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February 9, 2009
An Attack on Failed
Executives, Led by the Biggest One of All
The national twilight zone Americans collectively entered in September
is rapidly becoming a perpetual reality. First, politicians convinced
themselves with relative ease that it was acceptable to spend over a
trillion dollars on bailouts for firms that were “too big to fail.” Then
President Bush and congressional Democrats joined forces to support a
bailout of failed automakers and the oppressive United Auto Workers
instead of allowing them to naturally undergo Chapter 11 reorganization,
designed precisely for their circumstances.
suddenly became normal for the federal government to subjectively aid
corporations of their choice, and by logical extension, it became
tolerable for politicians to interfere in the businesses’ business. It
was fascinating to witness Sen. Chris Dodd, for example, asking for the
resignation of a corporate CEO who was apparently not performing up to
Dodd’s standards. Dodd, himself a nearly 35-year institution in
Congress, was personally a primary force behind the failures of Fannie
Mae and Freddie Mac, and was part of a government that had run up a $10
trillion debt he is punting off to a younger generation. Is he, or any
other big government politician, really in a position to demand the
resignation of anyone before himself?
The hypocrisy, unfortunately, does not end there. It has
ascended through the bloodstream of the government beast to reach its
very head – President Barack Obama. Obama launched a crusade last week
against chief executives in the private sector for earning large
salaries. He explained, “What gets people upset – and rightfully so –
are executives being rewarded for failure. Especially when those rewards
are subsidized by U.S. taxpayers.”
First, it is important to note that people are most certainly
upset by anyone being rewarded for failure with hard-earned taxpayer
money. But the anger should not be aimed at the recipients of subsidies
as much as it should be launched at the government that enables
arbitrary, economically wasteful and politically motivated transfers.
Why would anyone be surprised that recipients of government cash are
going to spend it as they wish? People naturally pursue self-interest,
which is precisely the reason that it should never be the government’s
role to feed these interests. The entire controversy about bailout funds
going toward executive income would have been swiftly resolved by the
government not doling out any such funds in the first place. The
corporations would then be on their own – as they absolutely should be –
and they can spend their money freely as determined by their
shareholders, directors and management.
But it is not that easy. Obama’s and politicians’ ire is not merely
directed at executives receiving federal funds. It applies to all
high-income executives, even if their salaries were determined by market
forces that are more accurate and efficient than any politician will
ever be. The target is too alluring and the political payoff too
attractive to let the opportunity pass. The resulting distraction is
necessary for a big government agenda. How better to shield against
American anger at government abundantly rewarding failed corporations,
state governments and Democratic projects than by fabricating artificial
anger against golf-playing, jet-flying, fine-dining executives who
appear to be rewarded for failure?
The hypocrisy is everywhere. At least when executives fly private jets,
they are sustaining a profitable industry that creates jobs and wealth.
But when Joe Biden rides Amtrak (which hasn’t turned a profit in nearly
40 years) every day for decades, he is benefiting from a financially
failing and economically wasteful service he and his friends continue to
subsidize with taxpayer money.
And if these politicians are going to attack CEOs for making too much
money, why not demand that the United Auto Workers, who earn drastically
more than their counterparts working for automakers in the south, take
pay cuts too? After all, they are a major reason GM and Chrysler “had”
to be bailed out.
And why are politicians supporting family CEOs – homeowners, that is –
who failed to fulfill their mortgage obligations, while they seek to
punish corporate CEOs?
Well, it’s not that arbitrary after all. One group is a bigger voting
block than the other.
The actions of Obama and the Democrats are economically wasteful and
will stimulate nothing but government growth and their partisan
constituencies. But for Obama, it is necessary to sacrifice CEOs as a
distraction. It is necessary to distract from the fact that several of
his nominees, including Tim Geithner, Tom Daschle and Nancy Killefer
have been drowning in ethical questions that he willingly overlooked
except when they became too politically burdensome to bear.
is necessary for Obama to distract from the fact that he has already
broken a number of campaign promises, by nominating, for instance,
lobbyists for high-ranking roles in his administration. It is necessary
to distract from the fact that the “stimulus” package he is about to
sign is actually a massive Democratic wish list of pork that has been
accumulating since President Bush took office. It is necessary to
distract from the fact that the financial bailout he supported, and
still does, has flatly failed. It is necessary to distract from the fact
he is massively expanding the budget deficit and the national debt to a
degree that cannot even be approached by any corporate executive.
short, Obama needs an unjustified attack on other executives to distract
from his own failures as an executive. He must do so in order to achieve
the change he believes in – whatever that is.
© 2009 North Star
Writers Group. May not be republished without permission.
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