“[T]he continued failure of our societies to be clear-eyed about the role of the for-profit corporation endangers the public interest. Instead of recognizing that for-profit corporations will seek profit for their stockholders using all legal means available, we imbue these corporations with a personality and assume they are moral beings capable of being “better” in the long-run than the lowest common denominator.”
Where did we get this idea that the United States is like a company? And that we would be best served with a CEO for president? A list of our most recent presidential businessmen is far from illustrious—instead, the two Bushes and Carter are widely recognized to be executive failures.
The truth is, the U.S.-as-company metaphor is one that’s scarily accurate but horribly unjust. It’s an expression that says more than we’d like it to say about America. And it’s a metaphor that we’ve got to overcome if we want a real, lasting, and fair economic recovery.
It’s heartbreaking, really. That when we think of individuals coming together to achieve something, that when we imagine the values and ideals that undergird our society, the metaphor that sticks in our political discourse is company. Really? Not school or village or family? Come on, America—not even church?
I get it. Companies have people (are people?) and America has people. Companies make jobs and America needs jobs. Companies have budgets and America has a very, very tight budget unless it’s for the military or rich people. (Just kidding—America’s not broke at all.)
But there’s much more to the comparison than Romney would like to admit when he says, “I spent my life in the private sector. I know why jobs come and why they go.”
So what exactly does a company do when, like the U.S., it’s faced with hard economic times? How does a CEO balance his budget? You don’t have to be an economist to get it right: they slash jobs, cut wages, reduce quality, deny coverage, outsource where possible, and dissolve if necessary. Which is awesome when the products this company puts out are, say, public education and Medicaid and disaster relief and bridges and stuff. And if these companies turn to Bain Capital or other private equity firms in the process, they’ll dissolve in a way that leaves both the dissolvers and the shareholders wealthy—even as employees are laid off.
What’s interesting is that this private equity bait-and-switch very much mirrors what’s been happening in America since the 1960s. It’s the Taibbi vampire-squid in slow motion, quietly sucking the value out of the American worker and concentrating it in the wealthiest do-nothings, far past the point of “incentivizing job creators.” And, lest I seem hyperbolic, let me explain what “sucking the value out of the American worker” looks like: between 1973 and 2011, productivity grew 80.4 percent when worker pay grew just 10.7 percent. Between 1983 and 2010, the top five percent of Americans experienced 74.2 percent of the wealth growth. Seventy four point two percent. Fact check me on that one.
In this sense, America is very much a company and the rich are undoubtedly its CEOs. The wealth gap between the typical American family and the 1% has more than doubled in the last 50 years—where the top 1% had 125 times the net worth of the median family in 1962, they now have 288 times as much as the median American family. Similarly, where CEOs were paid 20.1 times as much as the average private-sector worker in 1965, they’re now paid 231 times as much. And we know that the wealth vacuum in both private equity and America generally occurs all while Americans lose more and more jobs.
Isn’t it great that we Americans all have a stock in this marvelous, egalitarian corporation? One so willing to pay workers less money for more work, before eventually firing them and shipping the job overseas—all to shave off some extra earnings for the execs?
Don’t get too excited. As the recent foreclosure crisis demonstrated, our shares are not all created equal. The bailouts and Fed actions under Obama ensured that the shares of the wealthiest Americans are virtually immune from market forces (or even criminal liability). As corporate profits recovered immediately when Obama took office, the figurative shares of typical Americans (savings held in home equity) remained stagnant. Bear in mind that stagnant, for a third of Americans, means an underwater mortgage.
But let’s get real. Even if we, the average Americans, possess a share of the national stock, we sure as heck don’t have a controlling interest. Instead, discussed above, the richest 10% own more than two-thirds of the wealth. How’s that for a shareholder supermajority?
And, possessing that supermajority of wealth ownership, they control the conversation. Professor Lessig is right to say that, “because of the way we fund the campaigns that determine our elections, we give the tiniest fraction of America the power to veto any meaningful policy change.” As of July, merely 196 Americans (a whopping .000063 percent) had given more than 80 percent of the individual super-PAC money spent in the presidential campaign. At least these people aren’t crazy or anything. And at least they have America’s interests at heart. Right?
Let’s talk about what these figures actually mean. They help us understand that skyrocketing wealth inequality is a zero-sum game. Romney was wrong to say Americans lack responsibility, but he was right to say that we are entitled victims—when people work longer hours but don’t make any more money, they are being victimized and they are entitled to those lost wages.
This is what it means to run the country like a CEO. This is what it means to treat the country like a company. And it’s time we drop the slick boardroom talk when it comes to running a decent, fair, and honest country.
After all, the “point” of America isn’t to maximize profits, as corporations are legally required to do. Nor is it to serve the interests of some of its shareholders and not others. The metaphor gets us nowhere. Its seeming value-neutrality only serves to reinforce the heartless and hypocritical budget manipulation that expands military spending while gutting education. More than anything, it conveys a profound disrespect for what we as Americans are capable of achieving together—not higher profits, but a more just society.
We are not “shareholders” of America. Nor are we “customers” of America, despite the capitalization of our electoral process. We are citizens, and it’s time we thought of ourselves as such.
You want a metaphor? The possibilities are endless: America-as-family, America-as-high school, America-as-intramural-sports-team. Select your simile. As for America-as-company? The days of that selfish, individualistic metaphor have come and gone. We know what companies and their CEOs do during a recession—they take the money and run.
As for families and high schools and sports teams? They invest in each other, they recognize community is more valuable than commodity, and, most importantly, they win and lose together. Let’s try a metaphor that works for all Americans.