Tuesday, April 17, 2007


Fairness = Communism?

Let's return to my posting of March 29, "A Booming Economy for Some, Perhaps." Clearly, not everyone is outraged that Circuit City would lay off 8.5 percent of its workforce because it was earning too much money. In fact, a frequent reader of this blog called me a communist, employing a right-wing rhetorical tactic better suited for 1954 than for 2007, an ad-hominem desperate conservatives pull out when they can't think of anything more mature or constructive to say.

"Why don't you just pack your bags and move to a country where communism thrives?" the reader wrties.

Have you ever noticed that many right-wingers have taken it upon themselves to decide for the rest of us who is fit to live in America and who isn't? What gives them a unilateral right to decide who is a patriot and who is an America-hater? Have you ever heard a liberal demand of a conservative that he or she should leave the country? "If you right-wingers can't stand religious pluralism, then why don't you move to Iran?" "If you wingnuts are so scornful of economic justice, maybe you'd be happier in El Salvador!" We don't do that because we believe that everyone has the right to express his or her thoughts and dream his or her own vision for America. We might disagree, and we might not always be very polite about it, but never once have I heard a liberal proclaim "America: Love it or leave it."

Then I have to ask, what's so communist about demanding that average Americans who work hard and play by the rules be rewarded with a reasonable standard of living and a minimal safety net and hope for a brighter future? Is it communist to believe that corporations bear some responsibility beyond mere profit or stock price? Shouldn't companies pay employees a fair wage and benefits? Should regular folks not expect, barring hard times for the comany, continued employment and not to be thrown out into the street for making too much money while top execs feed at the hog trough? Are those really such radical demands? I'm sure J.P. Morgan or Jay Gould might have thought so, but what about the average American?

Our frequent reader, while applauding Circuit City for terminating rank-and-file employees because they earn too much, is quite adamant that CEO Phillip Schoonover earns every penny of his multimillion dollar salary (An admission: I inaccurately reported his compensation as $2.17 million. Actually, he earned $4.5 million in 2006). According to Frequent Reader, Schoonover deserves it as he allegedly must "work 80 hour weeks, take tremendous risk, and build businesses that employ other people, strengthen the economy, and pay almost all the taxes." Actually, Schoonover has only been with Circuit City since last June after hopping around from one company to another for several years. I frankly don't see how he's taking any risk, whatsoever, and if he's actually built a company from the ground up himself, I see no record of it. He could run Circuit City into the ground and walk away a millionaire, plus a cushy bonus, I'm sure.

Let's take a look at some more inspirational Horatio Alger types that Frequent Reader no doubt worships for their dedication and risk-taking and see how they did over a four-year period from 2001 to 2005 (Source: MSN.com):

-- Gary Smith. While at the helm at Ciena Corp., stocks lost 93 percent of their value. Smith's compensation: $41 million.

-- Jure Sola. His tenura at Samima-SCI was marked by shares falling 78 percent. Sola's compenstaion: $26.4 million.

-- Scott McNeely. Shareholders at Sun Microsystems lost 76 percent of their investment, but McNeely probably isn't feeling their pain. His compensation: $26 million.

-- Larry Johnston. He drove Albertson's into a shell of its of former self, but don't cry for him. Johnston's compensation: $76.2 million.

-- Peter Dolan. If you bought stocks in Bristol Myers Squibb, you're probably not happy that you lost 48 percent of your investment. But Dolan is pretty happy, I'm sure. His compensation: $41 million.

These certainly are not isolated instances. We recently saw executives at American Airlines celebrate its recent turnaround by awarding themselves $175 million in bonuses, while pilots, flight attendants and other average employees got nothing. The turnaround resulted largely from rank-and-file employees agreeing to pay cuts of 15 to 23 percent.

And I'm a communist for believing that something's wrong here?

Apparently, I'm not the only communist here. Warren Buffett, a notorious Bolshevik, and Standard and Poor, notorious for their desire to redistribute the wealth to the poor and people of color, believe that top execs should make no more than about 15 times the average employee's salary. That would put executive pay in the mid-to-high six figures, not eight or nine figures. We can look at companies where this is the rule, such as Whole Foods, where a salary cap was raised to 19 times the avearge salary. Current top salary is capped there at $608,000. CEO John Mackey, who actually did build up Whold Foods, recently accepted a slaary of one dollar plus benefits, saying he's made plenty of money over the years and he simply enjoys running the company.

Nobody said everybody in America should earn the exact same salary. Nobody said that corporations are obligated to maintain fat payrolls it cannot afford. Right-wingers who charge that people say such things merely want to dismiss us with a little juvenile name-calling into a ridiculous margin. I refuse to let them place me there, as convenient as it might be for them. Instead, I'll firmly speak loudly and demand that corporations pay employees fairly and provide them with standard benefits like affordable health care.

Is that really so communist? If so, then the free market is in big trouble.

Dear Mouth,

Hey man, where's the Love? While always falling off the left end of reasonableness, there used to be an air of fairness, love, and desire to find the truth. Your post as of late have fallen closer to the Rosie O'Donnell/Alec Baldwin camp of hate and lies.

This doesn't fit you. I don't believe this is who you are. I suggest you take a break from politics. Stop watching the evening news. Eat some Ice Cream, smoke a good Cigar. Heck, go get you one of those Budweisers right from the plant where you live.

Life is too short to be so mad, especially when guys like you and I can't really make that much of a difference any way.

I used to contribute more to your blog, and even blog a little myself. But then I thought, hey, life is hard enough without fighting a battle that I can't win. Sure, writing is a good way to clear your head and clarify your thoughts, but perhaps you should write about IDEAS. That's one of the Democrats biggest failures - they don't have any idea, just criticism. Ideas are positive, hopeful, exciting. They rally people and make them think. I say, instead of using this blog to cut down the right and talk about everything that is wrong, use it to talk about how we can make things better. Positive writing is the hardest kind - it requires much thought, and creativity. But you ARE an excellent writer, a thinker, and well, you used to be positive.

Finally, I need to point out that I did not call you a communist. Check the post - it didn't happen. I did suggest that your attitude was closer to communism than capitalism. Also, I didn't say that Phillip Schoonover earns every penny of his multimillion dollar salary - although he may. CEO's are like star atheletes. They are hired on and promised large sums of money because they 1.) are a rare commodity, and 2.) the company believes that they can help them to make many, many times their salary. Sometimes the CEO's do great, and sometimes they don't. Just like star athletes, the contracts are honored either way, and then sometimes they are let go. When they are, they'll have a harder time making that much again if the corporate world believes they did a bad job (note that CEO's can do a great job and the company can still lose money)
Whoops, that might have been a little over the top, indeed. Perhaps I'll see about getting that Prozac refill.

I do think there's an overall larger point to me made, however. Most of these CEOs do little to nothing to benfit their companies. Instead you have a good ol' boy system of executives who serve on each other's boards. It's incredibly galling that some exec can run a company into the ground and walk away with eight figures. Meanwhile hard working folks are getting screwed. Corporate America should beware: If the average American begins to think that hard work and playing by the rules in the long run, then look out. They could be heading for type of government regulation and labor organization they'll really hate.
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