Executive Avarice, the New American Paradigm?

Lately, the conservative talk radio hosts are bemoaning the fact that these corporate executives who are getting help from the taxpayers, are finally being skewered and grilled by the Obama administration and Congress. But they are missing the point here; the public is outraged at the rampant avarice at the helm of far too many corporations in our society today. It is a gross exaggeration to characterize the exorbitant compensation packages of executives as purely a natural function of free market capitalism.

All that money should come from profits, and not in lieu of paying bondholders back on schedule, nor at the expense of rewarding the shareholders for taking on risk in good faith first. Ethically it would make sense to retire debt as fast as possible, starting with the oldest debts first. By this I mean, retiring outstanding bonds at maturity, or if profits allow, pay a premium to retire them early. This limits company liabilities by eliminating them. Any time a liability is eliminated, stakeholders equity is enhanced. But most companies, like most Americans tend to spend other peoples' money rather freely when times are good and not saving for a rainy day. This is a large part of why we are in the mess we are in now.

Companies are shedding jobs to eliminate the liability of making payroll rather than doing with less profit margin at the top. Shortsightedness; a way of self centered long range planning. Self preservation from the top down is a self limiting strategy because the company cannot produce as much profit with fewer personnel and resources. At some point an equilibrium is reached that is sustainable for present market conditions.

But this is not macroeconomics 101, it is people's lives here. Why is it considered unreasonable to expect that during this temporary economic downturn that executives should forgo such large compensation packages? Everyone else is doing with less. Why shouldn't they too? Let's hope that they would want to do their part like the rest of us. Let's not forget that the automotive executives from the big three have all voluntarily given up large pay packages and that they did this long before they asked for taxpayer help. Rick Wagoner, the CEO of GM has had a yearly salary of just one dollar for the past four years! Now there is a man that gets it (even if he did fly a corporate jet to Washington).

Yet the banks and Wall Street power traders and players are unwilling to give up anything despite the republic's outrage at them for blatantly taking advantage of taxpayers and congress who rushed to there aid even as main street Janes and Joes pony up a portion of their last paycheck from their former employers. This is the definition of avarice, the height of arrogance, the zenith of self-centeredness, and none of these are the principles that our country was founded on.

Yes, Hannity, Rush, Levin and all the rest of conservative talk show hosts ought to be lauded for shinning the light on these cockroaches for outrageous behavior like knee-jerk pork laden legislation. Our political leaders need to be accountable, but so do our corporate leaders. One cannot lead with impunity. Even the Bible tells us that "to whom much is given, much is expected". The public is outraged at the avarice of corporate executives and rightly so. So, conservative talk show hosts, take notice that public scorn is driving the Obama administration and Congress to (re)act the way that they are now doing (to limit executives pay and compensation while on the dole). Your espousing the virtues of capitalism as a requisite excuse for corporate avarice smacks of poor judgement and plain old bad taste.

When times are good, excesses can be expected, but in times such as these, showing a modicum of restraint and true conservatism would be prudent. It is just common sense.