I picked up the LA Times business section this morning and felt like I had been transported back to the Go-Go-Go 90s. Here was a story on how the CEOs at California’s top 100 publicly held companies had earned a collective $1.1 billion in 2004 -- a 20 percent increase from the year before. Contrast that with the 2.9 percent bump for the average worker.
Back when I was writing Pigs at the Trough, documenting the worst excesses of corporate America, it seemed like the worm was about to turn. We had George Bush running from his previous incarnations as Kenny Boy Lay’s buddy and declaring a new era in corporate responsibility. We had Sarbanes-Oxley, and the perp walks of Rigas and Kozlowski and Waksal and Ebbers and Skilling and Fastow. We had the fall of Enron and WorldCom and Adelphia and Tyco and Arthur Andersen... and the rise of Eliot Spitzer and a newly muscular SEC. We watched as Harry Blodgett and Jack Grubman and Mary Meeker and Abby Joseph Cohen all wiped the egg off their faces. We had AOL splashing across its welcome page a story on "The Greedy Bunch" -- Fortune magazine’s evisceration of America’s most avaricious execs.
We had contrition and mea culpas and promises of a new beginning. But, as the Times story shows, that is clearly not the case -- particularly when it comes to the widening gap between CEO compensation and worker pay. The upstairs/downstairs divide is bigger than ever.
If the Democratic Party wants to get to the bottom of why working Americans -- as the cliché goes -- are voting against their economic interests, they may want to look at these latest numbers and own up to the fact that they are actually doing a lousy job representing those economic interests.
And as Andy Stern points out in his post today, so should the American labor movement. Work that used to be the road to the American dream is now a path fraught with insecurity, fear, mounting credit card debt, and visits to the local food bank.
The sour cherry atop this icky sundae is today’s announcement that that the U.S. Supreme Court has overturned the conviction of one-time accounting giant Arthur Andersen. Andersen, you may recall, was one of the key players in the Enron debacle, guilty of (among many other things) obstructing justice by shredding thousands of financial documents. Sure, the conviction was overturned on a technicality -- in this case, bad jury instructions -- but how come these guys always seem to skate by on technicalities?
So the divide is getting wider, average Americans are finding it harder and harder to get by... and the guilty are let off the hook on a technicality. It’s Back to the Future, Corporate American Style.