Posted on 04/25/2003 3:53:39 PM PDT by Congressman Billybob
No, this is not about the Iraq War, or the post-war reconstruction of Iraq, or the French view of America's position in the world. It's about a single bad decision by the top officers of the world's largest airline, American Airlines, that will probably dump that carrier into bankruptcy. This decision goes beyond wrong, beyond greed, all the way to world-class stupidity. And the reason behind it applies in many areas of American life.
To set the stage: When times were fat for the airline industry, American signed fat contracts with the various unions of its employees. Now that times are slim (for every airline except the likes of JetBlue and Southwest), American's cash is bleeding dry at a rapid rate. The airline decided, rightly, that it had two choices – either seek major concessions from its unions, or go bankrupt.
So American apparently placed its cards on the table, and asked for a total of $1.8 billion in payroll concessions from its three major unions, the transport workers, the pilots and the flight attendants. Initially, the first two unions agreed but the third one narrowly rejected the plan. Then the flight attendants agreed to vote again, and it looked like American would escape the financial woods in the nick of time.
Meanwhile, American was required to file a regular report to the Securities and Exchange Commission. One of the mandatory parts of this filing was a description of "Executive Compensation." American asked for an extension on the filing date of this report, perhaps not coincidentally to the very day that the unions were asked to confirm their decisions on the $1.8 billion give-backs in employee compensation. Buried in the fine print of that SEC filing were the details of corporate guarantees for the pension trust fund and retention bonuses for seven top executives of American Airlines' parent company.
I do not know the salaries of those top seven executives, but based on the size of the corporation and similar salaries in other corporations, they are probably in the $2 to $5 million range. What is the personal value of a multi-million-dollar salary? To an ordinary American, such amounts are beyond comprehension. They are far larger than necessary to keep a roof over your head, food on the table, a car in the driveway, provide for medical care, education, retirement, etc. As Art Linkletter once remarked, "Beyond a certain point, the only purpose of money is to keep score."
The seven top executives, led by President Donald J. McCarty of AMR Corp. (the parent company), were trying to fatten their bank accounts by a few surreptitious extra millions. At the same time, they were asking the rank and file workers at American to take pay cuts of up to 20% each. But the story gets worse than that. When the Wall Street Journal broke the story of the quiet benefits for the seven executives, a company spokesman claimed the presidents of the unions had been briefed on "all the details" of these executive compensation wrinkles. Later Mr. McCarty admitted the union officials had not been informed of these details, and apologized for "whatever harm may have been caused."
The original corporate statement made a bad situation even worse. In effect, it accused the union presidents of misleading their own workers, by knowing about the executive compensation but not mentioning it. That was false. In the immortal word used by Ron Nessen about a statement by President Nixon, the first statement was "inoperative." The union presidents are, of course, furious. All three are talking about revotes to revoke their concessions.
Mr. McCarty has now fallen on his sword, and resigned as President in an effort to assuage the unions and keep American out of bankruptcy. But the other six executives slated for bonuses, remain in place. So do the Board Members who voted for the executive benefits. We will see whether the McCarty resignation, a token for the unions, will be sufficient to prevent the bankruptcy.
What is going on here? Is this greed gone wild? No, it is deeper and worse than that. It is all-American arrogance. It is a group of people at the top of the heap deciding that they are so big and powerful that they do not have to abide by the kind of rules that apply to the "little people." This happens in many parts of American society, and not just over money.
For example: It was seventeen years ago that I attended the graduation of my oldest child, Dorigen, from Loyola University, an excellent Jesuit university in Baltimore. She had taken a minor in business management. We were sitting at a table at the reception with several of her fellow students who had taken the same program. This was just days after Gary Hart's last bid for President had gone down in flames.
I put this question to these students – still wet behind the ears and with limited real world experience: "You are an advisor to a presidential candidate. You know that candidate, who is married, is planning to take a trip to Bimini on a boat named the Monkey Business in the company of some bimbos, and photographs may be taken. What would you say to him?" The gist of the their comments, in printable form, was, "Are you out of your [bleeping] mind?"
I would be inclined in 2003 to leave Gary Hart alone, even though I know from colleagues in the legal profession that his troglodytic attitude toward women – that they are merely a public utility – remains unreconstructed. But he has made himself a public issue again, by engaging in a boomlet of Gary Hart for President.
What conceivable thought process could Gary Hart have engaged in, to do the things he did which knocked him out of the race before? It was for his own gratification. He thought he could get away with it. He thought he SHOULD get away with it, because after all, he was an important man and the rules for "little people" should not apply to him.
All-American arrogance. Gary Hart was Bill Clinton long before Bill was. But Gary wasn't as good at it as Bill.
Or, try another example. Leona Helmsley went to jail for tax fraud concerning her use of the funds of Helmsley Hotels as her private slush fund. One of the enduring quotes from her trial was her comment to one of her servants, "Only little people pay taxes." Again, she not only thought she could get away with it, she thought she should.
All-American arrogance.
Or, consider Tim Robbins's bitter speech before the National Press Club in Washington a week ago that he was being punished for his anti-war views, that "a chill wind was blowing" in America. Of course Tim Robbins is entitled to freedom of speech. As a First Amendment lawyer I would be the first to defend his right. But implicit in his speech was the idea that the "little people" do not have freedom of speech.
No one would come if the "little people" held a press conference. No one would quote them if they issued a press release. The "little people" have only one way to speak to someone whose career depends on their dollars. They can choose whether to buy movie tickets. They can choose whether to buy CDs and DVDs. And in that way only, their voices can be heard.
Tim Robbins was guilty of all-American arrogance. And to their discredit, the assembled reporters at the Press Club did not call him on it.
Or consider the various corporate executives now on trial for assorted misdeeds prior to, and related to, the collapse of the stock markets. Their first defense is that they are so rich and powerful that they should not be found guilty. Failing that, the second defense is that they are so rich and powerful they should be given light sentences.
Most of them, and their lawyers, will assiduously avoid the incredible bad timing of the President of AMR Corp. Most of them will refrain from any in-your-face quotes like Leona Helmsley's statement. But the message is still the same. The rules that apply to the "little people" don't apply to us.
All-American arrogance.
The "little people" in America know how to live their lives properly. Work hard. Keep your nose clean. Get the facts straight and make solid decisions based on them, whether the subject is what to do tomorrow at work, or the most difficult decisions that any adult ever faces, how to raise your teenagers.
Furthermore, the "little people" have good instincts in judging the merits or demerits of public figures and private leaders. I have dealt with the "little people" on juries. I've talked with them as voters. I've worked with them as customers. I count myself a member of that tribe. The "little people" are the backbone of America. We always have been. We always should be.
Whenever you encounter anyone who turns the face of all-American arrogance toward you, reject him, her or them. Do not give them your dollars, your votes, your children to educate, your respect, or your faith. They do not deserve it, and you can find better.
American Airlines has gotten bankruptcy the old-fashioned way, they earned it. But there are other forms of bankruptcy – political, moral, intellectual. And all who are headed down those various paths, also deserve their fates. We can help them get there. It's as American as apple pie.
- 30 -
As published by UPI, as my editor just informed me, the five paragraphs about Gary Hart and Bill Clinton are cut out of the published version. UPI may not want to publish those paragaphs, but I do. So they remain in this text.
As of now, I am going back to occasional articles rather than a set monthly column on UPI, and writing under my real name. Congressman Billybob will, nonetheless, continue to write weekly, and post columns on FR.
I think y'all will appreciate this one. Feel free to substitute "Dixie Chicks" for the references to "Tim Robbins" and "Diane Sawyer interview" for "National Press Club." It works just as well, either way.
Of course he was just showing his respect for the Constitution (Amendments XVIII, XX, XXI, and XXII).
They wouldn't be softly treating you with "All-American arrogance", would they?
It wasn't the "little people". It was the "U.S. Senators" that allowed Clinton to get away with it.
And, in their minds, they're anything but "little people"...
Billybob
NC ping!
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Signed:
"One of the little people"
The managers of AA were acting more than arrogantly -- they were acting as owners of AA, rather than the hired hands they actually are. They were acting to primarily benefit themselves rather than the future of the company, which is their primary fiduciary duty
A few million is not yet at the level of "just keeping score", though. It can still be spent in a manner that makes a distinct lifestyle difference, such as letting you have a private jet (rather than having to sit in a seat of an airliner like the rabble) and allows you to employ a few personal servants and a couple of mistresses on the side.
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