Two Americas
There's a new twist to already excessive executive pay called "the golden hello." Via the International Herald Tribune:
One aspect of the failed "conservative revolution" was its insistence on destroying major New Deal reforms and concepts, including Keynesianism. Starting with "trickle down" economics in the 1980's and continuing with Republican and DLC corporatism in the 1990's, we now face a reality where there are, as John Edwards says, two countries. There are the super-rich and there is everyone else.
There's nothing inherently wrong with being rich, of course, and corporate executives who do a good job deserve to be fairly compensated. But regular people know that the the super-wealthy not only get to enjoy their lifestyles, which is fine, but they get to buy more democracy than the rest of us. That isn't fine. The right-wing think tanks (Big Stinky) aren't funded by people making $37,000 a year, or even by people making $500,000 a year.
It's always struck me as odd that we can talk about most anything in this country-sex, drugs, scandal, celebrity misdeeds, whatever-but you can't talk about class, at least in any meaningful way. It's nice to believe the fiction that class and income inequality is not a major problem in this country, but go ask the people in New Orleans about it. Stating the obvious is not the same as "engaging in class warfare" anyhow.
There are many fine individuals of great wealth who do very good things for people. The Gates family is an obvious example in Washington state. There are many other wealthy philanthropists in our state and nation that deserve applause for aiding all sorts of efforts in the fields of health, education and culture.
So the issue is not tremendous wealth per se, but rather how that fabulous wealth is used to distort our political system.
(And to be clear, the Gates family does not distort the political system, in my view. It's the Scaife's and the Kochs and the rest of Big Stinky that do that, and they do it quite methodically and deliberately. William Gates Sr. may have come out against the repeal of the estate tax, but his son, had he wished, could have thrown down against Frank Blethen's pro-repeal campaign quite easily.)
As we move forward with debates about public financing of political campaigns, income inequality and the basic issue of fairness in democracy should be kept in mind. The playing field in politics needs to be as level as possible.
The career path of (W. James) McNerney illustrates the phenomena. In late 2000, after losing out in the race to become chief executive at General Electric, McNerney jumped to 3M, where he received a pay package worth more than $34 million in guaranteed salary, bonus, option grants and restricted stock to make up for what he left behind at GE, according to an analysis of his compensation by Equilar, a compensation research firm in San Mateo, California.One analyst quoted in the article had this to say:
Five years later, in the summer of 2005, Boeing, which had been rocked by scandals, was on the hunt for a squeaky-clean chief executive.
It offered McNerney, who was a director on its board, a pay package worth more than $52 million, which included $25.3 million of restricted shares and an additional $22 million in restricted stock to replace his 3M pension.
The use of such golden hellos is not new, but lawyers representing executives at the negotiating table are constantly coming up with quirky ways to make their clients whole. Matching salaries, guaranteeing bonuses and receiving millions of dollars worth of stock options are typical. On top of that, chief executives are made whole on lucrative pension benefits, often being credited at the new company for years of service elsewhere — a perk rarely available to non executive employees.
"Boeing has gone further into territory that even I have not seen before," said Paul Hodgson, a senior research associate at the Corporate Library, an institutional advisory firm in Portland, Maine. "Boeing shareholders are being asked to fund a pension potentially based on what 3M and GE paid McNerney, rather than what they themselves paid him. Such an arrangement would seem to take inappropriate to a new level."The Democratic Congress intends to increase the minimum wage to something like $7 an hour, and you can be assured that predictions of economic disaster will promptly emanate from the GOP. Meanwhile, the concentration of wealth in fewer and fewer hands continues unabated. It's not just bad for democracy, it's bad for the economy as a whole, as consumers struggle to swim in place.
One aspect of the failed "conservative revolution" was its insistence on destroying major New Deal reforms and concepts, including Keynesianism. Starting with "trickle down" economics in the 1980's and continuing with Republican and DLC corporatism in the 1990's, we now face a reality where there are, as John Edwards says, two countries. There are the super-rich and there is everyone else.
There's nothing inherently wrong with being rich, of course, and corporate executives who do a good job deserve to be fairly compensated. But regular people know that the the super-wealthy not only get to enjoy their lifestyles, which is fine, but they get to buy more democracy than the rest of us. That isn't fine. The right-wing think tanks (Big Stinky) aren't funded by people making $37,000 a year, or even by people making $500,000 a year.
It's always struck me as odd that we can talk about most anything in this country-sex, drugs, scandal, celebrity misdeeds, whatever-but you can't talk about class, at least in any meaningful way. It's nice to believe the fiction that class and income inequality is not a major problem in this country, but go ask the people in New Orleans about it. Stating the obvious is not the same as "engaging in class warfare" anyhow.
There are many fine individuals of great wealth who do very good things for people. The Gates family is an obvious example in Washington state. There are many other wealthy philanthropists in our state and nation that deserve applause for aiding all sorts of efforts in the fields of health, education and culture.
So the issue is not tremendous wealth per se, but rather how that fabulous wealth is used to distort our political system.
(And to be clear, the Gates family does not distort the political system, in my view. It's the Scaife's and the Kochs and the rest of Big Stinky that do that, and they do it quite methodically and deliberately. William Gates Sr. may have come out against the repeal of the estate tax, but his son, had he wished, could have thrown down against Frank Blethen's pro-repeal campaign quite easily.)
As we move forward with debates about public financing of political campaigns, income inequality and the basic issue of fairness in democracy should be kept in mind. The playing field in politics needs to be as level as possible.
