Monday, June 23, 2008


When companies make a bazillion dollars in profits their CEO's give themselves a bazillion dollars too. Only the top guys clean up because only top people can perform the miracles of profitability. Sometimes the miracle is performed by firing lots of the ordinary people who do nothing but make and sell the product. Jack Welch, the greatest CEO of them all, fired ten percent of the managers every year. At GE having the bad luck to work in an underperforming division or being stuck with a product that had a slow year (consumers have whims) lost you your job pronto. Jack said he was doing these people a favor. But up or down, rain or shine, CEOs always win.

Last year CEO pay went up 3.5 percent from the year before. These guys made an average of 8.5 million, which is about as much per hour as average employees make in a year. Companies struggled, stock prices went down, lots of people were fired and laid off, product sold slowly, and companies maneuvered with glacial ineptitude to counter these changes. Despite everything the CEOs made out like bandits. Where are the natural consequences? Why do regular people get thrown out of their jobs and see their pay stagnate while top people win no matter what?

Let me propose a corrective. If companies cannot cut their CEO compensation to match their stock performance, let the government do it. Tax away the amount the CEO made in excess of stock gains, and give that money to the workers who worked their brains out and lost their jobs or had their health care taken away. Sounds fair to me.

I would call it the Schadenfreude Act.

Thursday, June 12, 2008

American Consumers are Brave (obedient) and Independent (foolish)

Americans seem to like lax food regulations, even if it means regular bouts of violent illness. Now it's gotten to tomatoes. I never thought it would get that far.

The argument you often hear from people who are afraid of Democrats and their "cumbersome regulations" is that we're all grownups and can look after ourselves. I expect to see the stores flooded with affordable equipment for doing your own tomato, cattle, chicken and various other inspections. The only remaining problem will be the gas for each of us to drive to every feedlot and food processor to do the double-checking we feel uncomfortable asking food producers to pay for or our government to do with tax dollars.

Gosh, how can we ask food producers to pay for safe products? How fair is it for the government to make surprise inspections to see if meat processors are processing downed cattle? Heck, nobody gets the horrible degenerative symptoms of Jakob-Kreuzfeldt Disease for years after eating the hamburger anyway (by which time it's luckily impossible to prove which hamburger did it) but try telling that to most of the civilized world who are such babies they won't import our beef. Americans may be fools, but we are not babies. We are brave, and we are cheapskates, and far too polite to inconvenience a large food company by asking them to be more careful if it costs them money they would rather pay to themselves in excessive bonuses and stock options. Some of these so-called "safety measures" might even require employing more people instead of doing it the quick and cheap way or all by machine. Anyway, it's patriotic to eat what we're told and not complain or do anything that might raise taxes. I like it when my chicken tastes like chlorine; it means I've washed it thoroughly with bleach.

I heard someone on the radio say it again today: "If we make them install safety equipment or observe ordinary food hygiene they might pass the cost along to us!" (How dare they!) Americans would rather spend a few hours throwing up than inconvenience large food producers. Which is why our food supply is the envy of the world,except the majority of countries who now won't import our products even now that the low dollar has made them cheap.

If you don't believe in the magic of an unregulated marketplace, just look at the deregulated mortgage business and the deregulated oil business. That was magic. It took money out of millions of pockets and put it into a few pockets and we never saw how they did it.