There were a couple of recent articles that really disturbed me. I was disturbed not because I was surprised by the discussion or the stories they illustrated. What really hit home to me is the realization that this whole philosophy of greed seems to have permeated our whole society. The quotes are from the two articles, one in the NY Times and the other in the Washington Post that illustrate how far we have fallen as a people. The first quote is from the NY Times.
“Consider financial theory, the cornerstone of modern business education. The mathematical theory that has developed over the decades has proved extremely valuable in general. But when it comes to individuals, the theory runs into some problems.”
“Consider financial theory, the cornerstone of modern business education. The mathematical theory that has developed over the decades has proved extremely valuable in general. But when it comes to individuals, the theory runs into some problems. In effect, it portrays people as nothing more than "maximizers" of their own "expected utility." This means that people are expected to be totally selfish, constantly calculating their own advantage, with no thought of others. If the premise is that everyone would steal the silverware if he knew he could get away with it, and if we spend the entire semester developing the implications of this assumption, then it is hard to know where to begin to talk about ethics”
By ROBERT J. SHILLER Published: February 8, 2005
How Wall Street Learns to Look the Other Way (registration required)
This is the second quote from the Washington Post.
“It's my atavistic sense that his board was not so much fooled as unimpressed. The numbers must have meant little to them, accustomed as they were to the sort of compensation packages that, in a more reasonable age, got Louis XVI dragged to the guillotine. As for Grasso, he was only playing the game he had been taught, couching excess and greed in fancy terms such as "change in control." He had invented nothing, created few to no jobs and produced little to no wealth. In that, he was little different from the people around him. Why me? he must wonder. 'Tis a sad story we tell.”
By Richard Cohen Published: February 8, 2005
My Avaricious Hero (registration required)
When you read these quotes remember they are being written at the same time that our government is using something worse than fuzzy math according to the words of the NY Times to begin the destruction of one of the most successful programs in government history.
“ Americans have to choose. We can have a social safety net that protects our retired citizens from poverty and makes sure they can afford adequate health care. Or we can have a small government with a tax code that has a 1950's mentality in protecting the wealth of the richest Americans at the expense of the middle class and the working poor. We would prefer the first. Some conservatives may prefer the second. But Mr. Bush, in trying to have it both ways, is going to undermine the nation's longstanding social contract with workers and the elderly. The deficit-addicted government that he has created doesn't have enough money coming in to pay for the programs that the public wants and deserves, not to mention the nation's defense.”
When Math Is Worse Than Fuzzy NY Times Editorial Published: February 10, 2005
There is not a day that goes by without some corporate executive racking in another fortune. Often the fortune has more to do with the people the person knew rather than any great skill that they delivered to their corporation. Of course there are exceptions to everything but most often the wealth is spread from an individual to those friends whom he has chosen to bring into his business circle. Some of the people may well be competent, but rarely are they so brilliant as to justify a $10M payment in four months as I saw with one executive whose talent is pretty much limited to being someone who can demonstrate computer programs.
Yet this kind of excessive executive compensation is not that rare. Is it very different from the special retirement plan set up for our legislators that basically allows them to retire at whatever they are making without paying anything into a “trust fund.?”
A society that revels in the excesses of wealth that we see in many corporations and our government is a society that has lost its way. It is almost like there is a whole group of people who believe that their job is to amass more wealth than they can possible use in a lifetime just so others cannot have it.
I enjoy the wonderful things that money can buy, but at the same time I grew up being taught that life was of little value without making things better for the people around you. That does not mean I enjoy giving my hard earned dollars to the federal government, but it does mean that I do not want my retirement to be at the expense of my children's or another person's retirement.
It also means we have to figure out a better way to govern corporations that the current model which tries to police the criminals with other criminals. People on a Board of Directors are there because a CEO or someone else in the corporation put them there. It is hard to bite the hand that fed you. If we cannot find a way to create more humane corporations where the wealth is spread a little more evenly and excesses are eliminated, we are doomed as a society.
The "Titans" of industry cannot keep pillaging our planet and their workers forever. If I could have a vision of the future it would be one where running a corporation meant more than making quarterly profits. If a corporation had its taxes tied to job quality, environmental safety, benefits, and the retirement plan for its employees, then our list of top corporations might look a little different. If you build in some different metrics at the core of your corporations then your society may start to value things differently.
If our legislators could get out of the mode of grabbing as much for their individual constituents as possible and consider doing the right things for the country instead of just keeping themselves in office, then we likely would not be fighting a war that we cannot win and perhaps we could join the civilized world by providing medical benefits for all of our people.
Of course to do all those things we have to care about doing what is right instead of maximizing our individual riches. Somehow I thought that is the way our society should work.
