The WAPO Beats The Class Warfare Drum

I was amused to see a feature article in today's Washington Post entitled, "With executive pay, rich pull away from rest of America". Of course, it's essentially an Obama campaign ad cleverly disguised as a news feature.

The article focuses on what it refers to as 'the evolution of executive grandeur' as a major reason 'that the gap between those with the highest incomes and everyone else is widening.'

As the horrible example, it compares the compensation given to the former CEO of Dean Foods, a dairy firm, with the huge salary given to the current CEO,Gregg L. Engles, "..who averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time — two in Texas and two in Colorado. While Douglas’s office sat on the second floor of a milk distribution center, Engles’s stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the company’s $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal."

It then compares Engle's compensation with that of his unionized employees, who apparently average around $23 per hour, not including their benefits.

OOOOOH! Eat the rich! They make too much money! Tax them up the wazoo! Spread the wealth around!'




Perhaps CEO Gregg L. Engles isn't worth $10 million per year and all the perks. Perhaps the professors and sociologists liberally quoted in this 6 page article aren't worth what they make. And I bet there's even an argument that Peter Whoriskey, the WAPO writer who put this piece together isn't worth what he makes.Can anyone seriously tell me that there isn't an underemployed writer out there capable of redacting stuff from the AP and knocking a feature like this together for a lot less than Whoriskey's being paid?

Of course in Engle's case, there's really only one group of people who ought to give a damn what Mr. Engles is paid, and that the people who pay his salary - the stockholders of Dean Foods.

Business exists to make a profit, nothing else. If the board and stockholders of Dean Foods feel that Gregg L. Engles doesn't contribute enough management skills, expertise and value added to make him worth what they're paying, then they're fools to be paying him so much.

But maybe, just maybe, they do.

It's a cinch that the writer of this piece has never had to run something as complex as a large, competitive corporation and make multimillion dollar decisions on items like juggling tax positions, union demands, cost accounting, marketing, government regulations or vendor contracts, and it's also a cinch that if he were hired to do so, he'd make a complete travesty of it.

What Dean Foods is likely doing is paying for what they feel is a unique set of skills at what they feel is a rate competitive enough to attract top talent..rather like a sports team. And you know what? Mr. Whoriskey gets paid based on exactly the same scale, unless there's a situation where other factors are involved like there was with Barney Franks' old boyfriend and Fannie Mae.

Another aspect of this that the class warfare groupies always overlook is that someone like Greg Engles and his $10 million dollar salary provides employment and growth for the economy aside from whatever profits he's helping create at Dean Foods, unless he's burying the money in his backyard.

Money by its very nature can be used for only two things - the purchase of goods and services or investment. Whether he's using his money to buy a set of expensive golf clubs, purchase some steaks for this weekend's barbecue, pay the gardener who cuts his grass, buy an annuity or some stocks for his portfolio or simply sticks it in his bank account, a portion of that money goes into someone else's pocket..who likewise pays for goods and services or for an investment.

That's the real and healthy way to spread the wealth around, because it provides an incentive for people to keep on working to create more wealth..which all goes to enrich the economy.

It's high time the class warfare groupies realized it and dispensed with the politics of envy.

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