Sunday, March 20


Nick Kristof sounds off, rightly, on CEO pay:

Companies have shaved costs by laying off workers and reducing health care coverage - and then using those savings to slather more pay on top executives. It's true that companies are now cutting back on stock options for C.E.O.'s, but it's hard to be impressed by that restraint when bonuses are soaring.

Since 1993, the average pay for C.E.O.'s of the S.&P. 500 companies has tripled to $10 million at last count, while the number of Americans without health insurance has risen by six million.

Dick Meyer reflects upon the past few years and asks, Has the CEO predator class been tamed? No, he concludes.

There is no sign top corporate compensation is coming back to earth. In 1982, the ratio of average CEO pay to average worker pay was 42 to 1; in 2003, the ratio was 301 to 1. And the the bell weather editorial page of "The Wall Street Journal" now argues that CEO pay will have to go up further to entice talent willing to risk going to jail.
But what smells most foul to me is that the recent uber-scandals weren't the work of renegade con men. They were executed by legions of highly trained MBAs and accountants within the companies, and facilitated by auditors, lawyers, directors and investment bankers outside the companies - all giant organizations that have been merged, acquired, synergized, downsized, depersonalized and bureaucratized.

The worrisome point is that this crime wave was conducted by highly trained and educated professionals, mostly wealthy, mostly the children of history's wealthiest generation. Cheating and greed have been institutionalized.

There's a predator class - still. But maybe I'm just looking for the bad news.

When John Edwards speaks of "two Americas," he's not just spouting rhetoric. The Republican agenda is clearly on the side of the already-wealthy-becoming-much-much-wealthier; the mystery is, why are so many Americans who are struggling economically supporting that effort? At what point did it become politically unpopular in this country to advocate a fair wage and equal opportunity? By what means have the Repugs convinced a majority of Americans that their best hope for the future is to champion the cause of more wealth for the wealthy?

The only answer that makes sense to me is the co-opting of the "moral values" issue by Repugs as the new bigotry distraction. Throughout history evil men have used bigotry, whether racial, religious, or nationalistic, to distract the economic underclasses from the real issues that would divide them against their masters. In the post-Civil War South, poor workers were incited to see themselves, like their company masters, as superior to their colored economic peers, which resulted in the depression of wages since common cause could not be made and unionism was defeated. In post-WWI Germany Jews were advanced as the "enemy" and the cause of the nation's economic difficulties. Common Germans identified with uber-rich industrialists more than those of their own economic class who were of a different religion.

Today in America we are startled to see $200 million compensation packages for CEO's who neither founded the company nor presided over great gains for shareholders or employees. But then the subject quickly changes to Terri Schiavo, or Elian Gonzales, or abortion, or gay marriage. Being on the "right side" of these issues aligns middle- and lower-earning people with strong doctrinal beliefs more with their zillionaire employers and politicians than with others of their own economic class, distracting them from issues key to their own survival and prosperity such as increased minimum wages, social safety nets, access to healthcare, a fairer sharing of the tax burden with those best able to afford it, and educational opportunity.

It's a cynical manipulation of our people, but it's worked repeatedly. It's most successful when no opposition voices cry out. Howard Dean was castigated when he stated he wanted to reach out to lower-income Southerners whose pickups sported a Confederate flag. But he was exactly right in his goal: Democrats have GOT to wake up America to the fact that NOBODY's better off for the past four years except those who were already quite well off before.


Blogger Xpatriated Texan said...

Forgive me for posting a link to my own blog, but I dealt with this issue a bit earlier.

It's certainly true that the workers could not work without a CEO, but that is no less true when you reverse the equation.


3:52 PM  
Blogger Motherlode said...

Hey, I'm really glad you did. I enjoyed your blog very much and have added you to my blogroll.

We have a lot in common --

9:14 AM  

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