Tuesday, January 24, 2006

The invisible hand is flipping you off

While I continue to find myself monstrously busy, two recent items have made me need to get back on the bloggy horse. First is an article in the February issue of Harper's by Garret Keizer. It's called "Crap Shoot" and argues that Americans are being left out of the political process, but are being fooled into thinking they are vital. They are, he says, being told they are "players" and goes on to make some devastating observations about the way politics is "played" in the United States today. In one section, for example, he explains why he thinks it's so easy for some to accept unreality.
As the country is bankrupted by an insane war, every one of whos stated objectives could be refuted by a junior high debate team; as "outsource" becomes the lates euphemism for outrage, be it of jobs or torture; as the ability of our children to read, write and breathe is eroded almost as rapidly as the ozone layer and the topsoil—what is it they can't see? And the answer, at least one of the answers, is this: they can't see that they're not players. They can't see because the game is all about making them believe that they are players, and because the real players have gotten very good at the game.
How many bloggers, I wonder, can read that without feeling like they just got punched in the gut? Yes, I admit to a stinger, but I can't believe the RNC invites a guy calling himself "Capt. Ed" to their offices without snickering as he leaves the building with an inflated appreciation for the special little squeak he adds to the Republican Noise Machine.

Keizer argues that it's time for a new paradigm. First, we must quit thinking of politics as a game. While this thought isn't the most original, Keizer's take on it is. He's not just saying that it's too important to be thought of in that manner, he's saying thinking like that leads to cliquery with ever expanding circles of exclusion and delusion. In other words, I might think that I'm on the mind of a congressman because I've donated money or wrote a widely linked blog post about him, but he would find that idea laughable. And he and I both might see people writing letters to the editor as foolish, but they might feel like they are players as well because they got a call once from someone who complimented them. Keizer:
Exclusion is contained in the very definition of the player. If everyone is a player, then no one is a player. When everybody comes onto "the field," it's no longer the field. It's a park.
It is time, Keizer says, to embrace not "politics as game," but "politics as work." We need people in politics at all levels who see the country as a rough piece of something that must be smoothed and shaped and made better every day through diligent effort.

I like that.

But the second item which caught my eye was the recent release of the DVD version of the documentary Enron: The Smartest Guys in the Room. (You remember Enron, right? The company whose downfall was pulling down Bush's popularity until Sept. 11th happened?) In watching this movie again last night, I realized that Republicans were, in some ways, already ahead of us in seeing this new paradigm. The Republicans in power today, however, don't see themselves as workers toiling alongside their constituents to shape a better future America. No, they see themselves as CEOs, executives running America, Inc. Where Keizer sees work, they see business opportunities.

Thinking of the country as a business, in and of itself, might not be wholly awful. There are probably ways in which a business paradigm could lead to a more efficient and responsive government. But we've seen what Republicans think of business. Their view is that all CEOs have no responsibility but to make money and that giving over the marketplace to Adam Smith's "invisible hand" through deregulation will always achieve the best solution.

It should be noted, of course, that I wrote a CEO's only responsibility is to make money and not to earn it. I remember talking about this when Bush was saying that people should "keep more of the money they earn" when he was selling his first tax cuts. When you realized that most of those cuts went to the country's wealthiest people, you had to see that this was mostly dynastic wealth and the pay of top executives. And, of course, when you actually delved into the compensation of these top execs, you see that only a Republican mind could still believe that the vast majority of these people are earning their money in any meaningful interpretation of the word.

In 2004, the average "rank-and-file" worker's pay at 100 large companies rose 2.5 percent, according to USA Today. In that same year, median CEO pay rose by 25 percent. Am I the only one who doesn't remember stock prices or corporate earnings shooting up by a quarter in 2004? Read the whole USA Today article, and you'll find that there is no correlation to pay and performance which could justify calling what many CEOs do earning. Examples?
  • Cincinnati-based Fifth Third Bancorp's shares lost 20% and earnings fell 12%. But CEO George Schaefer received an $825,000 bonus after directors used their "best business judgment" analyzing measures such as the economy, his progress on regulatory matters and leadership objectives, according to its proxy. Schaefer also got options worth up to $17 million and gained $9 million exercising options. The company did not return calls.

  • Anheuser-Busch shares have been as flat as day-old beer since Patrick Stokes became CEO in July 2002. In setting Stokes' 2004 salary — up 5% to $1.5 million — directors gauged shareholder return, financial results, market share and CEO pay at 20 companies. That said, "Actual salary determination is subjective in that there are no specific weightings for the variables considered," Anheuser's proxy says. Since 2002, Stokes has received options potentially worth $290 million. But according to Anheuser, Stokes' holdings are currently worth just $37 million.

  • Eli Lilly's shares slumped 19% in 2004, but CEO Sidney Taurel's combined salary, bonus and stock grant surged 74% to $4.6 million. Lilly's board said it considered not only shareholder return and financial results but also Taurel's leadership in "important initiatives to improve the company's productivity" and enabling it to "compete in an increasingly challenging business environment." Lilly directors also concluded that Taurel's compensation was "significantly" below that of his peers, giving him 400,000 options the company valued at about $11 million, vs. 2003's 350,000 option grant worth $7.2 million.
And that's just the money they get directly. It doesn't include the perks. From the Christian Science Monitor:
  • Don Tyson, Tyson Foods' former chairman, got the firm to pay for items such as a $20,000 Oriental carpet and an $8,000 horse.

  • Jack Welch of General Electric had a retirement package that gave him use of the company jet and fresh flowers for his New York apartment.

  • One CEO even got at least 48 visits to golf clubs and resorts with lush fairways; 100 flights aboard company planes; 200 stays at hotels, many world-class; and 500 meals at restaurants, some averaging nearly $200 for a dinner for two.
Whoops! I'm sorry, that last person on the list wasn't a CEO at all. It was Tom DeLay. DeLay, of course, is the epitome of CEO Republicanism. He has no qualms about accepting perks in his position because, in his mind, he's earned them. And what's so wrong with that? And what's wrong with day traders working out of his and Bill Frist's offices, using their knowledge of pending legislation to game the market? Hell, as long as there's no law against it, then there's nothing wrong with it, right?

Here we see how deregulation plays into their mindset. Enron was the perfect example. Ken Lay and Jeffrey Skilling fought to deregulate the energy sector and, when they got it from California's Governor Pete Wilson, they began screwing that state's customers soon afterward. They decided their profit margins outweighed ever other consideration, including the physical health of Californians. Enron had to keep looking good no matter how sick it had become and that was only to line the pockets of Lay and Skilling and their inner circle. Skilling once famously said, "I am Enron." As long as he was doing all right, everything was fine.

In 2003, Tom DeLay was asked by the owner of Ruth's Chris Steak House to put out his cigar due to a federal government regulation which banned smoking in the building. DeLay famously said, "I am the federal government." Like Enron, Republicans oppose regulation not because they think it will be good for Americans, but because those regulations are inconvenient. The name Abramoff comes to mind...

Never, however, has the connection between Republican love of deregulation and their willingness to simply do whatever the fuck they want been driven home more than in Bush's attempts to place himself above the law in the domestic spying case. There are many options built into the law which requires warrants for phone taps, but they're simply inconvenient to Bush, who appears to think that, like DeLay, he is the federal government. If you doubt it, I suggest you read Nancy Pelosi's recently declassified memo about the wiretap program. She asks for more information, writing, "it has not been possible to get answers to my questions." We have no idea what answers she got from this memo as that section has been redacted, but most Dems in the House seemed to be surprised by the program and the extent of it. Also, she had to ask for permission to speak about the program as it was considered classified.

In other words, members of Congress were fed limited information and not allowed to speak about the program in public. Yet George W. Bush sullied my alma mater yesterday by saying, "We briefed members of the United States Congress, one of whom was Senator Pat Roberts, about this program. You know, it's amazing, when people say to me, well, he was just breaking the law -- if I wanted to break the law, why was I briefing Congress?"

Near the end of Enron, the company's former vice president, whistleblower Sherron Watkins, warns that Enron was not alone in its duplicity:
Enron should not be viewed as an aberration—something that can't happen anywhere else—because it's all about the rationalization that you're not doing anything wrong. 'We've involved Arthur Andersen. We've involved the lawyers. The bankers know what we're doing...' The diffusion of responsibility
Watkins leaves out the sycophantic press corps which took everything Enron said as fact.

We are there again. Bush breaks the rules and says he involved Congress and the lawyers and the press eats it up. But there are many people on both sides of the aisle who find Bush's actions repulsive. The checks and balances built into the economic system failed those hurt by the Enron scandal and those which are supposed to protect our civil liberties are failing us now. Laws and regulations are simply being discarded by the very branch of government supposed to uphold them.

Bush thinks Americans want that, though. He says that Americans expect him to do whatever it takes to protect them. Yesterday, in another context, Bush said that "the strong have a duty to protect the weak." Me, I agree with that statement and so, I believe, would the founders of this nation. What they also knew, however, was that's not the way things usually work. That's why they built limits into the system to protect the rights of individuals and guard against the exercise of unchecked self-interest, the hobgoblin of Republican minds.

But Republicans think that the President shouldn't be held down by silly things like laws and regulations and they believe that they've simply earned the right to act as they see fit at all times, ethics be damned. Republicans have gotten their wish and, in control of the government, they've gotten the opportunity to run it like a business. Sadly, that business is Enron.


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