One of my frequent targets in this blog is the politics of envy. Do I believe a pop music star, movie or television star, a philandering golfer, or other professional athlete is worth tens of millions of dollars a year? Of course not. But no one is forcing the general public to shell out obscene amounts of money to attend a concert or professional sports event (and to a certain extent, given the typically short-lived professional careers at peak income, I don't mind them charging what the market will bear for their performance).
I'm not a shill for Big Business; the domestic auto industry kept ceding market after market and building gas-thirsty, less reliable vehicles long after the US economy started importing more oil than it was producing. And then there were the Enron's, the Tyco's, the GSE's, the investment bankers, and AIG... I have zero empathy with fat cat, clueless executives whom put their own compensation over the long-term interests of their core stakeholders (their investors, employees, customers, and suppliers) in a tough, global economy.
A case in point is the recent scandal and termination of Mark Hurd, Senate candidate candidate Carly Fiorina (R-CA)'s successor at HP. The initial charge involved Hurd's alleged conflict-of-interest relationship with a marketing contractor, resulting in a sexual harassment charge (subsequently dismissed in an internal review), although the board claims that the dismissal had to do with undisclosed nature of the relationship, improper expense reports and use of company assets (e.g., corporate jet). It should be noted that details about Hurd's meetings with the female contractor have been disputed.
I was struck more by blogger Erik Jackson's description of how 5 top executives at HP 2 years ago were paid from $21 to 43M, including huge raises (in one case quadrupling compensation), in a year when HP stock dropped nearly 30%. And while lower-level employees were asked to take a small compensation cut, the executive publicly cut their base salary while quietly loading up on supplemental compensation (including options and other perks). What is particularly galling is reading how the $43M man had quietly attempted to write off family meal and travel expenses on HP's nickel.
I think it shocks me because as a contractor I have been notoriously tight spending the client's money. I would rent subcompact cars; I ate fast food or bought groceries versus going out to restaurants, I found a roundtrip from Chicago to San Francisco that cost under $450 with 1-day advance purchase (vs. $1600 on United Airlines, with which I had a Mileage Plus account), and even when the CEO's secretary allowed me to charge up to $200/night hotel rooms in Santa Clara, I stayed at an Extended Stay hotel in Morgan Hill at roughly $43/night and commuted in thick Highway 101 traffic an hour or so each way. Not one client ever demanded that I do this, but it was the way I was raised. Somehow my parents made ends meet raising 7 kids on an enlisted man's pay (which back then wasn't that much...)
[What really annoys me is when organizations are cheapskates. At UWM, when I pointed out that they could save significant money by making a software purchase via mail order versus their approval vendor, I was punished by a competitive bid process that delayed my getting the software a semester. At one conference in Vegas, a colleague claimed per diem while eating at cheap buffets; I charged my actual expenses, but the accountants disallowed a $4 buffet expense because a subsequent flight's snack was deemed a meal and disqualified reimbursement for the early lunch. It wasn't so much the $4 as the principle; I then demanded per diem. The accountants were horrified--"We can't do that; we've seen your receipts!" They eventually approved the receipt, but it was like pulling teeth.
Unfortunately, it wasn't the last time I had to battle an accountant. I once had a job offer in writing cancelled less than 2 days later when the same company's accountant recalled an incident 3 years earlier on a job interview when a company executive was supposed to meet me for breakfast and no-showed. I ate breakfast at the hotel and later billed the company for reimbursement. The company accountant vetoed the reimbursement, claiming it exceeded their guidelines for employee reimbursements (even though I wasn't an employee and wasn't advised about any relevant expense guidelines); it didn't matter, of course, that the reason I had to pay in the first place was because of the no-show.]
The closest I ever came to an executive perk was when a Chicago-based management consulting company I was working for had an executive box or suite at the United Center; for whatever reason, the seats became available for a Chicago Blackhawks hockey game, and our project team, working at a client near Comiskey Park, was invited. It was an interesting experience, but to be honest, I've never identified with the lifestyle: the lavish corner offices, private jets, the company car, 5-star restaurants and hotels, country clubs, etc. I don't think any of it has anything to do with competing in a tough economy, and the trappings don't impress me. I think it results in a surreal, perverse sense of entitlement, where executive compensation is seen a competitive measuring stick, independent of corporate performance.
However, I don't think the answer is demagoguery and a politics of envy (e.g., punitive tax increases). What I do think will help is improved transparency, including a fair "all-inclusive" standard of reporting executive compensation, independent assessments of executive performance, and independence of the board from company management.
Vote of No Confidence in ICE Senior Management
I have to admit that I have had my differences with organized labor; there are the typical anecdotal reasons. For example, at UWM, I had to wait several days until a union electrician found the time to replace the overhead lights in my office. In another case, the assistant dean of the business school asked for a couple of people to help move a few items between rooms; the union found out and promptly invoiced the school for work it didn't do. I have little sympathy for inflexible egalitarian pay scales, the protection of mediocre workers, arcane, counterproductive, bureaucratic work rules, and compensation demands that are inconsistent with long-term business interests.
But the decision less than 2 months ago to issue a unanimous vote of no confidence, by nearly 7000 Immigration and Customs Enforcement officers and employees, in ICE director John Morton and assistant director Phyllis Coven, is remarkable; AFGE President Chris Crane has done a patriotic service by exposing the Obama Administration's cynical game playing with political spin and deliberately misleading statistics. I don't intend to to paraphrase the entire letter here, but, for instance, the Administration underplays the fact that over 90% of detainees resulted from leads from local law enforcement making arrests for other (non-immigration) crimes, only a tiny fraction of ICE officers are assigned to law enforcement duties, and there is a double standard in the processing of American citizen criminals versus recidivist illegal immigrant criminals, whom escape trial by volunteering for deportation. They also note that the local and state governments are already having to subsidize failed border protection policies with limited funds and jail capacity (often having to release detainees into the general population because of a lack of responsiveness from ICE) and practicing a de facto amnesty policy.
I am not concerned with the majority of the hard-working undocumented workers whom are not engaged in criminal activities. However, with Janet Napolitano (Secretary of Homeland Security) and others declaring surrender in advance on border security, I am concerned about the Obama Administration providing rogue elements with a workaround to toughened visa policies.
Political Cartoon
IBD cartoonist Michael Ramirez nails it again... We didn't shed the yoke of imperial England for the oppression of incompetent progressives. Was the practice of abortion known in 1776? In fact, the ancient Greek Hippocratic Oath forbade physician assistance. Were there gay Americans back then? No doubt, but no gay "marriages"? Of course, Americans got sick, even in 1776, but not even imperial England paid over half of all health care expenditures and required colonists to purchase health insurance... Somehow all these issues were relevant, even back in 1776 (and when the Constitution was drafted a few years later), but somehow the founders "forgot" to mention them...
Quote of the Day
All profoundly original work looks ugly at first.
Clement Greenberg
Musical Interlude: The American Songbook Series
Billie Holiday*, "One For My Baby (And One For The Road)"
(* My audio collection features Lena Horne on vocals, but I cannot locate a relevant embeddable video or audio clip. I hope that the reader finds Billie Holiday's interpretation a worthy substitute.)
