From The Boston Globe — Originally published Friday, Feb. 6

The director of an executive compensation firm was quoted in The New York Times this week condemning the Obama administration’s proposed caps on corporate salaries for companies that take taxpayer bailouts to keep afloat. “Five hundred thousand dollars is not a lot of money,” said the compensation expert, James F. Reda, “particularly if there is no bonus.”

The U.S. Department of Labor estimates that just 0.4 percent of Americans currently earn $500,000 or more. That suggests that for 99 and six-tenths of Americans, $500,000 is, in fact, a lot of money.

This kind of cluelessness is emblematic of the distortions in the U.S. economy that helped bring on the current crisis. It also explains why President Obama’s proposed compensation reforms are more than just a populist gimmick.

… In his inauguration speech, Obama said that the cynics who question the need for change don’t understand that “the ground has shifted beneath them.” Wall Street just got a seismic reminder.