CEOs Have a Job, Not a Vocation


In an October 2, 2015 column for The New York Times, on The Hypocrisy of ‘Helping’ the Poor, Mr. Paul Theroux reveals his bias in the first sentence.

“Every so often, you hear grotesquely wealthy American chief executives announce in sanctimonious tones the intention to use their accumulated hundreds of millions or billions, “to lift people out of poverty.” (Emphasis mine.)

One would assume that a writer that has achieved the privilege of being published in The New York Times would have moved beyond the need to use various versions of -ly words to persuade a reader. One would also think that that writer’s research would provide enough substantive material for the reader that the writer wouldn’t have to characterize the subject of their scorn, as Mr. Theroux’s does with his use of the words “grotesquely” and “sanctimonious tones”.  Some writers, however, don’t want to leave anything to chance.

Mr. Theroux doesn’t deny that these grotesquely wealthy Chief Executive Officers (CEOs) may do some good with their money, but he believes they are hypocritical when they do so.

“Here’s the funny thing,” he writes.  “In most cases, they (the CEOs) have made their fortunes by impoverishing whole American communities, having outsourced their manufacturing to China or India, Vietnam or Mexico.”      

1Mr. Theroux spends the rest of the article detailing the areas of America hardest hit by outsourcing manufacturing jobs and globalization.  He states that the Deep South has been devastated by these actions, but he writes that some “work has trickled in”.

“Most of (these) workers are nonunion, and, owing to robotics, the workforce is relatively small.”

Theroux laments that while some of the efforts automakers have made at keeping manufacturing jobs in America, have re-energized parts of the Deep South, BUT he writes:

“None of these automakers have said it is their intention to life people out of poverty, or taken the Bill Gates, Warren Buffet “giving pledge.””

“The strategy of getting rich on cheap labor in foreign countries while offering a sop to America’s poor with charity seems a wicked form of indirection.  If these wealthy chief executives are such visionaries, why don’t they understand the simple fact that what people want is not a handout along with the uplift ditty but a decent job?”

After spending a majority of his article bashing the heartlessness of these American corporations, and their chief executives’ “wicked form of indirection”, he arrives at his point that if the “CEOs of these American corporations were to invest in the Deep South, by paying their workers “fairly”, they may not end up as multibillionaires, but they wouldn’t have to provide charity to lift Americans out of poverty.”

The gist of Theroux’s complaint is this, if these CEOs would give citizens jobs, they wouldn’t have to be charitable with their own money on the backend.  He states that most American citizens don’t want charity.  They want jobs, and they want a livable wage.

It is not the job of any Chief Executive Officer (CEO) to get anyone out of poverty, or to sign a pledge to do so.  If they do make such a pledge, on their own time, and on their own dime, that is up to them, but their job, as the CEO of a company, is to maximize their corporation’s profit margin by any means possible.

If that CEO does not perform this fundamental task in his job requirements, the corporate board will replace them with someone that is not afraid to explore every possibility at their disposal to appease shareholders and attract future shareholders.  One measure Mr. Theroux may want to consider is to have shareholder satisfaction government mandated.  This would allow CEOs much more latitude in their decision making.

As opposed to what Mr. Theroux’s emotional appeal would lead you to believe, a CEO does not act in an autonomous manner, and they are not playing around with their money when they make corporate decisions to “impoverish American communities”.  It may appear to those that have no experience in the private sector that the face of a corporation, its CEO, is equivalent to a king in that corporation, but they are not.  They are answerable to their bosses: the corporate board, the shareholders, and the analysts that will help that corporation attract new shareholders.  They are accountable to bottom line, profit margins, and when they appease their bosses, they are awarded with a bonus.

If they then make the “hypocritical” pledge to help the poor with that bonus, or salary, they do so with their own money.  It may appear hypocritical to one that doesn’t try to understand how business works, but when one attempts to view this dilemma in an objective manner, a renewed appreciation for what these individuals –that happen to be CEOs– are attempting to do, can be gained.

A CEO is also not given the latitude to hire new people, at a livable wage, “just cuz’”.  We can be sure that the human beings, that are CEOs, feel for the plight of the average worker in the Deep South, and it may cause them sleepless nights to know the devastation that their decisions will wreak on their community, and the schools of their children, when they are forced to lay employees off, relocate, and outsource jobs.

My contention, as a person that has never owned a business, never been in a management position, much less a CEO position, and may be less informed than Mr. Paul Theroux, is that I don’t believe that any CEO would want to move their manufacturing operations offshore, so much as it’s a necessary evil they are forced to explore to escape the burdensome government regulation, taxation, and the union demands some corporations experience.

“Either you move operations off shore,” is the ultimatum some of these CEOs face, “or we will find someone that will.”

In another part of the article, Theroux writes that citizens state that “they’d be happy to make Nike shoes, if they were paid a livable wage.”  The reader reads this and thinks it’s great that they say that, but the obvious rub in that statement is that the citizens cannot dictate to their bosses how much their work is worth.  At this point in America, no one can force a corporation to pay an employee a specific amount, save for the government’s mandated minimum wage, and a union that may attempt to force a specific wage based upon an agreement that is reached with the employer.  Most employees deem the minimum wage unlivable, and most corporations deem the union’s demands unfeasible.  Thus, all parties involves are forced to abide by what Mr. Theroux may consider a grotesque system that allows a corporation to determine what each employee’s contribution is worth.  And if that work is determined to be worth less than the minimum wage, those employees are replaced by robotics, or computers, or their jobs are moved offshore where there is no mandated minimum.

This system that Mr. Theroux implies is grotesque, is called capitalism, and every corporation in this system has been created, and continues to prosper, based on its desire to attain profit.  A CEO is required by his corporation, the corporate board, the shareholders, and the analysts that write reports on the corporate profit sheets to attract new investors to do whatever he, or she, can to maximize the profit that corporation will incur.

This article is not intended to garner sympathy for multimillionaire, or billionaire, CEOs, but to suggest that there is another side to the argument about how the system works that Mr. Theroux either hasn’t considered, or chooses not to represent in his article.  This system may end up squashing the little guy, and that is an awful thing.  It is incumbent upon the little guy to figure out how the system works when he, or she, is the little guy. They can complain about the system, and if they have some sort of outstanding talent, such as those that are recognized by the New York Times, this talent could lead to them being paid to complain about the system.  For the hundreds of millions of us that don’t have such talent however, there is a need to figure out how the system works, and how we can succeed in it.

We all know the the types of CEOs that Mr. Theroux would prefer to run these companies … and they are in the movies.  In the movies, a Bruce Wayne-type CEO runs a company for the benefit of mankind, and he eschews the grotesque need for corporate profits.  It’s a wonderful sentiment, and I’m sure most CEOs would love to be more like Bruce Wayne, but I’m quite sure if a real life CEO were faced with the question: “Why can’t you be more like Bruce Wayne,” they would inform the questioner that what works well in comic book plot lines, and Paul Theroux columns, doesn’t work as well in corporate boardrooms.  “We have a name for CEOs that are permitted to do such things … We call them actors.”

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8 thoughts on “CEOs Have a Job, Not a Vocation

  1. No…. what’s grotesque is that’s it’s not Capitalism at all. Capitalism was destroyed 50 years ago in favor of Crony Capitalism.

    There’s a difference between venture and vulture investments. Making a profit in the name of Capitalism regardless of ethics is not Capitalism. Sending lobbyists to Washington and corrupting both business and government with the back door deal isn’t free enterprise. These things and others like them distinguish the difference between the two business models… they help define the line between a free competitive marketplace and a corrupted system that replaces honest individual gain earned through talent and effort with unimaginable contrasts in wealth created through non-market advantages. It’s in these details where we have failed ourselves and it’s what all these guys like Theroux are trying to say – they just get lost in all the BS.

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    • I agree that capitalism has changed. I agree that the current incarnation of capitalism can be called crony capitalism. I don’t agree that this occurred 50 years ago. I would say that its embryonic period began with the “big stick” of Theodore Roosevelt. I would say that his attempts to progressively grow the government created the unintended consequence of lobbyists hoping that their efforts to swoon the lordships in Congress, the Senate, and in the office of the President will land them favorable legislation. I agree that Mom and Pop stores have been squashed by the crony capitalism legislation that only big dawgs can afford to comply with. I agree that this relationship between big business and big government has created contrasts in wealth and non-market advantages. I am confused, however, about what this has to do with an individual human being’s (a CEO) responsibility to do anything for the poor. As I said in this piece, if he refuses to ship his workforce overseas, because he feels some burden in his soul for being a part of this ‘crony capitalism’ system we have in America now, they’ll just vote him out of office and bring in someone that will.

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  2. I just look at it differently…. whether it’s the CEO or board members that abandon the American work force… the effect is the same to the rank and file. It’s making profit or making greater profit without ethics. It’s turning your back on the people that helped you get where you are. Further, many companies that pack up and leave don’t do it just for cheap labor. Our own government gives companies tax incentives to put plants in other parts of the world.

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  3. I’m going to guess that our definition of ethical violations “for greater profit” is something that you and I would never agree on, but is it ethical to have the highest corporate tax in the world? Is it ethical to strangle American corporations with government regulation? Yes, in the truest sense of the word, it is “ethical” on both counts, but is it wise? Is it wise to place an ever expansive burden of paying for social programs on American corporations? It’s politically feasible, because a majority of American voters despise Big Corporations, but does that create a climate for corporations to stay on our shores? There are unintended consequences for our actions.

    The solution that leading Democrats have come up with is more taxation (on profits attained offshore, when the corporations try to bring them home) and more regulation (declaring it illegal to offshore). How about this? How about we flip this whole dynamic around and stop demonizing corporations and CEOs? How about we lower the tax burden (highest in the world), and lay off the burdensome regulation (doing more harm than good, it could be argued), and follow the time-honored tradition of mayors and governors by trying to make America attractive to domestic and foreign businesses? Isn’t it one of the jobs of most politicians to create jobs in their locale, be it local, state, or federal?

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  4. I’m not demonizing anything or anyone. Sorry….. you’re climbing the wrong tree. Never gonna shed a tear for the guys that get multi million dollar bonuses while the average man struggles to meet his electric bill.

    No-one today is naive enough to believe that playing by the same rules people can accumulate such fantastic wealth by simply out-working or out-thinking the rest of us. Something has gone very wrong for so few people to have tipped the financial scales so drastically in their direction and it doesn’t have anything to do with which political party controls Washington.

    Corporate taxes, labor rates, burdensome government, etc etc aren’t absorbed, they’re passed on just like any other cost of doing business… it’s in the price. He who stands atop the hill doesn’t suffer any of it. Give me a break!

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  5. You are correct in saying that “It’s in the price” in the incidence tax that gets passed onto the consumer, but there is a point at which the donkey’s back is broken, and the corporation can no longer compete in their industry. When that happens, it only makes good sense to move to a location that is less burdensome on business. As I said in a previous reply, most of those affected are the little guys, and the second-tier guys trying to compete with “He who stands atop the hill”.

    Personal experience has shown me the burdensome effects of the federal government with the second-tier guys trying to comply with EPA standards that the “Hilltoppers” have less of a problem incorporating into their business costs, and if these second-tier guys could have moved their operations offshore to escape those onerous regulations this un-elected body imposed on them, they would have.

    And I didn’t bring a political party into the situation, until it came time to speak about a solution, and the Democrat solution to this particular dilemma is infantile in its populist stance, in that it wouldn’t move beyond the politician’s podium. It seems indigenous to the Democrat Party that when they cause a problem with taxation and regulation that they speak of more taxation and regulation to fix the problem. Republicans, by and large, attempt to remove regulation and taxation to rectify the problems, and unintended consequences, of their actions. Having said that, the Republicans passed TARP, and the Democrats poured fuel on the fire with the regulations found in the Dodd-Frank, so both parties are to blame for the crony capitalism state of America today.

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  6. I agree, corruption has no party affiliation …. politics at best just sometimes differentiates between brands/styles of it. The shame of it, is that people still can’t see the partisan political chest pounding as the theater it is. Blinded by the nonsense, the country polarizes and paralyzes itself so as not to see the truth of the actions right in front of our faces.

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  7. I would say the exact opposite. I would say that when a politician running for office declares that they are nonpartisan, they are, in essence pounding their chest in a theatrical sense. Once they get in office, how many politicians vote and conduct themselves in a nonpartisan manner? In this sense, I would say that a measure of a politician’s partisanship equates to their honesty and boldness. I would also say that our founders designed our system of government to be a partisan, polarized machine. The more partisan the Congress, when juxtaposed with the party in the office of the president, the less they get done, and how many legislative bills end up helping the people? Even those that do end up fraught with unintended consequences, such as TARP and Dodd-Frank.

    On point: I used to be a proponent of giving the president line-item veto power. It seemed to me that that simple action would clear up a lot of the confusion of our government, and end a lot of the partisan bickering and polarization. The partisan, strict constitutionalist Ron Paul informed us that he was against such a provision, because it would give the president more power than he should be endowed with in the checks and balances system of government we have. Thus, while earmarks have been condemned for adding to the partisanship and polarization in the legislative process, they tend to fashion a bill in a way that makes it more representative of the people. And when they do all get together to “get something done” it’s often as a result of so much pressure from their constituents that they are willing to cross party lines and compromise. Thus, conservatives are declared to be anti-government, when if someone was interested to find out the particulars of what a conservative thinks, they’ll find that conservatives are more for making government service as difficult as possible, as outlined in The Constitution.

    To paraphrase Winston Churchill: “Our (American) government, may be the worst form of government there is, but it’s better than all the others that have been tried.”

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