Thursday, January 29, 2009

On Predator CEO's

James K Galbraith in his new book "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too" offers a description of the process by which American CEO's subordinated the interests of their companies to their own interests:

Should any CEO of a publicly traded company ever be authorized to pay himself $100 million a year? The question is not one of aesthetics or morals. It is rather, is it possible that a chief executive paid in this way will act in the interest of the company by which he is allegedly employed? Or will the CEO, as a matter of course in this situation, simply view the company as a personal servant? . . .

First, corporate chiefs began to feel interchangeable; their credential was not as the leaders of a particular enterprise but as a CEO per se; the credential for becoming one became, to an increasing degree, that of having been one somewhere else. Thus the recruitment of new CEO's became in part a game of musical chairs among corporations. Wall Street wanted men (and an occasional woman) with experience in cutting costs and driving up stock prices. CEO's therefore began to identify with one another as a group instead of with the companies with which they were affiliated. Instead of pursuing the committee-driven interests of the company -– a process from which by lack of deep immersion they were to a degree foreclosed, and to which they would be, in any event, institutionally hostile -– many naturally came to focus on the truly important business; that of moving up in the class rankings of CEO pay. At the same time, those in the technostructure could easily see that the corporate game had changed. What had formerly held together as a collective enterprise would now become, in many instances, a game of everyone for himself. From this, the step to looting is not large.(Kindle Reader marks 2137-2160)
I wouldn't hold my breath waiting for these looters to ever see the inside of a jail cell.

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