The grown-ups are planning a coup
Oh my dear God:
Anyone watching the Washington budget debate over the past decade must have wondered why there didn’t seem to be any grown-ups in the room — someone who could cut through what Honeywell’s Dave Cote calls the “hysteria, histrionics and hyperbole” and force the bickering children to agree on a reasonable compromise.
That’s what the voters want, what the economy demands and what country must now have to regain its confidence and its global influence.
Some grown-ups who have been noticeably absent from this conversation have been the heads of the country’s major corporations, who talk a good game about deficit reduction but haven’t invested the time, money and political capital necessary to jolt the political system from its dysfunctional equilibrium.
That’s about to change. Last week, the first battalion of CEOs showed up in Washington, reporting for duty.
During the past year, there have been quiet meetings put together by chief executives such as Cote, Aetna’s Mark Bertolini and JPMorgan’s Jamie Dimon, and Senators Mark Warner (D) and Saxby Chambliss (R), the ringleaders of the bipartisan Gang of Six. Nudging it along and pulling it all together has been Maya MacGuineas, who for a decade has been sounding the deficit alarm from the Committee for a Responsible Federal Budget.
In addition to Cote, Dimon and Bertolini, the charter business members include Sandy Cutler of Eaton, Gregg Sherrill of Tenneco, Marty Flanagan of Invesco, Gary Loveman of Caesars, Thomas Quinlan of R.R. Donnelley & Sons and financiers Steven Rattner and Pete Peterson.
This is the "Fix the debt" group I wrote about last week. I didn't realize John Galt was going to be the front man, but the whole project is just perverse enough that it makes sense.
What's most infuriating about this piece is the blithe assumption that a) this is the biggest problem in the universe and b) Wall Street sharks like Jamie Dimond are coming to the rescue. Talk about putting the foxes in charge of the henhouse.
They aren't going to let up on this.
Dean Baker writes:
Steven Pearlstein, the Washington Post business columnist, often writes insightful pieces on the economy, not today. The thrust of his piece is that we all should be hopeful that a group of incredibly rich CEOs can engineer a coup.
While the rest of us are wasting our time worrying about whether Barack Obama or Mitt Romney are sitting in the White House the next four years, Pearlstein tells us (approvingly) that these honchos are scurrying through back rooms in Washington trying to carve out a deficit deal.
The plan is that we will get the rich folks' deal regardless of who wins the election. It is difficult to imagine a more contemptuous attitude toward democracy.
The deal that this gang (led by Morgan Stanley director Erskine Bowles) is hatching will inevitably include some amount of tax increases and also large budget cuts. At the top of the list, as Pearlstein proudly tells us, are cuts to Social Security and Medicare. At a time when we have seen an unprecedented transfer of income to the top one percent, these deficit warriors are placing a top priority on snatching away a portion of Social Security checks that average $1,200 a month. Yes, the country needs this.
He repeats what we all know: they want to change the cost of living formula that will result in cutting social security by nearly 10% over time. If I'm lucky enough to live into my 80s, I'll be feeling it. But hey, I guess I can always get a job to make up for it, right?
Oh, and they want to raise the Medicare eligibility age. Because buying insurance in your 60s is so inexpensive. (Even under Obamacare it's expensive as hell.)
But not to worry. These "grown-ups" will reluctantly agree to close a few loopholes (yeah, right) in exchange for lowering their rates which every Very Serious Person agrees is not only a great way to raise revenue but also a tremendous sacrifice for the millionaires.
It's a balanced approach. Hallelujah.
Just so you know how much the sacrifice is going to hurt our grown-ups:
David M. Cote J.D.
Chairman and Chief Executive Officer, Honeywell International Inc.
$37,842,723 annual compensation
Alexander M.(Sandy) Cutler
Executive Chairman, Chief Executive Officer, President and Chairman of Executive Committee, Eaton Corporation
$13,586,010 annual compensation
Gregg M. Sherrill
Executive Chairman and Chief Executive Officer, Tenneco Inc.
$5,750,640 annual compensation
Martin L. Flanagan
Chief Executive Officer, President and Executive Director, Invesco Ltd.
$13,420,458 annual compensation
Mark T. Bertolini
Chairman, Chief Executive Officer, President, Chairman of Executive Committee and Member of Investment & Finance Committee, Aetna Inc.
$10,556,335 annual compensation
Thomas J. Quinlan III
Chief Executive Officer, President and Director, R.R. Donnelley & Sons Company
$6,059,714 annual compensation
Chairman, Chief Executive Officer, President and Member of Operating Committee, JPMorgan Chase & Co.
$23,105,415 annual compensation
Those are all figures for 2011. There's no annual compensation info available for the rest of them.
I'm sure they're really going to feel the pinch in this deal. The 90 year old women who will have 10% less of their already meager social security probably won't suffer half as much.