I rarely agree with Michael Moore but one observation of his was spot-on: CEOs of big corporations are on the whole much more socialistic than the average man on the street. Of course the socialism of CEOs goes only one way. Your tax dollars are socialized to subsidize their losses. The public trough is to be used to finance the risks they want to reap the rewards of but don’t want to be responsible for. Rules and regulations are used to block competitors or bludgeon them over the head. CEOs use the law not as a way of defending their rights but as a revenue enhancement tool.
I am reminded of this by the revelation that John Thain, former CEO of Merril Lynch, used an estimated $4B in taxpayer bailout money to pay bonuses to his executives. A company on taxpayer funded life support has no right to pay billions of dollars in bonuses. That didn’t matter to Thain. Apparently he didn’t want his top employees to jump ship to competitors. Thain thinks the American taxpayer has to pay for Merril Lynch to remain competitive. What planet is this man living on?
CEOs are under immense pressure to deliver returns to shareholders. How they get the returns is of little consequence to them. What they do not want is honest and fair competition. They want to cripple or strangle their competitors by any means necessary. If they can take out their competitors through legislation it doesn’t bug them in the slightest.
Anytime you hear businesses promoting some new legislation or regulations with high-minded slogans you must be cautious. There is always a profit motive with CEOs. Always. ALWAYS!!!
They will dress up their motives in fluffy rhetoric about social responsibility, being good stewards of the environment, etc. But underlying these empty words is the desire to improve the bottom line by any means necessary.
Hedge fund mannager T. Boone Pickens is a great example of the socialist CEO. He invested $2B in wind energy projects when the price of oil was well over $100/barrel. Now that fossil fuel prices have cratered he is going to lose his shirt and he wants his losses to be subsidized. He has unveiled the “Pickens Plan” which calls for us to (among other things) generate 22% of our electricity from wind energy. All he wants is $150B of taxpayer dollars to salvage his $2B in mal-investment.
T. Boone Pickens: billionaire SOCIALIST pig
GE is a big supporter of the “Pickens Plan”, as they make the wind turbines that this plan would use. GE CEO Jeff Immelt says that our federal government needs to quickly increase support for green energy. Naturally it’s all about making the world a cleaner, better place.
Jeffrey Immelt: CEO of GE and SOCIALIST pig
Of course the Detroit three CEOs spring to mind as well. Under capitalism these outfits would go bankrupt and restructure their crippling labor agreements. Instead their CEOs begged Congress for their multi-billion dollar bailouts (more to come, to be sure) so that they wouldn’t have to live with a bankruptcy on their resumes.
Everyone knows that it takes hundreds of millions of dollars, on average, to produce a pharmaceutical that meets FDA approval (these guys claim the cost is more than $800M!). You might think that drug company CEOs would be lobbying to streamline some of these regulations. But big pharmaceutical companies like the FDA approval process because it dramatically stifles competition. A promising upstart company can and often will be destroyed by one FDA approval failure. The big companies can survive the rejections. Another reason big pharmaceutical CEOs like FDA rules is because they allow legal risk to be sidestepped.
CEOs are very short sighted. All they have been looking at is the next quarter (one of the main contributing factors to this recession we are in). Fundamentally this short-sightedness stems from investors demanding high returns: if CEOs don’t produce good results early and often they are out. Hedge funds, pension funds, and other institutional investors NEED high returns on investment to stay viable. I am optimistic that this recession will change investor psychology somewhat. We shall see.
One thing for sure: if there is ever a way for large corporations to use the law to funnel cash into their pockets, they will try it!
UPDATE: As if on cue, this article appeared the day after my post. Google has donated to the Obama campaign in a big way and now they expect to bend the rules in their favor.
First, it wants to expand high-speed Internet access so people can use its Web services more often. It also is pushing for so-called network neutrality: prohibitions on telecommunications companies charging websites for faster delivery of their content.
Google wants people to have high-speed internet access to its websites… but it wants YOU to pay for this. It also wants to use a disproportionate share of bandwidth without paying a disproportionate amount of the costs. Google is particularly masterful in hiding their profit motives in terms of idealistic motives and phrases. As a result I trust them less than I trust most corporations.
