Two items from my radio this morning: 1. Mr. Ebbers, formerly CEO of WorldCom failed to convince a jury that he didn’t know the books were being cooked in his company that defrauded stockholders and workers out of billions. 2. The prime reason for the budget deficit is that Mr. Bush’s tax cuts have made corporate income taxes the lowest percentage of GNP in sixty years.
One would think that Americans are not so stupid that the are not yet out of the phase of their attitude that CEOs, the pop culture heroes of the Reagan Administration, are less than Olympian figures who have made their companies, but deserve the obscene salaries and benefits that they got compliant boards of directors to pay them. Many of these heroic CEOs comported themselves like rock stars and courted celebrity status with their executive jets, trophy wives, lavish parties, and golf dates with presidents. If their businesses came on hard times they had already negotiated “golden parachutes” to float them down to their sumptuous palaces, or they went off to pilfer under some other corporate logo.
This is the kind of thing you get when corporate capitalism is the secular religion of the nation. “CEOs manage multi-billion dollar companies.” one would hear people say, “With such responsibilities they deserve whatever salaries their stockholders are willing to give them.” With the 1990s rollicking along nicely, the numbers rose and so did their parachutes. These guys, like GE’s Paul Welch, must be geniuses. They deserve to be on the covers of national magazines.
Yeah, sure. Never mind that sometimes the “multi-billions” were just some product of an accountant’s imagination, or other little “ledger de main. ” It was a logic, by the way, that infected everything. Boards of regents (mostly made up of business types) began to consider campus presidents in the same way, and salaries soared for campus administrators, not professors. So the bigger you could make your campus, the bigger your salary.
Americans who worshipped these “captains of industry” were not adept at separating corporate growth from the fluctuations of the stock market, and many were also duped into vesting their pensions entirely in their “financially solid” corporations. After all, the hero, like Ken Lay of Enron, could get up at the stockholders meeting and say they were growing like crazy. Never mind that the boys at the top had the “insider” info that the joint was on fire. They weredivesting themselves while asking you to pump your pension into it to ward off the inevitable! American’s worshipped these cynical fiends. (At least Martha was just trying to make an easy fifty “large” with a little insider info and not screw a few thousand workers out of their pensions and medical plans.)
And when things began to fall apart, lo and behold, they got their deus ex machina in the form of George W. Bush, the failed businessman who parlayed his name and born again (from booze and fake military service) persona into a (stolen) presidency. Mr. “Tax Cuts for the Wealthy” himself. Those poor CEOs shouldn’t have to cough up so much on April 15 (and there are bunches of dim-witted taxpayers groups who chant this nonsense) because they “earned” their huge salaries.
But even Mr. Bush might not be able to help you (although “Kenny Boy” Lay is a Bush homeboy) if those enraged erstwhile stockholders, penurious pension holders, and snoopy SEC types come after you. Then what happens? You turn it all upside down, that’s what! The “duhhh defense.” The brilliant CEO was duped by his CFO! The financial genius had no idea that the company was in trouble! The guy who was paid hundreds of millions in salary and stock, because of the importance of his position, wasn’t even paying attention, was out of the loop. Well, these heroic geniuses had better hope that there are no former pensioners on the jury. Still, the sentence will likely be less that some ghetto kid with a couple of ounces of controlled substance. After all, in America, bullshit, especially from CEOs, is not a controlled substance.
Curious place, this land of the fee, and home of the knave.
©2005, James A. Clapp (UrbisMedia Ltd. Pub. 3.16.2005)