“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Monday, November 14, 2005

to bring the neo-liberal hero to life

To bring the dead to life
Is no great magic.
Few are wholly dead:
Blow on a dead man's embers
And a live flame will start.

Let his forgotten griefs be now,
And now his withered hopes;
Subdue your pen to his handwriting
Until it prove as natural
To sign his name as yours…
- Robert Graves, “To Bring the Dead to Life”

Graves biographical method of going from the outside in is useful in bringing the neo-liberal hero to life. It is no great magic to imagine any European politician receiving the undiluted affection of American journalists. Given an X in, say, Spain, let him proclaim the need to reform the labor market; let him speak of tax cuts; set him up before audiences of working men, where he can frankly tell them he means to attack their standards of living – and they will applaud him fiercely, of course. Let him say that we have a few things to learn from America. And let him praise the free market, and let him be frank. Among the journalists who write of Spain, then, the story will soon form itself: of how our X is gaining popularity; of how our X is going to effect a revolution; of his humble origins and of his great future. If X is a woman, she may be Spain’s Maggie Thatcher; if a man, Spain’s Tony Blair.

In “Waiting for Sarko”, the Atlantic Magazine’s September love letter to France’s interior minister, Sarkozy, the elements are laid out precisely as with the mythical X. It is important that the neo-liberal hero be a kind of outsider – Merkel being a woman from East Germany was perfect for that part. Sarkozy is “The middle son of a bourgeois Hungarian immigrant in the 17th arrondissement of Paris.” If the X is from a powerful, insider family, like Chalabi, well emphasize that the family was exiled, dispersed, broken up, impoverished. This is important, because the Neo-liberal hero’s act is to take money from the working class and give that money to the rich. As countless fairy tales have taught us, such people are villains – Sheriffs of Nottingham and the like. If we are going to reverse the moral brunt of the fairy tale with our new, reformed fairy tale, it is best to view the working class as a special interest – and the institutions that have grown up around the social welfare model as insiders, while the corps of upper management, in this tale, becomes a band of Merry Men. This is a sort of hard switch to make, so it is best to make it all at once.

And then there is Sarkozy’s proclaimed affection for the American model. A courageous politician to proclaim such a thing in “an anti-American” country like France – but our neo-liberal hero, having read his Ayn Rand, is an individualist:

“"Where do we get off looking down our noses at countries that have half the unemployment rate we do?" he said matter-of-factly to an audience of students at the Dauphine campus of the University of Paris in May. "Don't we have an interest in looking for models elsewhere? We don't know how to do everything. Voila. I've said it. We might have something to learn."
The students burst into hurrahs. "I said it," Sarkozy pressed on through the clamor, "and if I say it, it is because I believe it profoundly. A little benchmarking, as you say here at Dauphine, wouldn't hurt.”
Yes, indeed, French students, radical lefties all, applauded the man like mad. But wait, what is this about benchmarking? Oh, the Dauphine campus is the University’s Business school. So, business students applauded him like mad about – increasing their chances for wealth and power.
The neo-liberal hero cannot, however, look entirely like Reagan or Thatcher in the American press, since the audience might be composed of some few who don’t regard Reagan and Thatcher as the highest elevations of the human spirit in its struggle to the stars. So he is most safely seen as that most approved of all the animals on Noah’s ark, the Centrist Democrat:
“Like Godot, Sarko is what you want him to be, and there are plenty who are skeptical that he is any different, or holds any different convictions, from the rest of the French political class. By French standards he is a man of the right, which would place him on the middle-left in the United States. Where Chirac is an ardent Gaullist, Sarkozy is described as an "Atlanticist." He talks a modestly free-market line and is often savage about the cuckooland of French labor law and even the sorry state of the French work ethic. These views may explain why, according to the rumor mills here, Sarkozy is beloved of the Bush administration--the kiss of death, of course, for a French politician.”
That a rightwing leader would savage French labor law – a cuckooland compared to the cool American alternative, which is a race for the minimum wage and the bankruptcy court in which the corporation can purge itself of those cuckoo contractual promises of pensions and health care – is presented, of course, as a rare thing. This tickles the American fancy, which, when not ardently believing that France and Germany are collectively poorer countries than the state of Mississippi – a rightwing meme with an astonishing vigor – is convinced that France is the new Soviet Union.
And so onto the cuckooland of the new, pensionless corporation. Today’s business paragon is Delphi corporation, which has bravely decided to throw its pension obligations at the foot of the American taxpayer. The wondrous Gretchen Morgenson’s Sunday article in the NYT, “Oohs and Ahs At Delphi's Circus,” should be read by anyone who can get their hands on it – it is behind the NYT payment barrier, but those with library access should be able to get it for free. Delphi, remember, is the spin off from General Motors that is being lead by the most quoted man in America at the moment, Robert S. Miller. Morgenson puts the story in a nutshell thusly:
“Delphi, which has 185,000 employees, argues that its woes are a result of high union wages, a fiercely competitive industry and rising commodity prices. The company plans to turn itself around, according to its lawyers, by improving its manufacturing and ''eliminating noncompetitive legacy liabilities and burdensome restrictions under current labor agreements.'' Put in plain English, that means dumping its pension liabilities on American taxpayers and cutting its workers' wages and retirees' health and life insurance.”
Here’s a case for a neo-liberal hero, and they are delivering. But the ultimate plan is, of course, to deliver the company from bankruptcy. And the management must get paid for that, n’est-ce pas? So Morgenson reports on the compensation plan for upper management submitted to the court by a “compensation expert,” Watson Wyatt. It is a hoot. Rarely do you get such a gorgeous glimpse of the CEO ethic in action. Even Al Capone didn’t propose to rob quite so openly, and to use the court to do it. Here are some highlights:
“Interestingly, nowhere in the plan filings does Delphi concede that mismanagement in the executive suite had anything to do with its problems. In fact, the documents draw a picture of a company that has been managed splendidly over the years. Never mind that Delphi accounting practices are under investigation by the Securities and Exchange Commission or that the company has recorded losses of $6.3 billion in the last seven quarters.”
The loss of money on that scale, to Watson Wyatt, shows management skills of a high order. And they must be compensated in a competitive way – one doesn’t want a group that can lose 6.3 billion in two years to be taken away by some greeneyed other company! To keep the top four execs, we are talking about $3.1 million a year in salary. Peanuts of course. What we really want, to keep them running the company like the model MBAs they are, are the little extras:
“The incentive bonus program, to be divided among an unspecified number of Delphi executives, has an estimated cost of $21.5 million for the first six months, Watson Wyatt said. That amount equals the entire compensation paid for all of last year to Toyota's 33 top executives, a group that oversees a highly profitable company in the automotive business.”
Why, of course! This is America, not some place with a cuckooland full of lousy labor laws. Neo-liberal heroes everywhere realize that this is a sort of, well, benchmarking. We are benchmarking just how servile the American spirit is.
And then – ah, you thought that Delphi was going to be chintzy, didn’t you? You thought that the 21.5 million per half year was the most that could be squeezed out of a company that can’t afford to pay its retired workers their health benefits. That is why you, reader, are not in upper management. One must learn to think big.
“But wait, there's more. An additional $88 million in cash would go to Delphi's top 500 employees when it emerged from bankruptcy proceedings or if the company's assets were sold. The top four executives -- again, excluding Mr. Miller -- would receive a total of $8.9 million of this, or 10.1 percent.”
Graves poem about bringing the dead to life ends like this:

“So grant him life, but reckon
That the grave which housed him
May not be empty now:
You in his spotted garments
Shall yourself lie wrapped.”

Which, god help us, seems to happen not only to the biographer, but to those countries that conjure up the neo-liberal hero, and end up lying in a grave of an ersatz America, the banks re-financed from the public till, the currency collapsing, the frenzy of consumerism turned into a frenzy of unemployment. Argentina, Mexico, Venezuela, Peru, New Zealand… so it goes.


Brian MIller said...

But...But...CEOs are SPECIAL. They've taken an industrial machine and off-shored it and ruined the long term survival of the American economy, but my god, they's sure invented all kinds of neat ways to repackage debt, game the political system, and screw their employees and communities. That says "special" to me.

I grew up in Fort Wayne, Indiana, hoem of an International Harvester truck assembly plant that employed ten thousand folks. Harvester was so mismanaged that the plant closed, but Good Ol' Archie McCardle sure got a nice golden parachute.

I hate to get all clkass enemy on you, but shouldn't the Chamber of Commerce be tried as traitors, as a class? :)

roger said...

Instead of a trial, I'd much rather see the collusive nature of the upper management labor market broken up. What, after all, is this shit about compensation "experts"? Isn't this what the rightwing likes to deride as a closed shop?

Since corporations have to incorporate themselves with the state, the state has, in theory, the ability to regulate the management of these organizations. And they should exercise that regulatory power by requiring that due diligence be done on upper management hiring practices, especially as they now constitute one of the major costs of business. Instead of justifying a competitive compensation package, they should be justifying from a base compensation package --the lowest compensation package, that is. The lowest is easy to find -- you can go to the Fortune 500 and find out who is making the least. Anything above that least should be justified by a multiplier.

Ultimately, the set of disincentives to gross executive overpayment has to include taxes and corporate regulations. One of the reasons for the explosion of CEO compensations after 1981 was that they actually wouldn't be taxed away. This was one of the malign effects of the Reagan tax cuts on the wealthy.