The Only Game...

by Phineas Dash

Something has fundamentally changed in American business, and therefore in American life. And until we come to grips with this change, a lot that is currently going wrong is going to keep edging and falling towards disaster.

The big fundamental change is the result of many other changes, some large and some small, some obviously related and some apparently unrelated, that have been going on in full view while nobody was looking, since the 1980s.

Despite the trumpeted reliance of the new American economy on small business and entrepreneurs, the corporation has gotten larger and larger, and more and more dominant. They moved aggressively into services, and combined product and services and distribution. Mergers and buyouts, consolidations, global expansion, have all met with friendly de-regulation and privatization. Then computerization, the electronic information revolution.

All those "ions" are now the air we breathe, in more ways than one.
There are other factors, too, involving the stock market and the dividing of the middle class, but let's stop there. The resulting basic change is a new relationship between the stock market and the corporation. But that apparently simple shift has changed everything.

The resulting change is this: corporation CEOs now have no other real responsibility but to increase the value of the company's stock.
Sounds innocent enough perhaps. But think about those fatal, fateful words: no other real responsibility.

So when your average $20 million a year corporate CEOs go to work, what---and who---do they have to worry about?

CEOs don't have to worry about employees---they are dispensable, everyone apparently accepts that. The old bargain that the company looks out for the welfare of its people, and its people are loyal to the company, is no longer even an often-violated standard.

In fact, CEOS can more easily increase stock value by axing employees than by motivating them. It turns out that all the consultants and retreats, all the nomenclature changes naming employees "associates" and "stakeholders" is just so much tap-dancing on their graves.

CEOs don't have to worry about the public. Here in California, Enron essentially controlled our electricity, which means they controlled just about everything. Electricity used to be a public utility, because it was something that this functioning society and the individuals within it needed to have. It's just about as important as blood. Not only did de-regulation and privatization weaken public control over functions necessary to the public good, but the reigning philosophy absolved powerful corporations from worrying about the public good they'd assumed responsibility for.

The public interest includes all private interests, but since the 1980s our culture has been persuaded of the opposite, that serving a lot of private interests adds up to serving the public interest. As it turns out, it actually serves a very small number of private interests. Namely, the CEOs and possibly their kiss-kiss boards of directors.

CEOs don't generally have to worry about getting caught cheating, because corporations and the rich people they produce have had the government in their pockets for long enough to render powerless what regulatory agencies still exist. Government has been friendly to corporations because corporations put their friends in the government. In the latest national "election", they managed to put themselves atop the federal government.

CEOs don't even have to worry about what used to be the most basic, most Republican of all business concerns: profits. Costs, product and profits are all secondary. In the short term---the only term that counts---they're all just numbers anyway, and it turns out they can be rather easily manipulated one way or another at the right moment to increase stock value.

So what's left for the CEO to worry about? For a few precious moments of a few predictably special hours on a few designated days, the value of the company's stock. And how much of it the CEOs own, and how fast they can get rid of it before the card house collapses.

The bottom line (which, by the way entered our everyday language as the default expression for "the basic conclusion" when all this started in the 1980s) is that all CEOs have to worry about is getting rich.

And that's all that quite a few of them did worry about. And they got rich, beyond all reason.

The stock market plunge and all the lost retirement funds is only one predictable result of what's been happening in the last five years or so. The cost to the society as a whole is stupendous. When a very, very few profit so greatly, it's almost inevitable that many, many will suffer tremendously.

Sending a few CEOs to jail may temporarily slake a thirst for vengeance, but it's an ultimately futile and irrelevant gesture. Most of what CEOs and their co-dependents do to shred this society is at least marginally legal.

Someone who is a lot better at math than I am has figured out that to make as much money as one CEO took home in a single year (namely the $102 million pocketed by the CEO of Green Tree Financial Corporation) it would take a minimum wage worker-say the woman who takes care of your kids when you're at work, or the guy who pushes your mother's wheelchair in her "facility"-about 7500 years. That's seven thousand and five hundred years.

That probably means that this one CEO will make more in twelve months than that person, her parents, his grandparents, and their ancestors back to the Crusades managed to earn all of their lives put together. Several times more, probably.

What the impact of knowing this in your bones might do is worth a column in itself. For the moment let's stick with these two points: First, the gap between the very rich and most people is more than a matter of numbers. It creates needless suffering and tragedies every minute of every day, for people who are working themselves to death and taking the next generation down with them, who can't get the medical care they need, who can never feel secure because corporations can destroy what little they have at any moment.

Second, this system works only in the very short term, and possibly (if you're a devoted Darwinian) over the very long term.
But our economy and our society don't work in either of those time frames. They work in patterns of years and lifetimes and generations. Social and economic institutions depend on the confidence people have in them every day, as a result of these years and lifetimes and generations.

The economy, the society, may look as automatic as a machine, but in fact they involve a lot of cooperation that must operate consistently, because when cooperation is withdrawn the system falters. In ways we aren't quite conscious of most of the time, that cooperation and consensus and confidence must be renewed every day.

Everything social depends on many small social contracts, some stated and backed by rules and laws, and others just as important that are implied, suggested by symbols and renewed by behavior.

That's why I believe the crisis of confidence we're seeing is deeper and broader than the anger and fear that resulted in recent stock market plunges.

The solution must also be deep and broad, and it will involve reestablishing some old values and establishing new interpretations of what constitutes justice and fairness.

I do have a suggestion on how to start. Instead of putting a few people in jail, take their money. Not a little. Not some of it. All of it.

Then somehow, some way, there have to be real limits on how much money anybody in the corporate hierarchy can extract from it.

For this crisis does make it possible to ask out loud a question that some of us have quietly swallowed for years: why do those people need all that money? How can this society, this economy, really afford that?

How is it possible that in a single year a few individuals can make more money than the vast majority of a company's employees could hope to make in a lifetime, collectively---plus the lifetime earnings of all their family, their parents and grandparents and several generations beyond, put together? What kind of society is possible when that's a normal state of affairs?

And do we really believe that a sound economy can be sustained with so much wealth in so few hands---and in so few apparently selfish hands? A sound economy, as we're always re-learning, depends on a sound society.

I love it when these people respond to the question of why they try to make more money when they are already incredibly rich. It's not the money, they say, it's just a way of keeping score. Well, it's time for them to find another way.

Like how many pensions your company finances without gambling your employees' retirement away on the stock market. Like how much money you put into campaigns for universal health care and to combat the climate crisis. Even go back to some old-fashioned standards, like how many hospitals and schools and libraries you build. Not how many sports arenas you get temporarily named after your company.

The idea that the genius of the day is a CEO who can make the stock price go up, regardless of any other consideration, and regardless of how many people are hurt---including how many ecosystems are destroyed, how many societies are oppressed and impoverished, and distant wars encouraged---has always has the smell of self-destructiveness about it, among other odors.

That these CEOs cart off the world's wealth while daycare workers and nurses can't make a living, and millions of hard-working people around the world are heartlessly manipulated and horrifyingly poor, has been obscene for a long time, too.

Let's not pretend this is exclusively the responsibility of those awful CEOs. At least the upper third of the middle class was perfectly willing to let it all go on as long as they got a piece of the action. The people who played the stock market game and averted their eyes from all this for their own profit bear some responsibility for this mess as well.

That their anger at being cheated is likely augmented with guilt probably contributed to the ferocity of response. Now that the implicit bargain with the CEOs they trusted to make them money turned out to be a scam, it seems that getting the stock-buying public to withhold moral judgments (not to mention common sense) was just part of the con.