Pay more, get less

Three to five decades ago, compensation for high-ranking business executives was at a level that would seem outright minimal today: 10 to 20 times the pay of the average worker. That ratio, today, is around 500. There’s no doubt about it: top-tier executive pay in large corporations has skyrocketed. Yet the quality of people who become corporate executives is demonstrably terrible: Carly Fiorina comes to mind as a bad one, but far from the worst. To my limited knowledge, she didn’t even break the law, likely putting her in the middle third as far as corporate executives go. In an era of Jeff Skillings and Bernie Madoffs, it seems hard to justify the enormity we observe in executive compensation.

Decades ago, when executive pay was low by today’s standards, companies and the economy were well-managed. Now we pay an order of magnitude more, and what we get is pure, unadulterated dogshit. These trends may be unrelated, but I suspect otherwise. The price-quality curve, as observed in the compensation of corporate executives, has a negative slope, contrary to what conventional economics would lead us expect. This “mystery”, I’ll note, has a relatively straightforward explanation.

The general principle of “pay more, get more” is a result of two factors. The first is that more resources can be committed to a higher-priced product. This is, by far, the strongest contributor to the positively-sloped (“normal”) price-quality curve that most goods exhibit. More labor can be put into a $50,000 car than a $20,000 one. This is intuitively obvious with regard to physical goods, but I would argue that it also applies to human labor, up to a point. People who are paid more can devote more energy to their jobs, having fewer personal worries to distract them. The second, less potent, factor in producing a normal price-quality curve is the increase in competition: pay more, and more suppliers emerge.

There is, almost certainly, more competition for high-level executive jobs in 2010 than in 1960, due largely to the increased pay. But this style of “competition” is not productive. It does not inspire people to be better, more innovative, or smarter, but nastier and more political instead. In fact, virtually every economic study ever done has shown that, while competition between firms leads to a fairer and more innovative market, and this is why monopolies are generally considered undesirable, competition within firms is utterly destructive. It leads to failures of communication, dysfunctional teamwork, bad promotions, backstabbing and horse-trading that preclude any real work from getting done. It encourages people to work longer hours and therefore “harder” (and to risk burnout, nervous breakdown, and other stress-related health problems) but not to work better or smarter. Unless office politics is to become a salable good, it simply does not work. It’s poison.

On this note, look at recent evolution of American corporate life. Work life within companies has become more competitive, with policies like Jack Welch’s “rank and yank”, once considered barbaric, becoming mainstream. Partnership in major law firms, once available as a default to decent performers, is now available only for the few able to dedicate enormous amounts of energy to political horse-trading that has nothing to do with the practice of law. The prospects of professors seeking tenure are even worse, and the politics notably criminal. In short, a whole mess of industries are becoming hierarchical, cutthroat, and hellish, to such a point that very little actual work is getting done, and what is getting done is of low quality due to the enormity of political bullshit people have to stomach in these industries. It’s now a given that most corporate denizens are destined to be career losers, forever underpaid and unrecognized, and that one’s real job is to avoid this fate through any means (ethical, legal, and industrious; or utterly otherwise) available.

We don’t get “the best and the brightest” managing large, billion-dollar corporations. We get psychopathic narcissists drawn by the allure of power and an eight- or nine-figure salary. We don’t get the sort of selfless, enlightened, pragmatic people we want in positions of leadership. We get politically-astute, influence-peddling assholes. Perhaps surprisingly, we’d do better to pay corporate executives far less, in which case we’d stand a better chance of drawing in people who actually want to serve and lead their companies– imagine that!– not narcissists who want to loot them.

If competition within firms is ripping them apart, what about the competition between firms? It hardly exists at all. The CEOs of supposedly “competing” companies attend the same parties, frequently serve on each others’ boards, and have already promised each other safe landings in the event of career adversity (internal or external). The Coke-and-Pepsi competition we observe between corporations is just a show. Corporate executives are more inclined to work together to squeeze more money out of the working and middle classes than they are to compete against each other in any meaningful way.

This may not be formal collusion, and it’s definitely not a “conspiracy”. It’s how upper classes work in most societies, especially in societies like ours, that let them get away with murder (in the case of war profiteers and private prisons, literally speaking). They don’t need to conspire because no one requires them to even hide their malevolence.

At any rate, if there’s an addiction the United States needs to kick, it’s the addiction to its upper class. We handed them a bunch of money in the 1980s because they promised the wealth would “trickle down”. It didn’t. We give them a bunch more money by paying corporate executives orders of magnitude more than any sane logic would dictate, believing we’d see excellent people in the top jobs. It didn’t happen; we got a generation of crooks and slimeballs who crashed the economy several times and damn near broke it in 2008. We gave the rich yet more money in the form of the Bush tax cuts and unconditional bank bailouts. That only produced a massive deficit. Instead of implementing public-option healthcare, an improvement that would shred the pockets of health insurers, we passed patchwork “reform” that will allow them to continue to exist. With virtually every decision we make as a society, we give more money and resources to the upper class, who give absolutely nothing back in return.

This is the wrong way to go. We’ve fed the parasite far too long, and the time to stop is now.

Left means losing: the mindset of the American Idiot

Europeans find U.S. politics shocking and perverse for a number of reasons, foremost among which is that our political culture is so right-wing. In most European countries, the Democratic Party would be a center-right conservative party, and the Republicans would be a fringe party, mostly ignored by the conservative coalition it would have to enter to have any pull whatsoever. That is, clearly and unfortunately, not the case here. The American right wing has such considerable power that it has prevented us from achieving universal healthcare, a minimal qualification for a society that wants to consider itself First World.

Within the context of the Republicrat duopoly, there is no substantial “left” in American politics, and politicians flee from the word “liberal” (note: in the U.S., “liberal” means a left-of-center libertarian) as if the word were cursed. Europeans, although as industrious and productive as we are, consider their welfare state an accomplishment, whereas Americans tend to dread anything within a stone’s throw of “socialism”. This sentiment that holds us back, socially, 50 years behind where we should be, and threatens to drag us even further into the muck of historical failures that we ought to have learned from.

Why is this? I think there’s a simple answer. Despite the rationalizations about the deficit, austerity, and too much or too little government, many Americans avoid even considering the political left as acceptable because they conflate it with losing– class envy, bitterness, external locus of control. They describe leftism negatively as “class warfare”, ignorant of the actual class warfare being waged upon them from above and from the right. In a society characterized by individual overconfidence, and by muddied waters regarding who is winning and who is losing, people are largely free to define themselves as winners or as losers. Who’s to say otherwise? Class identity is, in post-modernity, a matter of perception rather than station. I know three-digit millionaires who feel put-upon by life, and I know impoverished souls who consider themselves privileged. All in all, many people have acquired the association of conservative politics with “success”, and have moved to the right because of this.

American conservatism is the politics of people who want to believe that they are on the winning team. If the actual winning team is pounding them to a pulp, they will identify with their bullies anyway. When reality intrudes, they develop a persecution complex that does not admit defeat, but claims their misfortune is the result of others’ resentment of their success. In the mind of the decliningly middle-class American conservative, “real Americans” are not losing economic ground because of the arrogant and short-sighted mentality that has infected the upper class; rather, they are under attack from foreigners who “hate freedom” and “take their jobs”, freeloaders who are “drinking the water instead of carrying the water”, and “elitist liberals” who hate their simple, morally superior way of life and therefore identify with the supposedly depraved lower classes as a means of subverting traditional morality. In this way, they integrate their fear and sense of persecution into their identity in such a way that they can still cast themselves as winners.

The problem is that these people conflate politics and identity. Instead of politics being a rational debate about how to build a just society, and a debate that allows one’s opinions to change as new information is learned, it becomes an immutable aspect of a person. This is the mindset of a class of people I’ll call the “American idiot”, not necessarily because they lack native intelligence (some do, some don’t) but because of their astounding and willful ignorance. They’ll proudly say “I’m a Republican”, without knowing in detail what that means, just as they’re willing to identify as Biblical Christians without having read most of the Bible, simply because it allows them to identify with the successful. They associate conservatism with an internal locus of control and a willingness to take “individual responsibility”, and liberalism with an external locus of control and a childish need for help.

This is what upper-middle-class liberals, driven also by a fear of American decline and by an attraction to the superior quality of life enjoyed by our European counterparts, miss. As we are educated in economics, politics and history, progressive libertarianism (i.e. liberalism) becomes, self-evidently, the politics of rationality. We’re not bitter communists looking to starve the rich or corrode traditional values. We don’t want a part in the personalized distributive squabbling that seems to characterize the political views of the more ignorant half. Rather, we’re concerned citizens who want to build a just society. However, unless we comprehend and confront the entrenched ignorance we are up against, we will make no progress.

Those who hate a fair fight: Palin and Cheney’s “hunting”.

Last Saturday, Jon Stewart’s Rally to Restore Sanity called for us to set aside ideological differences and work together civilly. It’s a good idea, and the topic of “sanity” is one I’ll return to in future posts. After all, I have friends who, though they value social justice, identify as Republican, strongly oppose deficit spending, and generally believe tax rates should be low. There’s nothing wrong with this at all. There’s one thing. however, that has to go, and that’s the mean-spirited strain of conservatism that emerged among the yuppie “neoconservatives” in the 1980s, simmered in the ’90s, and metastasized in the 2000s. It’s fine to believe that libertarian economics serve this country the best; I think such a person is wrong, but we can disagree civilly and discuss the issue, and we’ll learn something from each other. On the other hand, one who suggests that the poor are poor because they are lazy, and should thus be let to die instead of given help, is simply a smug, mean-spirited bag of ignorance and fail.

Right now, I can’t think of a better symbol of the mean-spirited and barbaric nature of the American right-wing than the “hunting” activities of Republican figureheads Dick Cheney and Sarah Palin.

Dick Cheney, in Feburary 2006, accidentally shot a 78-year-old man while “hunting” quail. Just to make it clear, this style of hunting involves shooting farmed, artificially disabled and nearly flightless, quail at point-blank distance. It’s hardly a challenge, and certainly not a fair fight. The fact that Cheney could fuck up something so easy so cataclysmically as to shoot a man in the face is emblematic of the general incompetence of that administration. Heck of a job, Cheney. Heck. Of. A. Job.

It gets better. Sarah Palin supports the sport killing of wolves by helicopter, a practice most Alaskan hunters consider barbaric. Again, it’s a remarkably unfair fight. The wolf is defenseless, while the hunter benefits from machinery so expensive and powerful that the practice can be compared to the hunting of deer using incendiary bombs. An enormous amount of money is thrown into the endeavor, the outcome is certain regardless of the skill of the “hunter”, and the “accomplishment” is therefore empty. Making a “trophy” of a wolf shot by helicopter is like doing an “end zone dance” after scoring a touchdown against first-graders. It’s nothing more than the cruel obliteration of the defenseless and weak. In other words, it’s pure masturbation for the mean-spirited sorts of people who comprise the American right-wing upper class.

After all, only a rich and socially well-connected American, enriched continually via corporate-board sinecures acquired by favor-peddling, would consider it an “accomplishment” to kill a defenseless, disabled quail at point-blank range, or to shoot a wolf in winter by helicopter. People who are used to actually having to work for things find this notion bizarre, but people like Palin and Cheney would not. This is because they’ve had “trophies” such as positions of influence and opportunities for enrichment handed to them without having to accomplish a single damned positive thing in their entire useless lives.

This needs to be said, because it’s symptomatic of a disturbing mentality that’s emerging in the United States: a right-wing, mean-spirited ideology descended from the 19th century’s “social Darwinism” that holds that those who are powerless and poor deserve to be so, and should not be assisted, but cast away entirely. It also, conveniently, unconditionally coddles the rich; they are held by this ideology to be better people not because they are smarter or harder-working (they don’t have to prove themselves to the peasants). They are superior because they are wealthy. It’s post hoc elitism. It’s perhaps the most self-serving ideology that exists, and it must be eradicated.

There is a place in social discourse for concern with the national debt, the desire to uphold individual economic liberties, and the debate over what social services the government should provide and how they should be delivered. However, there’s no place whatsoever for the mean-spirited social policies of exclusion– the idea that people should be denied healthcare because they are poor or social acceptance because they are gay. This politics of exclusion and hate represent the true ideology– neither conservatism nor liberalism, as corporate capitalism is designed to provide the best of socialism and capitalism for the rich, and the worst of both systems for everyone else– of the American upper class. Such politics, as well, conveniently allow the corporate elites to play divide-and-conquer against the rest, using irrelevant wedge issues to divide us into warring camps derived from stereotypes (God-fearin’ Republicans, libertine Democrats) while inflicting a three-decade, category-5 economic calamity upon the entire country.

This mean-spirited ideology is not something most Americans can stomach. Many who identify as “conservative” have a strong faith in tradition and a healthy (perhaps overactive) skepticism of liberal reforms, but they are not mean-spirited by nature. They want to be the loyal opposition, not ill-tempered obstructionists willing to break the country over ideological disputes or, worse yet, an irrelevant personal dislike for a pragmatic, centrist President. These people, those who Jon Stewart would describe as sane conservatives, I should note, are being royally ill-served by the contemporary Republican Party– even moreso than leftists such as I are ill-served by the Democrats.

This is something I hope all will consider on tomorrow’s election. It’s a defensible belief that taxes, or rent, are too damn high. It’s morally acceptable to vote for a conservative candidate when one believes that person is the most competent to solve this country’s pressing social problems. What’s not acceptable is a society in which the aerial thrill killing of wolves is met with any emotion other than disgust. That’s all I need to say about that.