[Marxism] C.E.O.s Should Fear a Recession. It Could Mean Revolution.

Louis Proyect lnp3 at panix.com
Wed Aug 21 16:42:17 MDT 2019

NY Times, Aug. 21, 2019
C.E.O.s Should Fear a Recession. It Could Mean Revolution.
By Farhad Manjoo

A recession looms, and the nation’s C.E.O.s are growing fearful.

It isn’t the potential of downturn itself that has them alarmed — 
downturns come and downturns go, but whatever happens, chief executives, 
like cats, tend to land on their comfortably padded feet.

Instead, the cause of their fear appears to be something more 
fundamental. As Alan Murray, the C.E.O. of Fortune, writes in a cover 
story chronicling the C-suite anxiety: “More and more C.E.O.s worry that 
public support for the system in which they’ve operated is in danger of 
disappearing.” They’re worried that when the next recession breaks, 
revolution might, too. This could be the hour that the ship comes in: 
The coming recession might finally prompt the masses to sharpen their 
pitchforks and demand a reckoning.

Company executives are right to worry. A downturn will mark the end of a 
record period of uninterrupted economic expansion. The American economy 
has been growing for more than a decade, stock indexes recently hit new 
highs, and the unemployment rate is at a 50-year low.

And yet the vast majority of Americans will not look back on the last 
decade as years of fat and plenty. This was a gilded expansion, a decade 
of creaking wage growth and profoundly unequal outcomes. The number of 
Americans receiving food stamps is 40 percent higher now than in 2008, 
yet we have twice as many billionaires as we did a decade ago.

This was an expansion driven by outsized gains to a handful of 
“superstar” firms in “superstar” cities. Economic devastation reigned in 
rural areas alongside catastrophic success in urban ones — an expansion 
marked by housing crunches and infrastructure nightmares that every 
level of government seems incapable of addressing. Corporate profits 
grew as if there were no tomorrow, but they didn’t trickle down to 
everyone else. Instead, dividends and stock buybacks got bigger while 
C.E.O. pay went through the rose-gold roof. The rest of us got 
smartphones, money-losing conveniences — Uber, WeWork, Netflix and meal 
delivery apps — and mountains of student debt.

And so, when recession comes, we’ll be right to ask: Was that it? Is 
this the best it gets? And if so, isn’t it time to go full Elizabeth 
Warren — to make some fundamental, radical changes to how the American 
economy works, so that we might prevent decades more of growth that 
disproportionally benefits the titans among us?

But the C.E.O.s now have a plan to head off revolution. They want you to 
know: Actually, they really do care about the world. Like, a lot.

This week, in a statement widely feted by well-meaning Davos types, the 
Business Roundtable — an association of chief executives of nearly 200 
companies, including Apple, Amazon, General Motors and Walmart — 
declared that the era of soulless corporatism was over. The Business 
Roundtable once held that a corporation’s “paramount duty” was to its 
shareholders. Now, the Roundtable is singing a new, more inclusive tune. 
A corporation, it says, should balance the interests of its shareholders 
with those of other “stakeholders,” including customers, employees, 
suppliers and local communities.

In other words: no more Mr. Terrible Guy. Corporations are people, my 
friend, and it turns out that they’re really nice people, both 
interesting and interested, and we really must have them over for dinner 

I spent a tedious few minutes this week trying to come up with an 
analogy to convey how thoroughly empty I found the Roundtable’s gesture 
to be. I think I got one: Imagine a co-worker has been stealing your 
lunch from the office fridge for years. Then, one day, he strolls in 
with a big grin and grand announcement. Maybe he unfolds a scroll and 
blows a trumpet. He has realized that “lunch maximization” might not 
have been the best approach after all, and he will now try to be aware 
of the wider consequences of some of his actions. Yes, he still really 
wants your lunch. Yes, he will probably still fight any efforts to 
prevent him from taking your lunch. But you should know that he also 
feels a tinge bad about how it’s all worked out. So, no hard feelings?

I mean: Yay? It’s nice that C.E.O.s have vowed to turn over a new leaf. 
But their statement lacks any call for greater structural changes in the 
American economy — changes to how companies are taxed or regulated, or 
how executives are paid, or how they should be judged.

And because a public corporation’s most direct incentives — including 
the C.E.O.’s pay — remain tied to stock performance, there’s no reason 
to believe that corporations will voluntarily move away from pleasing 
shareholders alone, despite the new, high-minded ideals. In fact, the 
fanfare surrounding the Roundtable’s empty statement could be read as an 
effort to stave off structural economic reform rather than accelerate 
it. It’s a way for the C.E.O.s to tell us that they’re on the case, so 
we don’t have to resort to something unthinkable, like a Warren presidency.

If I sound cynical, it’s only because I’m not a complete idiot. In the 
Trump era, America’s C.E.O.s have become masterful at talking out of 
both sides of their mouths. They’ll rush to issue virtue-signaling 
denunciations of the latest outrage from President Trump in order to 
please their woke, restless customer bases, while on the down low, 
they’ll champion his tax cuts and regulatory dismantling. And when the 
president gets too rowdy, they’ll tell him to knock it off over a 
friendly dinner.

It’s all a game to the moguls in charge. Their greatest fear is that 
we’ll stop playing.

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