McCaskill May Be On To Something Big
When Sen. Claire McCaskill (D-Mo.) Friday called Wall Street executives “idiots” for using taxpayer money to pay out $18 billion in bonuses, then proposed that compensation for the employees of all bailout recipients be capped at $400,000 per year, it surely seemed to many Americans like an obvious limit to place on the Wall Street banks and executives now looking for handouts from the federal government. After all, how much hardship can it be to limit your senior executives to earning no more than the president of the United States, who’s now burdened with trying to get us all out of this dire economic situation that those reckless, voracious bankers got us into?
But why stop there? The shrinking economy has led to mass layoffs across the country in virtually all sectors, at such venerable companies as Caterpillar, Home Depot, Sprint, Microsoft, Nextel, Texas Instruments and Starbucks. There’s hardly a company or industry that isn’t embarking on large-scale layoffs these days.
So what about looking at what the executives in those companies make? How many of them are earning more than $400,000?
Well, the departing CEO of Sprint, for example, reportedly made more than $21 million in 2007, and that doesn’t count his severance package, which was apparently worth more than twice that much. And according to the Wall Street Journal this weekend, Goldman Sachs CEO Lloyd Blankfein earned $69 million in 2007 — or $400,000 in just two days. The AFL-CIO has put together a terrific database on executive compensation that allows you to check the top 1500 companies in the United States, and compare your own salary to the chief executive’s.
All this makes me wonder, what if, in the interests of the American people and some renewed sense of patriotism stimulated by our snowballing national crisis, major corporations that claim they’re now “forced” to lay off wides swaths of their workforces were to pick up on Claire McCaskill’s idea and (temporarily) limit compensation of their senior executives to no more than the salary of the president of the United States? $400,000 s year isn’t exactly taking a vow of poverty; and it would surely allow those companies to save at least some portion of the jobs they’re now axing. Plus, imagine what it would do for employee morale and, consequently, for productivity? Shareholders would probably welcome the news, too.
The Wall Street Journal, no doubt, would call the idea idiotic, as it calls McCaskill’s proposal and Obama’s complaints about Wall Street bonuses on its editorial page.
But I’d love to see someone pick up on it. At the very least, it would be a brilliant PR move. The vast majority of Americans would embrace the corporations that had the guts to stand up to the challenge. And ultimately, it would be in their own self-interest: after all, when consumers are feeling stingy, a little goodwill can go a long way towards help them to decide where to ultimately open their wallets.