Saturday, June 29, 2013

CEOs Assert the License to Loot

© Charles D. Hayes

Three decades ago, futurist John Naisbitt asserted that "it is easier to ride a horse in the direction it is already going." A slightly modified version can aptly be applied to the egregiously exaggerated value of CEOs in America. That is to say, it's easier to be viewed as a wunderkind executive, if the business one has been selected to run is already booming.
There are, in my opinion, few more counterfeit notions than the overstated hype about CEO expertise on the global business stage. To command obscene compensation requires that there be an ongoing public relations effort to keep the mythic notion of exceedingly rare talent in the air. It ought to be called "The Great Duping of America," because this is precisely what has happened and is continuing to occur as a way to prevent the rate of exploitation from being impaired.
No doubt there are many CEOs with good management skills, but it is a stretch far beyond credulity to say their special expertise is worthy of the right to loot a public enterprise and to persist in doing so even when the venture is losing money. This is going on right before our eyes, and yet we watch silently in awe like nothing more than a bunch of uninformed fools. It's as if we have, as Erich Fromm put, it "swallowed the principles of power."
In this case, we’ve tacitly endorsed the right of certain individuals to collect unlimited compensation based on a brand of inflated expertise so special and so utterly unique that few of us are able to say precisely what it is. Not to mention the corporate missteps and blunders that occur daily, or the criminal malfeasance behind the 2008 Wall Street meltdown, for which virtually all of the executives responsible have gone unpunished, though, of course, they did get their bonuses.
The plain truth, if we simply think it through, is that when business is on the upswing, you could pick as the new CEO any warm body off the street with a demonstrated penchant for good judgment, and business would continue to thrive. For every Steve Jobs there are scores of performers who are mediocre at best, unless their particular business happens to be stuck in an upward cycle. We have a tendency to remember the successful examples and forget the failed performances. 
Reality is harsh, though, as the many CEOs who are not so well endowed with good judgment prove day in and day out. A Google search on the term CEO incompetence will produce more than a million hits. These executives can make blatant management errors, and yet the prevailing fairy tale of extraordinary expertise still awards them astronomical compensation.
One of the advantages of getting old is that pretentiousness gets easier to spot. I say, there is no more excuse for stratospheric reward at the top of business than there is for slave wages at the bottom. The license for executives to loot is no more necessary or justifiable in a nation that calls itself great than is the license for businesses to exploit labor with the full expectation that taxpayers will subsidize via food stamps the employees whose compensation is below the poverty line.
Shame on the successive generations of us who grew up learning and discussing the parable of the emperor who had no clothes, but who demonstrate through our actions today that we have learned nothing from it. It might be accurate to say that America has become the laughing stock of the developed world, except that our ignorance-based subservience to powerful myths of excellence and Ayn Rand notions of self-interest on steroids is anything but funny.
The Cold War fear of Communism conditioned millions of our citizens to recoil in a kind of panic-paranoia at the mere suggestion of anything containing the word social. The result is that millions of people can be relied on to vote against their own interests and, worse, to stand by and actually cheer on the looting, as Wall Street skims the cream off the stock market each day using supercomputers with which no individual investor can compete.
If America is to save its middle class, we must put ideological fantasy aside and face the reality once and for all that nations with a strong middle class have never existed anywhere on earth without an enormous ongoing investment in both hard and soft infrastructure.
The conservative ethos for frugality and stopping wasteful spending is of great value, but we should apply it judiciously across the board without exception. Instead, America's military industrial complex, the private prison industry, and our healthcare and our financial systems have been purged of the ability to accomplish anything on a broad economic scale except to satisfy the greed of a few well-placed individuals. This is not freedom. These people aren't really winners. But the rest of us are indeed losers.
It's insane to believe we can maintain a viable economy and a strong middle class with lower and lower taxes at the same time a class of privileged executives, empowered by their governmental and legislative connections, ransack corporate finances whether they are successful managers or not. Their real managerial expertise is too often beside the point. It's quid pro quo all the way, as these executives and their boards plunder the public trust with enough sleight of hand that everyday citizens mistake larceny for strategy.
Today John Naisbitt's horse representing America's middle class is headed for the abyss, unless average citizens begin to demand a change in direction. 
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