South City Mouth

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.