Pay equity issues start at the top

income graph

 

Stock market and share prices are near record highs. At the same time, Republicans and Democrats alike bemoan a sluggish recovery that has left too many behind. As delegates gather in Philadelphia this week, I wonder how many of the speakers will address this disconnect seriously, especially when so many there contributed to this situation. No one talked about this in Cleveland.

Pay inequity is a hot topic. It cuts across all income groups. Women fight for pay equal to that of men performing the same job. Others broaden the push for pay equity to include jobs of comparable value or requiring similar training and experience.

Some of the most shocking disparities occur in the gap between what CEO’s and the average worker make. According to Fortune Magazine, CEO’s make 300 times what the average worker earns.  For the top CEO’s, the multiple is 373 times.  What’s more to the point, however, is that from 1978 to 2014, CEO pay grew 1000 percent, while average worker income increased by just 11 percent.

Ah, but you say, aren’t those CEO’s worth every cent?  Isn’t their growth central to their company’s well-being and the health of the economy. Not so fast. Today’s Wall Street Journal reports on a study by corporate research firm MSCI that found that the best paid CEO’s run some of the worst-performing companies as measured by stock performance over a ten-year period. And the results of lower paid CEOs were best. The results held whether the researchers analyzed across all companies or on a sector-by-sector basis.

According to the Economic Policy Institute,  in 1965, CEOs earned an average of $832,000 a year while workers earned $40,200. By 2014, CEO pay had grown to $16,316,000 while workers were getting just $53,200. The study noted that this was not linked to productivity. It was just that the guys at the top were taking a bigger slice of the pie.

We’re a market-driven economy, and people should be able to get what they’re worth, or more if they can work that out. But a regulatory shift, supported by Democrats and Republicans alike, distorts the compensation game. Stock option incentives and corporate buybacks now make legal acts once deemed market manipulation, and may have contributed to some of the recent bubbles.

One of the major problems is that Bill Clinton’s administration, in an effort to curb grossly excessive CEO salaries, decided that corporations could write off salaries in excess of $1 million only if the companies met certain performance metrics.  One was stock prices.  So corporations started to do stock buy-backs to artificially boost stock prices, thus perversely inflating those same CEO salaries, without benefitting employees, consumers or the long-term health of the economy. Today’s study tells us that even investors in these companies lose out.

If you want to be charitable, call it the law of unintended consequences. We’d have a much better handle on these trends if the Securities and Exchange Commission reported salary inflation over a ten-year period rather than one year at a time.

Candidates Clinton and Trump should be asked whether their administrations would do that. And they should be asked whether, as Rana Foroohar asked in Time Magazine, whether it’s time to rethink buybacks and stock options that encourage executives to focus more on share price than other metrics.

These discussions often get too complicated for the short attention span of most of us as we follow the news. But it’s a legitimate issue to be raised in some larger debate on the economy and its inequities. Especially when some of Bill Clinton’s key economic advisers are part of Hillary’s team.

At a minimum, boards of directors need to scrutinize CEO pay more closely, and more clearly align remuneration and perks with how a company produces and how it treats its employees. Failure to do that will continue to foster the kinds of understandable resentment that has fueled much of this year’s populist discontent.

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Debbie Wasserman Schultz should be fired now

debbie wasserman schultzBernie Sanders has been saying for eight months that the Democratic National Committee  rigged the primary system. He also has long said that, in the interest of fair play, DNC Chair Florida Congresswoman Debbie Wasserman Schultz should be forced to resign.

Emails written by DNC CFO Brad Marshall, released yesterday by Wikileaks,  suggest Sanders had it right.  We knew early on that the DNC thought Hillary a better choice than Bernie in November, so it scheduled fewer debates, started them later in the season than did the Republicans,  and held them on Saturday nights to minimize the audience.  But the DNC Chair  oversaw a thumb-on-the-scale operation that went farther.

The emails suggested that Sanders be critiqued because of his religion.  He is Jewish, but Committee staffers were suggesting that, beyond being a non-practicing Jew, he is an atheist (which he says he isn’t). This is totally outrageous and un-American. A move is now underway to deny Schultz a speaking role at the convention that she is running. The DNC Rules Committee has named Rep. Marcia Fudge, D-Ohio to wield the gavel at the sessions.

A new chair will be chosen anyway by Clinton after the gathering in Philadelphia. But Schultz should be required to step down today.  This issue shouldn’t be allowed to permeate the convention in the drip-drip-drip  way that RNC handlers fumbled that  plagiarizing of Michelle Obama’s 2008 speech by Melania Trump did.

Clinton campaign manager Robby Mook dodged the larger question on this morning’s talking head confabs, raising the specter that it was Russian hackers who had compromised the DNC computer system for a year.  He hinted that Russian hacking was designed to help Donald Trump, who has shown an affinity for Vladimir Putin. That’s a distraction, but it does indicate a disturbing lack of security in the Democrats’ computer system during Schultz’s watch.

Regardless of how the information was leaked, the emails speak for themselves. People at the DNC were thinking in traditional Nixonian terms, and the person at the top of the organization, Debbie Wasserman Schultz should be held accountable.

There are additional reasons Schultz shouldn’t head the party beyond her feckless leadership in the 2014 mid-term races. Sanders adds that she doesn’t address the working class concerns that have been the drivers of his campaign. After receiving many donations from the banking industry and $68,000 from payday lenders, Schultz voted against proposals to have the Consumer Financial Protection Bureau regulate payday loans.

She should have been dropped long before now. Forcing her to step down today has important symbolic value and could do much to ensure the fragile rapprochement between Sanders and Clinton supporters. The Democrats need to demonstrate that they are more unified than the Republicans. Discord won’t sell well.

Some have recommended that Housing Secretary Julian Castro speak in Schultz’s  stead, which has some appeal. There’s plenty of talent to replace her in that role and as party chair.  (It appears Donna Brazile  will  be the interim chairwoman through the election.)  The need is for the Democrats to remove Debbie Wasserman Schultz now.

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Donald Trump a clear and present danger*

Trump at RNCDonald Trump’s kids shone at the Republican national convention. Poised, articulate, attractive, they’d make any parent proud and certainly reflect well on their parents. Ivanka Trump’s call for pay equity and child care support were a welcome contrast to the GOP platform. So, too, was PayPal CEO Peter Thiel’s assertion that the party shouldn’t let “fake culture wars distract us from more important issues.” Of the party’s focus on which bathroom transgenders use, Thiel said, “Who cares?” But, as reassuring as these counterpoint messages might have been, they matter not one bit.  The only thing that counts is the party’s nominee, Donald J. Trump.

In a 75-minute scream, nominee Trump painted a picture of America as overrun by criminals, undermined by terrorists, marauded by immigrants, suffocated by regulators, crushed by trade deals with foreign nations, in short, a nation in imminent peril. His Kafkaesque world plays to people’s conscious and subconscious fears in ways we haven’t seen since the 1930’s.  He surpassed Richard Nixon’s call for law and order in 1968, pitting groups against each other and dividing rather than uniting.  Our nation is better than this and deserves better.

The media need to do more to expose Trump’s manipulation of facts, to push him to release his tax returns , which every candidate since 1976 has done (what’s he covering up?), to question his support of Vladimir Putin (campaign advisor Paul Manafort has been a consultant to several dictators), to demand details of Trump’s policies.  We should all pay heed to the observations of Tony Schwartz, who ghost-wrote The Art of the Deal, whose first-hand observations of Trump’s pathology in The New Yorker make one’s blood run cold. And read tomorrow’s NY Times column by Nicholas Kristof documenting Trump’s pattern of bigotry.  These portraits must give us pause.

Trump played to his base on Thursday night. His most effective line, directed to those with legitimate frustrations and feeling marginalized, was “I am your voice.” The challenge for Hillary Clinton is to convince voters that she understands their discontent and has specific strategies for dealing with its causes. Donald Trump’s voice is that of a liar, a narcissist, a demented authoritarian who believes he is the only person who can fix the challenges we face. He gave not one specific about how he’d put things right.

Hillary Clinton is a flawed candidate. Very flawed. But as Joe Biden said several years ago, don’t compare me to the Almighty; compare me to the alternative.” The alternative this year is someone who is, as a recent Washington Post editorial lays out,  uniquely unqualified by experience, temperament and character to lead the United States.* This nation cannot, must not,  assume the risk that Donald Trump represents.

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Republican convention: Red meat turns rancid, mean, and poisonous

Melania Trump at conventionTwo down, two to go. Days, that is, of the Republican National Convention.

I’m not watching gavel to gavel. I have a life. But, as a political junkie, I’m drawn to watch the evening activities, as deplorable as they are.

From an organizational perspective, especially for an alleged master of the spectacle, Day One was a disaster.  The Speakers’ schedule was neither timed well nor arranged to achieve maximum impact. Rudy Giuliani screamed hysterically to drive home the law-and-order message of Donald Trump, eager to play to the worst fears of the American people.  Gone was the firm but modulated Giuliani after 9/11.  Today’s version was like the head of a lynch mob.

Then there was Melania, whose speech should have been the climax of the opening day.   Donald’s gorgeous wife, who clearly didn’t write her speech herself (but foolishly claimed she did), was tarred by portions of it being lifted verbatim from Michelle Obama’s  speech at the 2008 Democratic convention. How bizarre is that, the wife of the devil being a role model!  Donald Trump kept the plagiarism story going by  failing to admit any transgression. Delaying until Wednesday for someone to own up kept the story dominating the evening’s and next day’s news. The man known for peremptorily snapping “You’re fired” meekly said the errant speechwriter and others involved in the debacle would not be punished.

Melania deserves points for her poised delivery of a simplistic paint-by-numbers paean to her husband, but she failed to provide a single anecdote to counter his image as a pathological narcissist. Could it be she didn’t have any?

I won’t even comment on the ludicrous stagecraft (blue smoke, no mirrors) heralding Donald Trump’s entrance to introduce his wife. Everything is always all about him, which helps to explain why he called Fox News in the midst of the gripping speech by Pat Smith, mother of Sean Smith, who blames Hillary Clinton “personally” for her son’s death in Benghazi.

Day two was better organized and finished on time, but it gave viewers little sense of how a Trump administration would bring back jobs, allegedly the evening’s theme.

Even though the convention voted and removed the word “presumptive” from Trump’s status, the program was more about Hillary than the nominee.  Intermittent chants of “lock her up” were the leitmotif.

Former Attorney General (now New Jersey Governor) Chris Christie was in full prosecutorial mode citing “facts” about Clinton. Even on simple policy differences, he used the audience as jury, repeatedly inviting members to declare her guilty or not guilty. You know what the answer was, and the repetition intensified, reaching fevered pitch, resembling nothing so much as the Salem Witch Trials. Christie played his attack dog well, perhaps adding to Trump’s buyer’s remorse he didn’t pick Christie for Vice President.

In that same spirit, former candidate Ben Carson not only made it clear the GOP sees this as a Christian nation, but also views Hillary as Lucifer. Has a national convention in either party ever been so venomous?

House Speaker Paul Ryan tried to appeal to the saner members of the RNC, talking about conservative principles and trying, unsuccessfully, to support the party nominee while dancing away from him.  As today’s NY Times editorial suggests, Ryan has diminished himself significantly in trying to have it both ways.  He has become what Trump disdains most, a “loser.”

The Trump kids shone last night. Recent college grad Tiffany, 22, was sweet and loving and reflected well on her father and his second wife, Marla Maples. Donald Trump, Jr., 38, gave a more traditional conservative speech, more substantive, better presented than anything his father has ever done. While some critics have said he cribbed the portion on education from The American Conservative,  the language seems more drawn from the marketplace of conservative ideas and, in any event, the column’s writer gave permission for its use (just as Deval Patrick had voluntarily shared verbiage with Barack Obama). Donald Jr. spoke to blue collar frustrations, pledged not to destroy Medicare, and even promised an end to loopholes that favor the wealthy. His singular interpretation of facts and his hyperbolic reflections on his father were standard convention fare. My bottom line is that he seems a much more sane version of his old man.

For the most part, this convention has been really ugly and often hateful, an accurate reflection of the GOP nominee. Donald Trump is fully in control. He is neck-and-neck with Hillary in the national polls, which probably don’t mean much at this time.

If he loses, he will have taken down the party with him, and a lot of decent conservatives will have to start over again from scratch.  If he wins, a lot of decent conservatives will have to start over again.

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Ruth Bader Ginsburg fumbles

Ruth Bader GinsburgSupreme Court Justice Ruth Bader Ginsburg was way out of line in her scathing criticism of Donald Trump. Three times in the last week, she let it be known she can’t imagine this country under a president Trump, She called him “a faker,” said he “has no consistency about him,” and added that he says whatever comes into his mind.  Which was exactly what she was doing.

It doesn’t matter than she wasn’t wrong on content. But she was dead wrong speaking publicly that way.  As she acknowledged this morning, it is wholly inappropriate for a Supreme Court Justice to weigh in on politics or a political candidate. Other justices have occasionally let their political views be known, but never this egregiously.  She was right to apologize, but it’s a little like trying to put the toothpaste back in the tube.

Will she have to recuse herself if the outcome of the Clinton v. Trump election went the route of Bush v. Gore? Would she have to recuse herself if Tom Brady appeals to the Supreme Court  for a stay in his  four-game suspension because she’s the single justice now handling appeals from the Second Circuit? And if she did recuse herself, would she also have to recuse herself from other deliberations on his case?  After all, he has made clear that Donald Trump is a good  friend of his?

Ginsburg deserves credit for owning up to the error.  Supreme Court Justices rarely, if ever, apologize for anything. Still, her regrettable remarks reinforce the sense that campaign 2016 is a race to the bottom and that the disease of name calling has infected the body politic far and wide.

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Race across America

Obama DallasPhilando Castile. Alton Sterling. Lorne Ahrens. Michael Krol. Michael Smith. Brent Thompson. Patrick Zamarripa. Seven men shot and killed last week. Seven senseless deaths, all speaking in one way or another to the racism laced through relations between African-Americans and the police. We have to be blind not to see it. Stone-hearted not to feel the tragedy of it.

There was a ghastly symmetry to the events in Baton Rouge, Minneapolis and Dallas. Two black men killed after having been stopped, respectively, by the police for selling CD’s outside a convenience store and for having a broken tail light. Five cops, a majority white, shot and killed while defending a crowd protesting the senselessness of the Baton Rouge and Minneapolis shootings – in Dallas of all places, esteemed for the excellence of its community/police relations. The world, our world, seems coming apart at the seams. Riven by centuries-old hatreds and fear. The missing ingredient: empathy.  The ability to walk in each other’s shoes.

Only if we work at empathy can we experience our common humanity. It’s hard for white people to understand the context in which black parents have to train their children to behave if they are stopped by police. It’s hard to appreciate the pressures on police facing danger every day as they fulfill their commitment to protect and to serve. Officers need to know their efforts and sacrifice are appreciated.

Minorities experience the criminal justice system differently from how whites do. Minorities fear police more than they respect them. One need look only at the video of the Baton Rouge and Minnesota killings to understand why.

That said, we need better training of police so they react with more than their fear. We need better preparation of young people to reduce the risks of confrontation if they are stopped. The tragedy of last weekend is that reportedly Dallas has an excellent record on de-escalation.

Despair, disgust and depression suffused the weekend. Then came little signs for optimism. Black protesters hugging white police officers. Blacks and whites joining together in prayer vigils. And then, President Obama’s moving speech at the memorial service in Dallas. He grieved with the families of the slain officers and described the details of their lives. He reminded us how the police were there to defend protesters whose views differed from their own and ran toward the gunfire to protect them and their rights to criticize policing. He also spoke to the wounds of communities devastated by police shooting.

After eight years as our first “post-racial President,” Barack Obama clearly and sadly understands the fault line that racial hatred scores in our democracy. But as the nation’s mourner in chief, his words that “we are not so divided as we seem” had a tentatively healing impact. The challenge is, as he put it, to keep the spirit of “unity, born of tragedy,” from gradually dissipating. This will require more than a programmatic approach, improving training, reducing easy access to heavy duty weaponry. It means acknowledging the prejudice that lurks in our hearts, listening to others, walking in their shoes.

One fears that as early as the party conventions next week the President’s call for unity will be a relic. Both presidential candidates animate distrust, animosity and hatred.  The police will be out in force. So will the protesters. And so will some who want to hijack the protests for their own agendas. We will learn from both conventions more about which candidate is better equipped to unify and heal.  (I believe I know the answer to that.) Loud voices need to give way to the hard work lies ahead.

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FBI sends Hillary to the woodshed

Hillary 3As one analyst put it, Hillary was not indicted but she was convicted  in the court of public opinion. Of extreme carelessness in handling emails.  Of setting up a private, nonsecure server in her home and using it to transmit sensitive information that dealt with subjects that should have been better protected. The use of drones in Pakistan is one example. She should have known better.

But Republican-appointed FBI Director James Comey concluded that because neither Hillary Clinton nor her colleagues intended to break any laws and because “no reasonable prosecutor” would indict, the FBI would not pursue an indictment. Attorney General Loretta Lynch (she of the inappropriate tarmac meeting with presumptive first spouse Bill Clinton)  unsurprisingly accepted the conclusion.

While rejecting criminal charges, Comey gave Clinton and her insiders a 15-minute lacerating rebuke, censuring the State Department security culture, or lack thereof. There was every indication that the behavior would have faced serious administrative sanctions in a different situation.  In fact, one wonders if such sanctions might be imposed on other Clinton State Department officials, including loss of security clearance, if they were to be made part of her administration.

If we thought that failure to be indicted would make this issue go away, not so fast. Donald Trump has enough sound bites from Director Comey to fill the airwaves from now to November. It has already started. The problem for Hillary is that her candidacy is rooted in her vast experience, competence,  and ability to manage relationships here and abroad. The Comey analysis undercuts that brand. And decades of attacks, charges of scandals,  investigations and her carefully parsed responses to them have fed the sense that she is not trustworthy and that both Clintons behave outside the rules whenever it suits them.

What makes matters worse is that House Republicans are primed for a perjury probe. Today’s grilling of Comey makes clear that the House will formally ask the FBI to investigate whether Clinton lied during her Benghazi testimony about her handling of emails.

As Globe columnist Scot Lehigh commented on Greater Boston, the emails “are not a huge disqualifying issue.” To which I would add, especially when you consider the alternative. My hope is she will take this hit as an opportunity to reset her campaign for the general election, being more open with the press for starters. The fact that this is a truth-challenged election doesn’t mean that voters don’t care. While it will be difficult to put the  email mess behind, there are larger stakes in this election. She could win without hitting the reset button, but victory will mean a lot more if she stands for something other than not being as bad as the other candidate.

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