I share our president’s righteous indignation over the spectacle of porcine CEOs oinking away at the compensation trough, awarding themselves Brobdingnagian bonuses, strapping on 24-carat parachutes, and accessorizing their offices with $35,000 antique commodes.
My blood reaches Fahrenheit 451 as I read that only three decades ago, the chief executives of large American companies made 40 times what their average worker made; and that the multiplier is now 360 times.
If CEOs are to be held accountable for their performances, why shouldn’t Senator Dodd, Nancy Pelosi, Harry Reid, and President Obama also be held to account?
Willie Schlamm, one of the founders of The National Review, memorably quipped that “The problem with capitalism is capitalists. The problem with socialism is socialism.” Newsweek’s cover declares, “We Are All Socialists Now.” Wonderful. Thank you, President George W. Bush. Thank you, Wall Street. Thank you, US Congress. Not forgetting you, too, Mr. Greenspan. (“The fundamentals are sound.”) Well done, all!
Senator Christopher Dodd of my great home state of Connecticut inserted a provision in the leviathan $787 billion “stimulus” (translation: “spending”) bill limiting the compensation and bonuses of top executives of companies that receive TARP and other federal bailout monies. Senator Dodd always gives good indignation.
The Times reported, without irony, that the White House is worried that this might cause a “brain drain in the financial industry.” No, we wouldn’t want to lose any of the brains that contributed to the Greatest Caca Since the Great Depression, the minds that came up with subprime mortgages, toxic assets, and credit default swaps. Heaven forbid that John Thain, the commode-squatting former Merrill Lynch boss, might take his brain across the street and go work for the Bank of Iceland.
But distasteful as it may seem, one senses that there may lurk an inconvenient truth behind this fear. Granted, some of the people who run large corporations are unconscionable swine, but they’re canny unconscionable swine, and they may well oink, I’m outta here, leaving our already reeling financial houses and businesses in the hands of, say, mediocre talents, the kind content with earning a mere $500,000 a year and getting bonuses of only one-third of their salaries. Do we really want them in charge?
While we’re chewing on that conundrum, here’s a modest proposal for your consideration, as they say during the runup to the Oscars: Why not impose reciprocal limits on government executives?
If private-sector CEOs and other bigfeet are to be held accountable for their performance—as indeed they should be—why not also hold accountable lavish spenders in the public sector? If we’re stripping nonperforming corporate fat cats of their expensive antique crappers—John, really what were you thinking?—and their $50 million jets and country-club dues, why shouldn’t Senator Dodd, Nancy Pelosi, Harry Reid, and President Obama also be held to account for their performances? Yes, yes, I know we have elections, but why wait two years, or four? Aren’t we being told that there isn’t a moment to lose? Quick, spend $787 billion!
Suppose that, by year’s end, this whale of a bill has demonstrably accomplished nothing other than to add $348 billion to the national debt? ($348 billion being the yearly interest alone of the stimulus package.) Suppose it hasn’t revitalized the US recreational-vehicle industry? Created 3.4 million jobs? Suppose—walk with me—that it turns out in fact to increase inflation sharply while doing little to reduce unemployment and only enlarge government permanently? Suppose, in so many words, it turns out to have been a catastrophe (to use the kind of language that President Obama used to inveigle on behalf of the bill), ill-advised and half-baked?
Congressional salaries are already relatively low, but members of Congress receive all sorts of plummy benefits, in the form of Social Security tax exemptions, medical benefits, and all the rest. If they pass rotten legislation, why shouldn’t they be penalized? Then there are those fact-finding missions on nice government airplanes. Many of those destinations are serviced by US Airways or Icelandair and other carriers. They could probably use the business.
As for the president, his salary, $400,000, has served as a kind of benchmark for rethinking corporate salaries. (We’ll address his perks in a moment.) Senator Claire McCaskill of Missouri wanted to cap salaries of bailout-receiving CEOs at that rate, rather than at the $500,000 arrived at in the stimulus package. Suppose, a year from now, we’re all wearing barrels and selling apples on street corners because the bill accomplished absolutely nothing other than saddling our children with more ruinous debt? Wouldn’t it then be condign to invoke a performance clause?
If a president makes things worse, is he worth $400,000 a year? While we’re at it, how much does it cost to operate Air Force One per hour? And Camp David—how much is that tab per weekend? Or that hothouse Oval Office that Mr. Axelrod cheerfully volunteered “you could grow orchids in”—why should the shareholder, namely the US taxpayer, continue to subsidize a West Wing sauna when we’re being told to turn down our thermostats?
If a CEO’s salary ought to be pegged to (real, as opposed to artificially inflated stock price) performance, why shouldn’t the Congress and chief executive—and while we’re at it, the money-printing governors of the Federal Reserve—be held to a similar standard? Sorry, Mr. President, but Camp David is temporarily closed. But hotels.com says there are some attractive weekend packages at Colonial Williamsburg.
It would be fun to watch Ms. Pelosi and Mr. Reid—and of course Senator Dodd—have a lively floor debate on such a initiative.
We’ll need a name for it. Send in your suggestions. Maybe something along the lines of…TGIF: Troubled Government Initiatives Fix?
Over to you.
Christopher Buckley’s books include Supreme Courtship, The White House Mess, Thank You for Smoking, Little Green Men, and Florence of Arabia. He was chief speechwriter for Vice President George H.W. Bush, and the founder and editor-in-chief of Forbes FYI.