[Marxism] NYT: CEO's should fear recession. It could mean revolution.

John Reimann 1999wildcat at gmail.com
Wed Aug 21 18:26:14 MDT 2019


By Farhad Manjoo <https://www.nytimes.com/by/farhad-manjoo>

Opinion Columnist

A recession looms
<https://www.nytimes.com/2019/08/17/upshot/how-the-recession-of-2020-could-happen.html?module=inline>,
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
<https://fortune.com/longform/business-roundtable-ceos-corporations-purpose/>:
“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 <http://www.bobdylan.com/songs/when-ship-comes/>:
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
<https://www.cnbc.com/2019/07/02/this-is-now-the-longest-us-economic-expansion-in-history.html>,
stock indexes recently hit new highs
<https://www.cnn.com/2019/07/11/investing/dow-stock-market-today/index.html>,
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
<https://fns-prod.azureedge.net/sites/default/files/resource-files/SNAPsummary-8.pdf>,
yet we have twice as many billionaires
<https://www.nbcnews.com/business/economy/we-re-longest-economic-expansion-ever-it-s-rich-who-n1025611>
as
we did a decade ago.

This was an expansion driven by outsized gains to a handful of “superstar”
firms in “superstar” cities
<https://www.mckinsey.com/featured-insights/innovation-and-growth/superstars-the-dynamics-of-firms-sectors-and-cities-leading-the-global-economy>.
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
<https://www.nytimes.com/2019/05/22/opinion/california-housing-nimby.html?module=inline>.
Corporate profits grew as if there were no tomorrow, but they didn’t
trickle down to everyone else
<https://www.vox.com/policy-and-politics/2019/6/26/18744304/ceo-pay-ratio-disclosure-2018>.
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,”
<https://www.nytimes.com/2019/08/19/business/business-roundtable-ceos-corporations.html?module=inline>
including
customers, employees, suppliers and local communities.


In other words: no more Mr. Terrible Guy. Corporations are people, my friend
<https://www.youtube.com/watch?v=E2h8ujX6T0A>, and it turns out that
they’re really nice people, both interesting and interested, and we really
must have them over for dinner sometime.

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
<https://www.theverge.com/2019/8/18/20811555/trump-tim-cook-tariffs-samsung-china-trade-war>
.

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


https://www.nytimes.com/2019/08/21/opinion/economy-recession.html?action=click&module=Opinion&pgtype=Homepage



-- 
*“In politics, abstract terms conceal treachery.” *from "The Black
Jacobins" by C. L. R. James
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