Blind to Crony Socialism
Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous. The liberal press usually misrepresents this as a hypocritical ‘jobs for the boys’ program within the capitalist class. In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid. Believe me. I’ve been on both sides of this kind of dispute (except, of course, for the ‘failed’ bit).
People are usually struck by the seeming injustice of CEOs running companies into the ground and then getting paid obscene amounts in the form of ‘golden parachute’ type good-bye presents. Often there is no other way to get rid of a bad CEO though – if his or her employment contract guarantees a large termination benefit, the company may have little choice in the matter. As a rule, private shareholders are bearing the cost of such transactions, and they are in this position voluntarily (after all, they could sell their shares or vote against generous CEO payment packages at shareholder meetings). We realize of course that in the age of crony socialism, one usually has to judge such things carefully on a case by case basis. Still, it is a far cry from the misuse of taxpayer funds, which are appropriated by coercion and offer those bearing the costs no opportunity to ‘opt out’.
So where’s the liberal outrage with a story like the pension swindle in El Monte, California? This is about a dying town, with a per capita income of $10,316 and a quarter of its population below the poverty line, that is paying a pension to one of its retired (at the age of 58) city managers of more than $250,000 per year. Adjusted for inflation. With medical for him and his wife. And survivorship benefits. And to which he contributed nothing.
Or another retired city manager who collects $216,000 per year, allowing him to ‘take some things off his bucket list’ such as golfing at the Old Course at St Andrews. And it looks like the public is paying for more than just green fees. His retirement came shortly after he was swept up in an anti-prostitution sting operation.
This post was published at Acting-Man on January 12, 2017.