Executive Pay and Globalization

 In the Lexus and the Olive Tree, Tom Friedman has a catchy chapter on the dangers of a winner-take-all, free-market society--the kind of society rewarded by processes of globalization. He uses a professional basketball analogy to make his main point. A few top competitors--those like Michael Jordan or LeBron James--reap massive rewards, while the average competitors in the market--the lesser-known teammates of the superstars--get much less. Friedman's concern is a real one: How sustainable is a team that includes both mega-rich and not-so-rich players? We have cause to worry about the erosion of social solidarity between the affluent and the ordinary.

U.S. income data since the 1970s suggest that this concern is valid. "The rich are getting richer, while the poor are getting poorer" is one of those thoughtless cliches that turns out to have some truth in it. The undisputed fact here is that the top 1% of income earners now account for at least a quarter of the nation's total income.

But who are these people and how do they get their money? Are they executives, doctors, lawyers, or financiers? According to a recent study of tax returns by three researchers reported in today's Washington Post, "executives, managers, supervisors, and financial professionals" accounted for around 60 percent of this group by 2005. Executives, managers, and supervisors alone were 40 percent of the group. 

The study itself is pretty dry material for the average reader, but the Post story by Peter Whoriskey frames their findings with a comparison of the top executives at Dean Foods, a Fortune 500 national dairy company. 

His lead paragraphs capture the reality of today's executive compensation problem:

It was the 1970s, and the chief executive of a leading U.S. dairy company, Kenneth J. Douglas, lived the good life. He earned the equivalent of about $1 million today. He and his family moved from a three-bedroom home to a four-bedroom home, about a half-mile away, in River Forest, Ill., an upscale Chicago suburb. He joined a country club. The company gave him a Cadillac. The money was good enough, in fact, that he sometimes turned down raises. He said making too much was bad for morale.

Forty years later, the trappings at the top of Dean Foods, as at most U.S. big companies, are more lavish. The current chief executive, Gregg L. Engles, averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time — two in Texas and two in Colorado. While Douglas’s office sat on the second floor of a milk distribution center, Engles’s stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the company’s $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal.

Meanwhile, as Whoriskey reports, 

while pay for Dean Foods chief executives was rising 10 times over, wages for the unionized workers actually declined slightly. The hourly wage rate for the people who process, pasteurize and package the milk at the company’s dairies declined by 9 percent in real terms, according to union contract records. It is now about $23 an hour.

The concern here is about relative gains. The ordinary workers, probably because of union power, are not destitute; $23 an hour is a decent wage. But their share of the overall wealth generated by the company is declining, just as ordinary workers' shares of national wealth are declining. And whose shares are gaining? The bosses'.

CNN reported in 2007 that the average American CEO was making 364 times more than the average American worker. With stock options and salaries and all the rest, the top bosses were doing quite well, even while they were downsizing and outsourcing and union-busting. As a result, CEOs became the single largest group within the top 1 percent of American income earners.

Back in the day people like Kenneth Douglas were willing to turn down raises out of a sense of solidarity. But people like Gregg Engles--and other winner-take-all executives--are jeopardizing the stability of our society. They might blame globalization, but they we all know that greed is the real problem.

Bahrain and Saudi Arabia

In today's New York Times, columnist Nick Kristof posted an open letter to King Hamad of Bahrain, requesting the release of Hassan al-Sahaf, a 57-year old Shia moderate. Like many other Bahrainis, including relatives of our friend Shubbar, al-Sahaf remains under arrest. Here's hoping that King Hamad will listen to such reasonable voices and free political prisoners. We're thankful that our friend Shubbar is out, but we won't rest until all the unfairly detained political prisoners are free.

Today's Times also has a story by Neil MacFarquhar on how Saudi Arabia's King Abdullah has spent $130 billion to buy off opposition critics and forestall the kind of pro-reform protests that have rocked nearly every other Arab state. In addition to deep pockets, the royal family has a loyal religious establishment that has been preaching against revolt as un-Islamic. And the police have arrested anyone with the temerity to test restrictions against public protest.

As a result, and contrary to my expectations, the al-Saud family has managed to forestall any major protests, turning an announced Day of Rage on March 11 into a Day of Duds. Given the lack of protests so far, the al-Saud family wins the Donkey award for the most skillful use of carrots and sticks. 

But will this strategy work in the long run? As MacFarquhar writes, 

Saudi Arabia’s efforts have succeeded in the short run, at home and in its Persian Gulf backyard. But some critics call its strategy of effectively buying off public opinion unsustainable because it fails to address underlying problems.

Keep watching Saudi Arabia. The Arab Spring hasn't ended yet.

Freedom!

Good news! After 50 days of detention, our friend Shubbar was freed. We were in Italy, with limited Internet access, when we got the news, so it took some time to get the word out after we got the updates from Hajar and Shubbar. Sadly, Shubbar's father-in-law and brothers-in-law remain in captivity.

Bahrain remains under a state of siege, as the McClatchy reporter Roy Gutman has shown in a series of informative dispatches from the island, including a recent one on Bahrain's plans to sentence two protestors to death. Pressure from the U.S. may have contributed to a slight easing of the crackdown.

Whatever the cause, we're just glad that our friend is free.

Finally . . . Al Jazeera Picks Up the Story

It's about time. Al Jazeera English is finally telling the story of the crackdown from the perspective of detainees' families (similar to our friends Shubbar and Hajar).

Check out this story, which includes footage of the crackdown and an interview with the wife of an abducted man.

AJE also ran some of the first video confirming reports that the government of Bahrain has destroyed over a dozen Shia mosques:



Interestingly, someone in Qatar has decided to start pressing the Obama Administration to protect human rights. We'll see if this shift convinces the Obama team to press their allies in Manama a bit harder. There may be a voice for the voiceless Shia in Bahrain after all.

Human Rights Abuses in Bahrain on Al Jazeera?

The Washington Post published a story on Friday that mostly supports the view that the Al Jazeera TV network is largely ignoring the crackdown in Bahrain. After their extensive coverage of uprisings in Tunisia, Egypt, Libya, and Yemen, their relative silence on Bahrain has been deafening. 

Perhaps in response, Al Jazeera English ran this story on Friday's hearing in the U.S. House of Representatives Tom Lantos Commission on Human Rights (a non-legislative committee):

Three things are striking about this story. First, CNN interviewed all three of the same witnesses quite some time ago (see earlier posts on this blog). Second, the CNN stories, reported by Amber Lyon, carried some gruesome video and eyewitness accounts, but this one was confined to footage of the U.S. Capitol building: hard-hitting vs. dry, academic policy debate. Third, the CNN stories made the Bahraini government look bad, but this one makes the U.S. government look indifferent or hypocritical. Either way, Al Jazeera's approach is quite tepid and its target misplaced.

While the Post story suggests that Al Jazeera English has been tougher than the Arabic version, a quick comparison with CNN demonstrates that even the English version has avoided criticizing the Bahraini regime.

Al Jazeera's motto is "a voice for the voiceless." But that should be amended to read, "--except for the voiceless in the Arabian Gulf."

Prison Time and Liturgical Time

Review of Avi Steinberg, Running the Books: The Adventures of an Accidental Prison Librarian (New York: Nan A. Talese / Doubleday, 2010)

As our friend Shubbar sits in his sixth week of arbitrary detention, I've just finished reading Running the Books: The Adventures of an Accidental Prison Librarian, by Avi Steinberg. Steinberg's and Shubbar's stories raise two common questions: What does it mean to be deprived of one's freedom? And how does one experience time in captivity?

Steinberg grew up in an Orthodox Jewish family in Cleveland and Boston. After graduating from Harvard a few years back, he was adrift from the community of his youth and adrift in his career ambitions (like so many young college graduates these days). But when he applied, and got hired, for a job as a prison librarian in a Boston jail, he found his voice and his story. He tells that story with self-deprecating humor, bittersweet pathos, street smarts, and quiet literary elegance. This is a coming-of-age story with unusual depth and richness.

As a blogger and author concerned with how liturgical time can transform our engagement with the world, I found the most eloquent passage in the book in a meditation on the experience of holiday times in jail.

Time has its own peculiar meaning in prison . . . . Although a person in prison always has countless hours, he has no access to time's attendant meanings. When it comes to time, most inmates are like the tragic mariner: water, water everywhere, nor any drop to drink. There's endless time but not the nourishing kind, no seasons, no holiday cycles. At least, nothing that can be shared with others.

When snow collects in the yard--it is winter. When your cellmate smells particularly rank--it is summer. But these things don't imply anything beyond themselves. Snow doesn't mean sledding with your children, or skiing, or playing football or going to concerts for Christmas. It means snow.

The closest approximations of seasons in prison are the gambling seasons. When the Super Bowl gambling crunch hits, it is winter; when the NCAA basketball tourney happens, it is spring. These are the Christmas and Easter of prison. Aside from these sad interludes, prison time is neither marked nor shared by a community. It is personal and moves toward one holiday: the end of one's sentence. Each individual follows his own private eschatological calendar, which has only one holiday, the Last Day, the End of Days.

This is a very practical matter for those who work in prison. When you leave before a holiday, a well-meaning caseworker instructed me, you don't say "Merry Christmas" to the inmates. It doesn't make sense and, as she added, "It's kind of a slap in the face." In prison, seasons are best left unmarked and unremarked upon (pp. 375-76).

Imprisonment, then, expresses both literally and figuratively what it means to live flat, secular time. There are no seasons and only one holiday: escape. One lives in a private, solitary world, sharing no common times. It's truly hell.

In the meantime, living out of liturgical time, I am praying for an end to Shubbar's current ordeal: for his return to the many festivals and celebrations of the Shiite calendar among the bosom of his family. In this Easter season, surely we can hope in the One who broke down the gates of hell and liberated the first prisoners.

Bin Laden and the Word of the Day: Simulacrum

It struck me today that part of what troubles me about the proliferation of multiple social media (see my previous post) is what the French postmodern theorist Jean Baudrillard described as the free play of simulacra (the plural of simulacrum, which can be defined as "something that replaces reality with its representation").

In other words, as Baudrillard feared, we are so busy looking at representations of reality--representations that are separated by several degrees from reality--that we lose sight of reality itself. In other words, we are trapped in Plato's cave, watching images dance on a wall.

Case in point: you can watch on your computer screen a video of Osama bin Laden watching himself on television--a video snatched by the Navy SEAL teams last week but now being broadcast all over the world. So what's real here?