The latest battle in the administration’s war against success is the shakedown on executive pay put forth by Obama’s pay czar, Kenneth Feinberg. The much anticipated move follows the bullying of the AIG producers, as well as the Chrysler and GM bondholders last spring. In the case of the upcoming pay cuts, salaries are expected to be slashed as much as 90 percent on average and total compensation will drop by about 50 percent, underscoring an enormous decrease in the amount that many executives will be receiving this year. In other words, the pay cuts will continue until performance improves.
It is certainly reasonable to argue whether or not the existing compensation packages are excessive, especially if we are picking up the tab. But, it is also reasonable to debate how these firms will keep their most talented people with the new anti-market ceiling in place. After all, isn’t it the point to make these executives successful? What is difficult to debate, however, is the administration’s Chicago-esque display of raw power in furthering its economic agenda, in breaching or renegotiating existing contracts.
For those who believe this step represents justice, ask yourself if you really want the government to become accustomed to injecting itself not just into the private sector, but into preexisting contracts? We know this is not the first time, and we can be confident it will not be the last. In a similar move, the Federal Reserve is planning to exercise veto power over pay policies at thousands of banks including many that never received a bailout.
There is a huge rift between the current administration’s concept of success and the time-honored concept of success that most Americans still embrace. From silly yet divisive rhetoric about “expensive suits, big houses and the privileged few,” the president has persistently stirred up spite toward the most productive citizens in this country. If you “happen to be successful,” then it can simply be equated to winning the “lottery” or scoring big at the “crap shoot of life.”
By presenting success as a privilege, or a byproduct of luck, it is portraying the working rich as unworthy of the very success they have earned. But why would we want to tear down those who have lived their dream? Why wouldn’t we want to interview them and study them and figure out how they reached such lofty goals? Wouldn’t it be wiser to model them than to malign and marginalize them? This denigrating of success is simply un-American.
Eighty percent of millionaires and seventy percent of billionaires in this country are first generation. This “self-made” element has long been a distinctive feature of the American experiment and one that we should all be proud of. This symbolically significant but economically irrelevant move to shrink the economic upside of these very visible executives simply adds more fuel to the fire.
Government control and individual success clash with each other. The more we have of one, the less we have of the other. While the president labels “excessive” pay as contrary to our values, he ignores the fact that excessive government conflicts with our fundamental principles. Which administration policies have expanded your personal liberties or championed your individual rights? Where was the stimulus for entrepreneurs and small business owners?
Right now, our government is running, controlling, or exerting its heavy hand on banks, mortgage lenders, automobile manufacturers, and insurance companies. It intends to spike taxes for entrepreneurs and small business owners in the next year. The administration wants to control our wallet, how much we earn, and of course, how much we must contribute to their social agenda.
They control our child’s education through politicized curriculum and the anemic standards of the teachers’ unions. They hunger to control the choice of car we drive and the carbon footprint we leave behind. They long to control the doctor we visit, the treatment we receive, and what goes in our medicine cabinet. And according to Senate bill 2099, they intend to track which citizens own handguns. They even want to control what we say, how we say it, and who gets to say what on the airwaves. Did I leave anything out?
America provides more opportunity for more people to create their dreams than any other country in history. It is the platform that allows and encourages the average to become exceptional. There is no other place on the planet that is designed to help industrious people get more of what they want in life than the United States of America. The opportunity for economic success is unmatched. But it is just that, an opportunity not an entitlement.
In a remarkable turnaround, after the announcements of the pay cuts, the president affirmed the American Dream: "This is America. We don’t disparage wealth. We don’t begrudge anybody for doing well. We believe in success," he said. We can all agree with what the president said. It’s unfortunate that his actions don’t match his words. We aren’t giving the leaders of companies who owe the American people much incentive to pay us back. The war on success continues.