Government officials lecturing anyone on ethics, greed or financial responsibility is as laden with irony as the latest appropriations bill is with pork barrel spending.
With the collapse of several of America's financial institutions along with the impending doom of Detroit's "Big Three" automakers, and the subsequent taxpayer bailouts, buyouts, loans and "stimulus packages" being pushed by both Congress and the President, renewed blame and outrage have been directed towards "corporate greed", and corporate executives in particular. Businessmen are being served up as the very personification of avarice; the proverbial golden parachute being the ubiquitous symbol of the evils of capitalism run amok. Raging lawmakers have called for these evil fat cats to take massive pay and benefit cuts, if not lose their jobs altogether.
The latest example was the GM, Ford and Chrysler executives who traveled to Capitol Hill to ask for a 25 billion-dollar-a-piece taxpayer-secured bailout loan. Lawmakers were outraged. Not because the automakers would come to them with their hands out waiting to get from taxpayers what they cannot get from the marketplace, but because the executives arrived on private jets instead of making the thousand mile round trip in a clean-burning hybrid vehicle, or taking commercial flights. After scolding from congressmen, the CEOs of GM and Ford have decided to return or sell off portions of their private fleet of jets. This as AIG's CEO has announced that he will accept (largely symbolically) a reduced salary of just $1 this year.
Ever thinking of the little guy, Congress and the news media see this as a step in the right direction. But what if the government were held to the same standard as private management? If the government were a private company it would be too broke and uncreditworthy to continue operating. Consider: during the just-completed 2008 fiscal year, the government ran a record annual budget deficit of about 450 billion dollars; the total national debt is over 10 trillion dollars; the national debt has not declined since 1969; both the Government Accountability Office and the Office of Management and Budget have stated that the current fiscal position of the United States government is "unsustainable." Yet who among the political class – the very managers who remorselessly oversee the financial train wreck in their own institution – has called for a pay or benefit cut for the President or Congress, let alone actually taken one? Which officials have curtailed travel by private jet, forgone their annual salary, or cancelled scheduled retreats and vacations? Certainly not Nancy Pelosi, who upon becoming Speaker of the House was granted, ostensibly for security purposes, a military C-40 "flying office" jumbo jet in which to commute back and forth from San Francisco to Washington, D.C. Certainly not Senator Chris Dodd, who received a privileged loan from now-defunct lender Countrywide Financial even as he was pontificating about Wall Street greed from his seat on the Senate banking committee. Certainly not the collective Congress, which has not failed to approve its own annual "cost of living" pay raise for 8 of the last 10 years. Certainly not the President – any president, past or present – who has never agreed to accept a $1 annual salary when the government in his charge has struggled financially and had to borrow from the public coffers. Government officials lecturing anyone on ethics, greed or financial responsibility is as laden with irony as the latest appropriations bill is with pork barrel spending. "He who is without sin . . ." as they say.
So in a show of good faith, I would like to see our federal leaders take the lead in fiscal accountability by refusing to accept a salary until, as they've demanded of the automakers seeking a bailout, they can demonstrate a plan to bring their enterprise into the black and repay their debt. Until then, Congress should just be grateful that, like the fat cat executives that they castigate, their pay is not determined by their performance, and avoid drawing undue attention to the fact with their hypocrisy.
Patrick: This is one of those great ideas that will never see the light of day. The main problem is, government — by design — doesn't operate like a business. It has a constitutionally-protected monopoly of power, and advancemewnt is the result of a popularity contest (the vote), not performance. And, with the Democrats in power, hypocrisy knows no bounds, so the guys who created our financial mess are the ones lecturing us about how they will "fix" it.
To quote from an old movie I once saw. "Great idea. Now forget it."
The private airplane attack on the auto executives is the epitome of demagoguery. Having flown a few times on private aircraft, I can vouch for the efficiency of this form of transportation. Corporate CEO’s are paid big salaries so why should they take an extra day, or more, to fly commercial? It just proves that Barney Frank and his buddies have no solutions and they don’t want to talk about the real world of industry. It is they that need a one way ticket out of DC.
[...] INDEED: "But what if the government were held to the same standard as private management? If the government were a private company it would be too broke and uncreditworthy to continue operating. . . . Yet who among the political class – the very managers who remorselessly oversee the financial train wreck in their own institution – has called for a pay or benefit cut for the President or Congress, let alone actually taken one? Which officials have curtailed travel by private jet, forgone their annual salary, or cancelled scheduled retreats and vacations? . . . So in a show of good faith, I would like to see our federal leaders take the lead in fiscal accountability by refusing to accept a salary until, as they've demanded of the automakers seeking a bailout, they can demonstrate a plan to bring their enterprise into the black and repay their debt." [...]
[...] by their performance, and avoid drawing undue attention to the fact with their hypocrisy. Intellectual Conservative Politics and Philosophy __________________ Walter Mondale: "George Bush doesn't have the manhood to apologize." [...]
Are you telling me those performance reviews at the DMV are pointless? What would your business look like if your customers, by law, could not go anywhere else? I like your commentary but I reserve the right to giggle at the thought of government actually adhering to the same standards of the private markets.
[...] Patrick Mulligan [...]
Dumb. Do elected officials make $50-500 million a year like CEO's? Would anyone be asking CEO's to take pay cuts if they made in the low six figures? And how might elected officials go about supplementing their now substantially decreased income?
This is pure knee jerk nonsense.
[...] Executive Pay Cuts By Publius [HT: Intellectual Conservative] [...]
[...] ago when Joyner started asking about Intellectual Conservatives. Anyway; Patrick Mulligan has a great post on the subject of the bailouts, you should pay attention to: Government officials lecturing anyone on ethics, greed or financial [...]
scenta,
CEO take-home pay in the tens of millions of dollars (which is true of a small number of multi-national, multi-billion dollar companies) is due primarily to stock performance, stock options, bonuses, and other incentives. Most CEOs accept an actual annual salary of a few hundred thousand dollars or less. Personal income tax rates being what they are, it is far more advantageous to accept more tax-advantaged forms of compensation.
Very similarly, our Congressmen receive an actual salary of $165,000 a year, but accept take-home pay of far more when residual and passive private income, plus perks – both taxpayer, and especially lobbyist funded – are factored in. Our President receives a $450,000 annual salary, along with perks including exclusive use of a private jumbo jet and a palacial mansion.
Regardless, by what moral authority can a group of executives who has not paid anything towards their multi-trillion dollar debt or posted an annual profit but 3 times in 40 years, condemn another group of executives for poor financial management? You appear to have missed the point.
[...] http://www.intellectualconservative.com/2008/12/01/executive-pay-cuts/ Share and Enjoy: [...]