That might be a good title for a B-movie…but it’s actually the title of a column today by Ben Stein in The New York Times Sunday Business section. For my tastes, Stein is often a bit too much of a cheerleader for the free market. But, in this column, he joins in the chorus we have sung here for some time: the obscene spectacle of corporate executives enriching themselves beyond the realm of rationality.
Example number one is Robert Miller at Delphi. You may remember that Delphi has filed for bankruptcy. Clever Bob has engineered a plan which would make him and a few Delphi executives quite rich as part of the plan to reorganize under the bankrupcty code. Stein’s view of this is quite dim: “What? A bankrupt company enriching its executives even as it destroys its stockholders’ equity and demands that its workers revert to spartan living standards?…Now, I am a lawyer by training, and it seems to me, dope that I am, that this money belongs to us stockholders, the owners of Delphi, and not to the managers and executives. Mr. Miller’s fiduciary duty runs to us exclusively, not to his colleagues. If he has a nine-figure sum lying around, it belongs to us stockholders first and foremost.”
Stein also looks at Edward Lampert, who bought K-Mart. As part of a real estate deal to enrich the company and himself, he decided to close stores to deliver piles of cash–a strategy he will probably repeat now that he has bought Sears. Stein’s view: “What about the severe cuts in retirees’ medical benefits that Mr. Lampert has announced? How can he square these with decency to the employees? They are hard-working, modestly paid men and women who probably expected to be with Sears for a lifetime. Mr. Lampert is already fantastically rich. Does he really have to fire people in small-town America or cut their health care to become even richer? How many yachts can he sail on? How many meals can he eat a day? How many homes does he need to own?”
And his final paragraph wraps it up: “Alas, there are other examples, but I’ll say it again: This is a country at war. For men who are already billionaires to look for more billions by firing hard-working middle-class employees or demanding they take a pay cut is not the kind of thing that unites a nation. I’m a devout capitalist, but this is just plain ugly.”
You know the level of the greed of executives has reached obscene heights when even a guy like Stein wants to puke. You can read the rest of his column for the sad details.
