because his statement makes the classic mistake of comparing apples to oranges, since he compared executive compensation for Wall Street bankers to the pay of NFL players instead of the pay of NFL EXECUTIVES (who aren’t subject to a salary cap as far I know).
September 23rd, 2009 at 1:48 pm
Sorry, I meant to write “So this is an understandable mistake on Obama’s PART”.
September 23rd, 2009 at 2:05 pm
Greg wrote: If we include privately imposed ‘caps’ on salaries then that means there are caps on basically all union workers salaries.
Obama’s point is that the gov’t doesn’t get involved in capping salaries. Collectively bargained caps are completely different issue.
Do you have to use my moniker in a thread where I’ve already posted three times?
September 23rd, 2009 at 2:08 pm
He doesn’t know there’s a salary cap because he was born in Kenya and is a marxistnazimuslim.
QED
September 23rd, 2009 at 2:12 pm
And you’re forgetting something by bitching about unions, in addition to pulling a dick move and stealing my name.
At least four major financial companies are directly held by the United States Government.
The US absolutely has the right to cap pay at these firms.
Moreover, the financial system *would not* be running today absent massive injections of taxpayer dollars.
If you want the money, you have to take your chances; why would this be any different than Buffett extracting conditions from companies, which he certainly does when he makes an investment?
Finally, you’re technically right about the government, but the Fed, which is manifestly not the government, could make high executive pay an “Unsafe and Unsound” banking practice.
That doesn’t mean these companies *couldn’t* do it. It just means that the Fed essentially declares them pariahs and refuses to deal with them. Which is definitely coercion, but they still have the ability to do it at their leisure. They just won’t for political reasons.
September 23rd, 2009 at 2:23 pm
One of the reasons why I was amused at Obama’s comment is that I’m sensing an increasing intolerance for the whole dynamic among NFL players. There may well be a strike or a lockout in 2010/2011. The Richard Seymour circumstances was just another few straws on a straining back…
September 23rd, 2009 at 2:24 pm
I’ll heartily disagree with Brad’s assertion in #5 about Krugman’s dishonesty, but I do agree that the federal government does not cap player or executive salaries for the NFL. So, Obama’s example is perfectly legitimate.
September 23rd, 2009 at 2:26 pm
‘We’ is the government when Obama is speaking. He’s right to say ‘we aren’t capping NFL salaries’ because it’s not the government that is capping NFL salaries, it’s the NFL. If a team wants to pay Brett Farve 15x what Adrian Peterson makes, they can. It would be government business if the FDIC and Fed had to step in when Brett Farve throws an interception. But it is not government business. Clever punditry aside, the failure of GMAC is not the same as the failure of GM Matt Millen. Obama is right.
September 23rd, 2009 at 2:27 pm
Obama had to have been saying that Congress isn’t going to cap the pay of NFL players. Krugman’s overall point is still valid(and correct, in my opinion). But Krugman’s point that the NFL does cap players’ salaries is just as irrelevant as Obama’s point that Congress doesn’t cap NFL players’ salaries, because the federal gov’t doesn’t currently own a large stake in the NFL and because the NFL isn’t vital to national security the way the financial stability of our society is.
September 23rd, 2009 at 3:00 pm
OMFG. Such incuriosity. Such ignorance. Clearly Obama lives in an impenetrable self-congratulating bubble. How could anyone not know that?
September 23rd, 2009 at 3:04 pm
I dunno — can you imagine the rioting that would take place in, say, Texas, if all football were cancelled?
September 23rd, 2009 at 3:06 pm
I dunno — can you imagine the rioting that would take place in, say, Texas, if all football were cancelled?
Bread and circuses, mate, bread and circuses.
September 23rd, 2009 at 3:45 pm
There is no government imposed salary cap in the NFL, so Obama is right.
September 23rd, 2009 at 5:57 pm
Hail to the Redskins, hail victory, braves on the warpath, fight for old Dixie!
September 23rd, 2009 at 6:33 pm
[...] already noted the funny part of Paul Krugman’s case for banker compensation reform it’s worth turning [...]
September 23rd, 2009 at 8:48 pm
NFL gets huge subsidies from govt, much of it on stadium construction.
And you guys who think Obama is right about this must be nerds who don’t understand football. The socialist NFL was the first to cap salaries.
Off with you, to your Sabremetrics and your Hollinger columns. Leave America’s game alone!
September 24th, 2009 at 3:54 am
MY “Does Barack Obama really not know that NFL players are subjected to a salary cap?”
Of course he knows. Nobody that reaches as high an office as Obama would be unaware of the NFL’s 40 year experiment in applied Socialism. If he hasn’t had a thousand discussions on relative merits of this experiment, the value and lessons that can be drawn from the NFL’s unmitigated success in actively forging a careful balance between Labor and Capitol, then he is either lazy, ignorant beyond belief, or just plain stupid.
Obama is clearly a hardworking, extremely intelligent man. So the real question is, why did he link Wall Street CEO’s, silicon valley entrepreneurs and NFL football players in the same sentence? What do union people, small business owners, and the Dark Lords of Manhattan have to do with each other?
Who knows. The man has gone cryptic. I know one thing. He is losing the Left. My brother and I had a party on election night. There were 40 thrilled old time liberals there. Thrilled to fucking death. Tears and champagne.
When we see each other now, we don’t discuss politics. It is too painful. We are all filled with disgust. What a difference 10 months make.
September 24th, 2009 at 11:42 am
There is no real cap on players salaries, that is why they keep becoming more ridiculous.
I’ve always found it interesting that if George Steinbrenner pays Alex Rodriguez $25 million that’s ridiculous… but if Steinbrenner kept more of that $25 million the world would be a better place.