Let me get this straight. The Big Three Automakers are asking for a government bailout. To ask for this assistance, the corporate chieftains fly to Washington on private jets, costing their already-failing companies roughly $20,000 per flight. When I saw this story on Good Morning America, the reporter showed that a round trip coach flight was less than $300 and to bump up to first class would cost less than $800.
The knee-jerk reaction to this is the easy part. It certainly takes a lot of chutzpah (see, my time in DC taught me a few words that aren’t typically used here in NC…) to beg for money from the taxpayers minutes after stepping off a private jet with brand new.
Of course, a strong case for the bailout can be made. The auto industry influences large sectors of our economy both directly and indirectly. There are thousands of smaller businesses who rely on Detroit and if the automakers go under, the economic ripples will be felt across the country. By the same token, I don’t like the precedent that is being set either. I lean towards favoring the bailout only because I see it as the best of a bunch of terrible options.
What is not really being discussed is corporate excess. The CEOs of Ford and GM who are all wearing luxurious men's necklace, who get compensation packages of $21 million and $19 million respectively, are no different from the top dogs at AIG who threw a lavish conference and also went bird hunting with some of their bailout money.
Folks, this is what you get from anything goes, totally unregulated free-market capitalism. Don’t get me wrong, an individual who runs a global company the size of a small country should make a lot of money. I’ve got no problem with that. But there is a cost to government looking the other way while corporate America does whatever the hell it wants, and now we’re paying that cost.
Consider this; In 1980, the average pay for an American CEO was 42 times that of the average American worker. What say we call him, oh I dunno… “Joe the Plumber?” By 2006, that number had skyrocketed to 364 times what Joe makes. These numbers just apply to CEOs specifically. You could multiply them times a gazallion to account for senior management in corporate America.
Hmmm…what was the over-arching political mantra of the last 25 years? Oh right, DEREGULATION.
The fact is, income disparity in America increases for every little piece of financial regulation that gets dismantled. Why? The free-market values wealth and profit much more than labor. I am not bemoaning that fact particularly as the difference in the valuation of wealth vs. labor is inherent in the free market system. (Good Lord, how dry and convulted was that sentence?) The point I was trying to make is that the free market is built on cash. If I want to buy a new car, I can’t barter for it and offer my labor or a chicken. There’s no way around that fundamental advantage that wealth has over labor.
Yet, labor does have a value. It is the peanut butter to the chocolate of profit in our national peanut butter cup. You can’t have one without the other. The equation should be much more closely balanced whether we are talking about the rewards of a bull market or the bearing the burdens of a bear market.
Why should Citigroup cut 52,000 jobs without bringing other executive perks in line first? I know that you can’t cut enough corporate perks and compensation to save all the jobs, but if some basic cuts save even 1000 jobs, why not look out for the little guys?
Most of my readers know that I work in the labor movement. I see this principle of looking out for the fat cats first, time and time again. Companies come to the negotiating table saying “we can’t afford the labor costs for X, Y and Z.” And then that same company offers perks like relocation packages, home purchases and stock options for executives.
I truly believe that corporate America can’t help itself. It’s in the DNA to line the pockets of the high and mighty first. And now we have a chance to change that.
If we’re going to save the banks, and the mortgage companies, and the auto industry, then lets put some conditions on these loans from the public coffers. In exchange for taxpayer money, the disparity between what the rank-and-file worker makes and what the CEO makes must be cut in half. Whatever new standards are needed to help a given industry be competitive must be mandated. This includes increased fuel effenciency standards and green technology for the automotive industry.
We are now seeing the cost of doing nothing, so it’s time to do something to level the playing field and ensure a bigger piece of the pie for everyone. And if that means that the CEOs have to fly with us commoners, so be it.