Lets Take the Private Jet to the Welfare Office

The Young Turks (TYT) have covered a report by ABC News‘ Brian Ross, in which Ross shows Major auto industry CEOs from General Motors and Ford flying in multi-million dollar $20,000 per flight private jets to Washington DC hearings where they begged for requested multi-billion dollar government hand-outs bail-outs. “We want to continue to play the vital role that we’ve played for America for the past hundred years, but right now in today’s circumstances we can’t do it alone”, says GM CEO Richard Wagoner.

[IMPORTANT UPDATE: SEE BELOW]

I realize that when a corporation is trying to recruit the best possible executives, they need to offer enticing packages to lure the most sought after individuals. But what kind of people claim to be requesting bilions of tax-payer dollars (provided by people with FAR less money than them) in the best interests of the nation while they have been and refuse to stop living like kings among kings? Ford CEO Alan Mulally specified that his organization has shut down 17 plants and reduced their workforce by 51,000 jobs. So 51,000 jobs are slashed while the private jet remains? And these jet-setters are the one’s holding the tin cup – in the interest of the nation?

Again, I realize that competitive and secure employment packages need to be offered in order to attract top-level corporate leaders. I also hope (naively) that the money will be fully dedicated to the best interests of the workers. I guess the sort of scenario we are witnessing unfold here is just a straight-forward biproduct of a social system of immense economic and political inequality that regularly sees power and wealth triumph over people and principle.

One criticism of TYT’s Cenk Uygur’s commentary. He points out America’s need for the return of real journalism. He points out how uncharacteristic this Brian Ross piece was in that he asked the sorts of frank relevant accountability-seeking questions that journalists very rarely ask to politicians or powerful economic elites. He says that if he were the ABC News big wigs, he’d double Brian Ross’ salary and then point to Ross’ pay raise to motivate other journalists to do similar democracy-upholding journalism.

As well-intended and wonderful as these ideas sound, they’re not practical because of the very corrupt nature of the system that we are talking about. I’m personally quite surprised that ABC News ran this story in the first place. Here’s the problem: ABC News is a private business. They have a CEO, a board of directors, and stockholders. The same is true of all of ABC News’ competitors. They are subject to the same overwhelming economic pressures as every other corporation out there. In order for executives and people on the board of directors to keep their jobs, they need to keep the shareholders happy. And in order to keep the shareholders happy, they need to compete well against their own past economic performance, against their direct competitors and against the market as a whole. Basically, they need to make as much money as possible as fast as possible. And how do they do this? By keep the advertisers happy. The advertisers are where the money comes from. Yes, the advertisers are advertising to viewers and so the viewers must be kept happy, too, but just how much does the viewer really expect? Not much. Television news programs along with newspapers (which are subject to identical pressures) is where most news consumers get their news. If all the news programs are singing the same tune, they’re often not going to know the difference anyway.

But executives of major corporations, boards of directors, trade lobby groups (e.g., auto industry associations), and corporate/commerce lobby groups (e.g., the US Chamber of Commerce) are absolutely going to know the difference. Most news consumers aren’t gonna know that none of the major news agencies didn’t call in Noam Chomsky to speak with Katie Couric about transnationals in third world countries. Most news consumers aren’t going to know that the news agencies didn’t give as much attention to these deaths versus those deaths. Ditto coverage (more like non-coverage) on environmental degradation, lax regulation on the chemical industry, and so on. But the economic and political elites who have vested interests in cheap third world labor, access to these or those markets or resources, cost-effective but environmentally harmful industrial procedures, and/or getting new products to markets will know the difference. And – as primary customers and members of powerful corporate unions (lobbies) – they have the power to strike devastating economic blows on News agencies gone rogue.

Given the comprehensive economic-political stranglehold that has gripped the news media for many many decades, real journalism cannot be expected. The insufficiently-regulated free market in the sphere of mass media has killed real journalism and has significantly choked out real democracy by keeping the mic out of reach out of nearly everyone and running all potential news stories through a filtering process that systematically distorts, highlights, de-emphasizes, or simply ignores real world events so as to present the world in ways most favourable to advertisers, owners, and other bodies (e.g., governmental bodies) that the news media is subject to.

As I said above, I am surprised that ABC ran this piece. I’m interested to see what types of repercussions such malfeasance will provoke from corporate customers both within and outside of the auto industry.

———

UPDATE:

CNN reported earlier today that the GM and Ford CEOs said “no” to an offer in which the corporations would receive government aid in exchange for the two CEOs seeing their salary for the year reduced to $1. I’m not going to assess this stance. Surely it would have been a wonderful gesture for them to have done this, as Lee Iacocca had done in the 1980s as CEO of Chrysler when he had to request a bailout. Surely these men already have stunning amounts of money and other sources of income (e.g., stocks). But I can understand that they didn’t live the life they’ve lived, climb the ladders they’ve climbed, to just give away 16 million dollars and work like a dog for a buck.

GM CEO Wagoner also claimed to have already taken a significant wage decrease and has given up other forms of compensation. However, I’d still argue that given the remarkably tough times that we are in, far more is called for. I can anticipate an economic conservative countering that it is his money which was offered to him in a free and open contract negotation and that he has no obligation to give any of it to anyone that he doesn’t want to give it to. And then we’d end up getting down into a long philosophical-political-moral debate wherein I begin questioning the very legitimacy of a system that allows for the accrual of substantial amounts of excess wealth, given its consequences with regard to democracy and equality and, by extension, all subsequent political issues.

Comments
8 Responses to “Lets Take the Private Jet to the Welfare Office”
  1. ozatheist says:

    the GM and Ford CEOs said “no” to an offer in which the corporations would receive government aid in exchange for the two CEOs seeing their salary for the year reduced to $1. I’m not going to assess this stance.

    I’ll asses it for you then. They are a bunch of overpaid, pig-ignorant, greedy, arseholes.

    So they would rather see hundreds of thousand workers lose their jobs? As you say, it’s not like they’ll be broke.

    As I was saying on a recent post, one of the bank CEO’s package rose from $6.5M to $8.6M, what I didn’t point out was that of that $2.1M raise about $1.75M (if memory serves me) was shares in the company.

  2. L. Ron Brown says:

    Oz: Hey, yeah, I think I may have to go and side with you. I didn’t have time to fully assess it last night so I thought I’d go with what I thought was a less aggressive stance. But upon further thinking last night, I started to think more in line with the idea that when tough times come and you have the ability to make or break thousands of entire families’ livelihoods or protect a segment of your immense wealth, the former choice seems to be the far more Golden Rule-ish to me.

  3. Mark W says:

    Hey Ron, good to see you back writing.

    As much as I agree that it ‘looks’ bad to fly private in this situation – the reality is that high level executives fly private to everything under corporate policies and regulations. Private flying may cost, but it offers significant advantages for executives – including being able to fully utilize computer/phone services in private and have discussions – either on the phone or with fellow execs on same trip – which are high sensitive such as the company’s financials and strategic plans.

    In case anyone is wonder, the main difference between the employees at the bottom, and moving up the management ladder is how far out the planning is and how deep the inside knowledge of how the whole operation works is. An individual contributer knows the day-to-day operations, a manager looks to current projects and what’s coming in the next quarter or two, directors will see out strategically to the direction of his division, and executives are planning out potentially years in advance – hence they are involved daily in highly strategic discussions and have extensive insider information.

    I’m not trying to make excuses, but believe me, there are good reasons for executives to fly in private corporate jets.

    Cheers!
    Mark W

  4. L. Ron Brown says:

    Mark,

    Valid point, sir. I hadn’t considered that.

    At the same time, though, there remains the issue of their inflated salaries. I can see another counterpoint to them seeing their salaries cut down substantially – what about the people right below them? The CEO wouldn’t like being singled out such that the VPS and members of the Board of Directors all made multiple times more money than he did. So would they take a paycut, too? Then they’d be feeling bitter relative to the people right below them? In order for such feelings of relative injustice to be quelled, it might be necessary to make paycuts all the way down the company, top to bottom – except, *perhaps*, for the very bottom rung or two. And I imagine that every person in the company who felt that their job was secure would be against this – and these people, of course, would as a group wield more power than those who were less confident in their job security.

  5. Chris Ringwood says:

    Hippie: WHY DON’T YOU DOWNGRADE TO COACH YOU GREEDY HYPOCRITICAL CORPORATE PIG!

    Wagoner: Pfff. I’m not sitting in coach with the rest of those conformists.

  6. Mark W says:

    Salaries are indeed out of whack for executives. The problem there is that there was a lot of companies who viewed their CEOs as providing an ‘image’ for the company, and if another company, especially a competitor, were to steal the CEO by offering better compensation, it could be disastrous. Imagine if Steve Jobs had left Apple and gone elsewhere. Steve is an icon for Apple and Apple compensates him likewise. The point here is that executive salaries aren’t just based on what they ‘do’. That said, I agree executives are paid irrational amounts of money.

    Cheers,
    Mark W

  7. Mark W says:

    Ok, now this is going too far!!!

    GM Asks U.S. FAA to Bar Public Tracking of Leased Corporate Jet
    http://www.bloomberg.com/apps/news?pid=20601087&sid=afrKemH3i.2Y&refer=home

  8. ozatheist says:

    New Update.
    It appears that the Ford and GM CEOs have gone back to the government cap-in-hand. They have agreed to the $1 wage and forgone their management bonuses.

    This time they travelled by hybrid cars and they have also put their private jest up for sale.

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