Independent Rant

Friday's Wall Street Journal reported that average CEO compensation at 100 large U.S. companies was up 46.4% in 2004. It must be nice to be able to vote yourself a raise. I checked my investment portfolio and it certainly wasn't up 46.4% last year. Cost of living? According to the Mercer worldwide survey of cost of living, NY was the roughly the same as the previous year. Why, oh why, do CEOs deserve big raises every year?

As Rakesh Khurana of Harvard Business School has documented, company performance is tied more tightly to general economic conditions and industry trends than the brilliance of an individual CEO. Still, CEO comp continues to skyrocket -- now 160 times the pay of the average worker.

Excessive CEO pay is a disservice to shareholders, employees, and customers. The question is what to do. Writing to the heads of the mutual funds and companies in which you are invested is one step. Also write to your legislators to push for laws that create more transparency and rights for shareholders.

Then, if you are an average Jane or Joe, sit back and wait for your riches to arrive: Salary.com predicts that you can expect a 3.7% rise in 2005. That's way up from the 3.6% average in 2004.

I'm not the only one who sees the looming battle on Social Security as a potential sink hole for the Republicans. Noam Scheiber has an excellent piece in today's TNR Online. Here's a sample:

"If I were a congressional Republican, the thing I'd worry about most is ... well, the thing I'd worry about most is the unwritten rule requiring me to get a really bad haircut. But the second thing I'd worry about is why my party's leadership keeps lying to me about the politics of Social Security"

And he concludes, "A 2001 study by the National Committee for an Effective Congress found that, of the 88 congressional districts that Republicans won from Democrats between 1994 and 2000, 59 had incomes below the national average. Among the 46 seats that Democrats won from Republicans, 29 had incomes above the national average. If Republicans move ahead with privatization, we're likely to see Democrats win back a big chunk of the voters who abandoned them in the '90s..."

How do you spell "third rail."

All of you fans of privatization should take a look at the story in yesterday's London Times that reports that trains in the UK have been a collective 11,000 years late since the system was privatized in 1997. That's right -- 11,000 years according to the Strategic Railway Authority. Oh, in case you haven't guessed, profits for the private operators have been up while service levels have gone down.

It is time to acknowledge that private enterprises aren't always paragons of efficiency and public operations are not always wasteful and slow. Without proper incentives and oversight, privatized public services aren't likely to perform better than predecessors. Instead you get a monopoly (or duopoly) with powerful motives to boost profits and little recourse for market forces to drive service improvements. Think of your local cable company.

In this country the Bushies are pushing hard to privatize government services. There are plenty of improvements that can be made in these agencies and programs, but let's make sure we actually make improvements and don't just give private companies a license to enrich themselves.

I'm glad that I'm in Europe to help provide a counterweight to Bush and his entourage. I realized that I am outnumbered but I am confident that I can score a point or two. I don't think that I'm alone in hoping that Bush doesn't make a mess of Iran the way that he did with Iraq. It would also be nice if he could acknowledge the massive progress of the Kyoto accord. One can dream, can't one?

Of course the whole thing is mostly a kiss-and-make-up session without a lot of real substance. The EU has designated each of nine countries to speak about a single issue in presentations and the other two have been told to piss off and shut up. It's hilarious to watch the unwieldy EU try to get its ducks in a row.

Bush will meet with Tony Blair tomorrow. I wonder if they'll discuss social security privatization. It was a complete disaster in the UK but I doubt that W wants to hear that.

But what most people will see are a series of silly photo ops. Couldn't we just PhotoShop world leaders together and save ourselves the cost of jet fuel?

When I arrived in Europe the night before last the implementation of the Kyoto Protocol was all the buzz on the telly. The effective date had arrived so there were lengthy discussions about what it all means now (and what it means that U.S. opted out). I'm curious -- what was the play like in the U.S. media? Did anyone notice or care?

On a separate note, I'm sure there is great consternation about Russia's decision to sell nuclear fuel to Iran. Might I suggest that it is in the long-term strategic interests of the U.S. to develop scaleable, cost-effective alternative energy technology that we can export? Providing an "alernative" alternative would be the best way to expose any deception about nuclear programs being for energy production while also helping to clean up the planet. After all, 131 nations did sign the Kyoto Protocol and now have to reduce their toxic output.

We tend to think of the much ballyhooed culture wars as a fairly recent phenomenon fueled by the resurgence of conservatives over the past dozen or so years. That myopia is the result of overestimating the success of the sexual revolution, the women’s movement, and the gay rights movement. One needn’t look far for a history lesson.

Two current films, Kinsey and Vera Drake, show how repressive societies have been for the past 50 years and how readily the establishment will rush to the ramparts when its values are threatened. Kinsey’s research into sexual behavior brought forth accusations of Communist leanings and other implications of disloyalty to the country. Ignorance, said the powers to be, is far preferable to uncomfortable facts. In Vera Drake, those with money can buy access to safe abortions while the title character winds up in prison for “helping young girls in trouble” for no money at all.

It was all brought home in Nicholas Kristof's column in today’s NYT. The federal government is requiring that sexual “education” programs promote abstinence and not present information on birth control in order to receive funding. This despite findings that show that promoting abstinence along with birth control education results in lower rates of sexual activity, fewer unwanted pregnancies, and few abortions than promoting abstinence alone.

Despite progress in many areas, there are still significant forces who believe the “ostrich” approach is the best way to dissuade teens from giving in to their raging hormones and evidence to the contrary be damned. Unfortunately, those forces control both Congress and the White House. Those who are concerned about teen sexual activity, pregnancy, and abortion should take a moment to consider results over ideological purity.

On a related note, I saw Brian Dennehy in Trumbo, the play about the life of blacklisted screenwriter Dalton Trumbo, last night. The production gets a B but it is illuminating. Blacklisting those who stonewalled the House UnAmerican Activities Committee started in 1947 and didn’t begin to end until 1960. Some people’s reputations weren’t “rehabilitated” – sounds so Maoist, doesn’t it – until 1970. Making people unemployable because of their political views was a dark stain on our history. Isn’t freedom of expression one of our key rights?

As we look at the people who are calling opponents of the Iraq war and others who disagree with the policies of the current administration unpatriotic we should remember that our government and our citizens are capable of being brutally repressive. The thought police are always among us and ready to rise up when the public mood allows. This, above all, should be resisted. Robust discourse, messy as it may be at times, is an essential component of a healthy democracy.

Interesting to read yesterday that it looks like the new prescription drug plan is going to be some $200 billion or so over budget. That's $200 billion over the $524 billion that was upped from $400 billion shortly after the bill was passed. The "don't tax but spend" Republicans are once again displaying an alarming loose grasp on fiscal reality.

Let's make one thing clear -- the drug benefit isn't Bush's gift to the elderly or the Republicans beneficience to our seniors. It is the generosity of the American taxpayers to each other. I have nothing against a drug benefit plan. We must get medical costs for all Americans under control. But it must be done in a fiscally responsible way. Make the government negotiate with the drug companies, don't prohibit it. Open competition to allow foreign drug makers to legally (and safely) import their products into the U.S. Both of these things would help drive down costs.

But Bush is instead casting himself as the defender of the benefits to the elderly saying that the law should not be revisited. Horseshit, George. Get your lips off the fat ass of the pharmaceutical industry for a minute and own up to having hoodwinked the Congress when this thing was first passed.

Readers may remember that a senior Medicare analyst was booted for leaking cost estimates that were higher than what the Administration wanted to see. Now we can all see how blatant the deception was. And people wonder why I question Administration claims about Social Security reform.

It is refreshing to see Trent Lott and other Republicans joining Democrats in outrage over the growth of this program before it has even begun. It is time to reopen the Medicare drug benefit to make sure that it delivers a fair benefit to people truly in need at a price that we can afford.

Tomorrow's Valentine's Day. I think I'll send W a big red caluclator SWAK.

Boy, it has been an interesting week. Carly Fiorina will be standing in the unemployment line in Palo Alto next week. Or perhaps her massive severance package ($21.1 million) will keep the wolf from the door. Rumors have been circulating for some time that she was being considered for a job in the Bush administration and now her dance card is free...

Once again I must ask -- if the CEO is being let go (fired, shown the door, booted -- you choose), why are shareholders forced to pay her huge amounts of money? The board that approved the deal should be shown the door at the next shareholders' meeting.

Meanwhile across the pond personality-free Prince Charles is set to web aging consort Camilla Bowles in April. Must get the white-tie to the cleaners. Most Britons want the crown to bypass Charles and go to his son, Prince William, so this may be the closest thing he gets to a coronation. Oh, wait, the people get no voice in the monarchy do they?

Of course the U.S. msm are slobbering all over themselves in anticipation of a royal wedding. Who cares that North Korea has declared itself a nuclear power? There are flower arrangements to be ordered. The 9/11 Commission says that the FAA ignored 52 warnings about Al Queda before the WTC tragedy, but that's old news. What's Camilla going to wear?

But for good news, Howard Dean should become head of the DNC tomorrow. Thank God for small favors. He will get the grassroots energized in time for 2006. Let's go get 'em!

You have to give the Bushies credit for taking on farm subsidies in the new budget. This federal program has become the biggest corporate welfare boondoggle of all time and most payments to large corporate farms. It also provides an incentive to overproduce -- thus depressing the market price for the crops -- because it pays for every acre planted.

The effort to curtail the waste will meet stiff resistance from midwestern lawmakers and chances are that no changes will be made. But you have to give them credit for trying.

However, the notion that the budget can be significantly trimmed through cuts in discretionary spending is pure fantasy. Approximately half of the current deficit can be linked to W's tax cuts. They should be repealed at least until the war is paid for and the deficit is back under control. We'll have to wait for a Dem administration to get that to happen.

While he's monkeying around with our Social Security payouts the President can count on what the government will be giving him:

The presidential pension is equal to the salary of a cabinet secretary, currently $148,400 a year. Former presidents also receive free mailing privileges for nonpolitical correspondence, free office space, $96,000 a year for office help, and, during the first thirty months after their term of office has ended, up to $150,000 for staff assistance. The pension was created by the Former Presidents Act passed in 1958. It provided a pension to all presidents who left office, unless by impeachment and conviction. As of 1965, former presidents and their spouses also receive lifetime Secret Service protection, as do widows of former presidents until they remarry and their children until they reach the age of sixteen.

SOURCE:
Kane, Joseph Nathan. Facts About the Presidents. New York: The H.W.
Wilson Co., 1993.
Nelson, Michael. Congressional Quarterly's Guide to the Presidency.
Washington, D.C.: Congressional Quarterly Inc., 1996.

I had to wait a couple of days after the State of the Union address before posting as I didn't want to burn the keyboard in rage. It was such a self-satisfied performance. But it may also have been W's high-watermark. His determination to take on Social Security head-on could be his Waterloo.

When W wanted war in Iraq, cost was no object. When he looks at the retirement income of average Americans, he wants to squeeze the nickely until the buffalo screams. The Reps continue to pour billions into a missle defense system that has yet to function properly, but blanch at that thought using that money to help elderly Americans eating tuna fish in stead of cat food. He made sure to mention his support of ethanol so the good folks running major corporate farms would know that their corn subsidies would remain intact. How, dear God, how did we elect these people?

I have written here many times about the idiocy of private retirement accounts as a way to"save" Social Security and the more I hear of W's plan, the smarter I feel. His current "idear" isn't actually a fix for the system but rather a revenue-neutral way to start to move the government out of the guaranteed benefits business -- a long-standing conservative dream.

In a rare moment of intellectual honesty, Bush has admitted that benefit cuts are ahead either through changes to how increases are indexed, an increase in the retirement age, or some other mechanism. The savior? Annuities. That's right. It seems that you would be required to take most or all of your "personal" account and purchase a federally-approved annuity that would provide an income stream for like (and reducing your SS benefit by an equal amount). So we tear down one system and put in place a more complicated one that, at best, achieves the same results as the original one.

On MSNBC, John Rother, director of policy and strategy for AARP, says if personal accounts are approved by Congress they probably would require even more annuitization than described by the White House because Social Security benefits likely would be cut to achieve long-term solvency.

“Almost all the money for most people is going to be required to be annuitized, and it will look a lot more like Social Security,” he said. “If you have to annuitize it anyway, why are you going through the higher expense and higher risk than you would if you just fixed Social Security in a straightforward manner?”

Like I said months ago, it would be hard to think of a less efficient approach to fixing SS than to break it into 200 million individual accounts.

What few mention is that one of the reasons that the SS trust fund gets such low returns is that the money is borrowed by the government each year to fund on-going operations and the gov't borrows money at about 3%. Two questions pop up: why not manage at least a portion of the trust fund like an endowment and invest it outside of government bonds to increase returns? And what will the effects be on the market when the government has to go outside the trust fund to borrow to keep things running?

My fervent hope is that opposition to this plan will grow, unite the generations, and lead to Rep losses in the House and Senate in 2006. That will require intelligent management of the issue by the Dems and that may be beyond their grasp. It will be Howard Dean's first challenge should he rise to head of the DNC next week.

In the meantime, write to your senators and representatives to head this lunacy off at the pass.

The Iraqis have held a successful election (we hope). The Pope is in the hospital. W is about to unravel the retirement hopes of millions of Americans. But wait -- there's really big news: the Delta Shuttle has stopped guaranteeing seats to flyers in the the NY-Boston-Washington triangle.

Once there was a time when you could walk up to the counter and if the plane was full, they'd roll out another one. That, along with free booze, was justification for paying $400+ for a 35- mintue flight. Now that time has passed. If the plane you want is full, you have to wait a full 60 minutes for the next one. Don't they realize how much I bill for an hour of my time?

I've been hostage to the USAir Shuttle for several years now courtesy of a contract with my employer that keeps the cost per flight under $200. US Air ended the seat guarantee a few years ago. I was told by an almost helpful gate agent that the cut back was because of the cost of keeping crews on standby. Whatever the excuse, it certainly makes Amtrak look better for my Boston to New York jaunts (free booze not withstanding). If the reelection wasn't evidence enough, we now know for sure that civilization is crumbling before our eyes.