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Posts Tagged ‘salary caps’

Why Masahiro Tanaka’s Yankees Contract Is Good for Baseball

A few days ago, the New York Yankees signed Masahiro Tanaka to a $155 million contract. As Bryan Hoch of notes, this is the fifth-highest salary for a pitcher in Major League history.  But the Tanaka contract is different from the top four on the list.  The top four contracts went to pitchers who were already playing Major League Baseball.  Tanaka played last season for the Rakuten Golden Eagles in Japan’s Nippon Professional Baseball league.  And while his 24-0 record – and 1.27 ERA – helped the Golden Eagles win the Japan Series title, we do not know how he will fare against MLB hitters. Despite this uncertainty, there is still a sense that this signing illustrates that the Yankees have an unfair advantage.

Let the Human-Capital Exodus Begin

One effect of President Obama‘s $500,000 salary cap on the executives of bailed out firms (if it has any effect at all; Gary Becker thinks it won’t) could be an exodus of human capital from the top echelons of the finance industry. A new paper suggests that talented people are likely to leave finance in droves anyway, once tighter regulations . . .