Tuesday, March 31, 2009

The Silence Surrounding Sri Lanka

Published on Tuesday, March 31, 2009 by The Boston Globe
Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at] verizon.net
"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs

A J'accuse for CAP, MoveOn Afghanistan Silence



We still have tickets for the Baltimore bus which will leave at 7 AM to be in NYC on April 4 for the UFPJ rally at Wall Street.  Contact me to buy a ticket.  Max


Published on Monday, March 30, 2009 by The Nation

A J'accuse for CAP, MoveOn Afghanistan Silence

by John Nichols

President Obama went on CBS News' "Face the Nation" Sunday to make the case for his great big war [1] in Afghanistan.

The good news is that Obama says, "What I will not do is to simply assume that more troops always results in an improved situation."

The bad news is that Obama is dispatching more troops to a country that has never taken well to occupation.

So where is the MoveOn.org blast condemning the ramping up of an undeclared war and the president's refusal to rule out an even more dramatic expansion of that war to Pakistan? Where is the memo from the Center for American Progress outlining the case against giving the president "a blank check for endless war"?

Don't hold your breath, says John Stauber, executive director of the Center for Media and Democracy and the co-author of Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraq [2] and The Best War Ever: Lies, Damned Lies and the Mess in Iraq [3], two of the most scathing books on the Bush-Cheney administration and its war in Iraq.

In a no-holds-barred critique of groups that earned their reputations as critics of the rush to invade and occupy Iraq, Stauber argues that the Obama administration has effectively co-opted some of the nation's most high-profile anti-war groups.

Here's what Stauber writes in a piece titled: "How Obama Took Over the Peace Movement," which appears on the CMD website [4]:

John Podesta [5]'s liberal think tank [6] the Center for American Progress [7] strongly supports Barack Obama [8]'s escalation of the US wars in Afghanistan and Pakistan [9]. This is best evidenced by Sustainable Security in Afghanistan [10], a CAP report by Lawrence J. Korb [11]. Podesta served as the head of Obama's transition team, and CAP's support for Obama's wars is the latest step in a successful co-option of the US peace movement by Obama's political aids and the Democratic Party [12].

CAP and the five million member liberal lobby group MoveOn [13] were behind Americans Against Escalation in Iraq [14] (AAEI), a coalition that spent tens of millions of dollars using Iraq as a political bludgeon against Republican [15] politicians, while refusing to pressure the Democratic Congress to actually cut off funding for the war. AAEI was operated by two of Barack Obama's top political aids, Steve Hildebrand [16] and Paul Tewes [17], and by Brad Woodhouse [18] of Americans United for Change [19] and USAction [20]. Today Woodhouse is Obama's Director of Communications and Research for the Democratic National Committee [21]. He controls the massive email list called Obama for America [22] composed of the many millions of people who gave money and love to the Democratic peace candidate and might be wondering what the heck he is up to in Afghanistan and Pakistan. MoveOn [13] built its list by organizing vigils and ads for peace and by then supporting Obama for president; today it operates as a full-time cheerleader [23] supporting Obama's policy agenda. Some of us saw this unfolding years ago [24]. Others are probably shocked watching their peace candidate escalating a war and sounding so much like the previous administration in his rationale for doing so.


Stauber's piece has circulated widely in recent days, stirring the same sort of dialogue that his previous criticisms of MoveOn [25] inspired.

The truth is that important players in the anti-war movement are speaking out against Obama's Afghanistan buildup.

Peace Action [26] is petitioning Congress to oppose Obama's Afghanistan plan. Peace Action executive director Kevin Martin has compared the president's moves with those of John Kennedy in Vietnam:

"It's a shame President Obama believes he can pursue the same militaristic strategy as his predecessors and produce a different result. While President Obama has made some good statements on increasing diplomacy and economic aid to Afghanistan and Pakistan, the emphasis is clearly on military operations. John F. Kennedy was in a comparable situation when he was elected. He chose to escalate then as well, and the consequences of his decision left our country mired in an unwinnable war."

The Friends Committee on National Legislation [27], which maintains the largest peace lobby in Washington, says that "more troops won't bring more peace in Afghanistan. Instead, the U.S. should invest in long-term diplomacy and development assistance."

United for Peace and Justice [28], of which both Peace Action and FCNL are member groups, is organizing coordinated local actions on April 6-9 to pressure Congress to oppose the Afghanistan escalation.

But Stauber's broad point is an important one.

There is significant discomfort with the expansion of the U.S. presence in Afghanistan, and opposition has been expressed by political leaders abroad and at home (including Democrats and Republicans in Congress). This is a time when genuine anti-war groups could be expected to harness that discomfort and build a stronger movement to shift U.S. policy.

As such, it is a time of testing for organizations that came to prominence opposing not just George Bush and Dick Cheney but the wrongheaded war-making of the White House -- no matter which party happened to occupy the Oval Office. And that makes Stauber's J'accuse a particularly stinging one.

© 2009 The Nation

John Nichols is Washington correspondent for The Nation and associate editor of The Capital Times in Madison, Wisconsin. A co-founder of the media reform organization Free Press, Nichols is is co-author with Robert W. McChesney of Tragedy & Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy [29] - from The New Press. Nichols' latest book is The Genius of Impeachment: The Founders' Cure for Royalism. [30]

Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at] verizon.net


"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs


Obama's Domino Theory

Published on Monday, March 30, 2009 by Salon.com

Obama's Domino Theory

by Juan Cole

President Barack Obama may or may not be doing the right thing in Afghanistan, but the rationale he gave for it on Friday is almost certainly wrong. Obama has presented us with a 21st century version of the domino theory. The U.S. is not, contrary to what the president said, mainly fighting "al-Qaida" in Afghanistan. In blaming everything on al-Qaida, Obama broke with his pledge of straight talk to the public and fell back on Bush-style boogeymen and implausible conspiracy theories.

Obama realizes that after seven years, Afghanistan war fatigue has begun to set in with the American people. Some 51 percent of Americans [1] now oppose the Afghanistan war, and 64 percent of Democrats do. The president is therefore escalating in the teeth of substantial domestic opposition, especially from his own party, as voters worry about spending billions more dollars abroad while the U.S. economy is in serious trouble.

He acknowledged that we deserve a "straightforward answer" as to why the U.S. and NATO are still fighting there. "So let me be clear," he said, "Al-Qaida and its allies -- the terrorists who planned and supported the 9/11 attacks -- are in Pakistan and Afghanistan." But his characterization of what is going on now in Afghanistan, almost eight years after 9/11, was simply not true, and was, indeed, positively misleading. "And if the Afghan government falls to the Taliban," he said, "or allows al-Qaida to go unchallenged -- that country will again be a base for terrorists who want to kill as many of our people as they possibly can."

Obama described the same sort of domino effect that Washington elites used to ascribe to international communism. In the updated, al-Qaida version, the Taliban might take Kunar Province, and then all of Afghanistan, and might again host al-Qaida, and might then threaten the shores of the United States. He even managed to add an analog to Cambodia to the scenario, saying, "The future of Afghanistan is inextricably linked to the future of its neighbor, Pakistan," and warned, "Make no mistake: Al-Qaida and its extremist allies are a cancer that risks killing Pakistan from within."

This latter-day domino theory of al-Qaida takeovers in South Asia is just as implausible as its earlier iteration in Southeast Asia (ask Thailand or the Philippines). Most of the allegations are not true or are vastly exaggerated. There are very few al-Qaida fighters based in Afghanistan proper. What is being called the "Taliban" is mostly not Taliban at all [2] (in the sense of seminary graduates loyal to Mullah Omar). The groups being branded "Taliban" only have substantial influence in 8 to 10 percent of Afghanistan, and only 4 percent of Afghans say they support them [3]. Some 58 percent of Afghans say that a return of the Taliban is the biggest threat to their country, but almost no one expects it to happen. Moreover, with regard to Pakistan, there is no danger of militants based in the remote Federally Administered Tribal Areas (FATA) taking over that country or "killing" it.

The Kabul government is not on the verge of falling to the Taliban. The Afghan government has 80,000 troops, who benefit from close U.S. air support, and the total number of Taliban fighters in the Pashtun provinces is estimated at 10,000 to 15,000 [4]. Kabul is in danger of losing control of some villages in the provinces to dissident Pashtun warlords styled "Taliban," though it is not clear why the new Afghan army could not expel them if they did so. A smaller, poorly equipped Northern Alliance army defeated 60,000 Taliban with U.S. air support in 2001. And there is no prospect of "al-Qaida" reestablishing bases in Afghanistan from which it could attack the United States. If al-Qaida did come back to Afghanistan, it could simply be bombed and would be attacked by the new Afghan army.

While the emergence of "Pakistani Taliban" in the Federally Administered Tribal Areas is a blow to Pakistan's security, they have just been defeated in one of the seven major tribal agencies, Bajaur [5], by a concerted and months-long campaign of the highly professional and well-equipped Pakistani army. United States Secretary of Defense Robert Gates replied last summer to the idea that al-Qaida is regrouping in Pakistan [6] and forms a new and vital threat to the West: "Actually, I don't agree with that assessment, because when al-Qaida was in Afghanistan, they had the partnership of a government. They had ready access to international communications, ready access to travel, and so on. Their circumstances in the FATA (Federally Administered Tribal Areas) and on the Pakistani side of the border are much more primitive. And it's much more difficult for them to move around, much more difficult for them to communicate."

As for a threat to Pakistan, the FATA areas are smaller than Connecticut, with a total population of a little over 3 million, while Pakistan itself is bigger than Texas, with a population more than half that of the entire United States. A few thousand Pashtun tribesmen cannot take over Pakistan, nor can they "kill" it. The Pakistani public just forced a military dictator out of office and forced the reinstatement of the Supreme Court, which oversees secular law. Over three-quarters of Pakistanis said in a poll last summer that they had an unfavorable view of the Taliban, and a recent poll found that 90 percent of them worried about terrorism [7]. To be sure, Pakistanis are on the whole highly opposed to the U.S. military presence in the region, and most outside the tribal areas object to U.S. Predator drone strikes on Pakistani territory [8]. The danger is that the U.S. strikes may make the radicals seem victims of Western imperialism and so sympathetic to the Pakistani public.

Obama's dark vision of the overthrow of the Afghanistan government by al-Qaida-linked Taliban or the "killing" of Pakistan by small tribal groups differs little from the equally apocalyptic and implausible warnings issued by John McCain and Dick Cheney about an "al-Qaida" victory in Iraq. Ominously, the president's views are contradicted by those of his own secretary of defense. Pashtun tribes in northwestern Pakistan and southern Afghanistan have a long history of dissidence, feuding and rebellion, which is now being branded Talibanism and configured as a dire menace to the Western way of life. Obama has added yet another domino theory to the history of Washington's justifications for massive military interventions in Asia. When a policymaker gets the rationale for action wrong, he is at particular risk of falling into mission creep and stubborn commitment to a doomed and unnecessary enterprise.

© 2009 Salon.com

Juan Cole teaches Middle Eastern and South Asian history at the University of Michigan. His most recent book Napoleon's Egypt: Invading the Middle East [9] (New York: Palgrave Macmillan, 2007) has just been published. He has appeared widely on television, radio and on op-ed pages as a commentator on Middle East affairs, and has a regular column at Salon.com. He has written, edited, or translated 14 books and has authored 60 journal articles. His weblog on the contemporary Middle East is Informed Comment [10].

Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at] verizon.net


"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs


Monday, March 30, 2009

Khmer Rouge Trials May Expose US, China

Published on Monday, March 30, 2009 by Inter Press Service

Khmer Rouge Trials May Expose US, China

by Marwaan Macan-Markarq

PHNOM PENH, Mar 30 - Limits placed on a United Nations-backed war crimes tribunal in prosecuting surviving leaders of the genocidal Khmer Rouge regime may not prevent revelations about international actors linked to Cambodia's dark period.

It ranges from the period of Khmer Rouge history that the court will consider, a geographic limit to account for only atrocities committed by Cambodian nationals, and who among the surviving Khmer Rouge leadership can be hauled before the tribunal of foreign and local jurists.

[Tourists visit the Choeung Ek Genocidal Centre built on the site of Cambodia's infamous 'Killing Fields'. The Khmer Rouge regime's prison chief Kaing Guek Eav -- better known as Duch -- has finally stood trial for Cambodia's "Killing Fields" atrocities. Duch is accused of overseeing the torture and execution of 15,000 people three decades ago. (AFP/File/Voishmel)]Tourists visit the Choeung Ek Genocidal Centre built on the site of Cambodia's infamous 'Killing Fields'. The Khmer Rouge regime's prison chief Kaing Guek Eav -- better known as Duch -- has finally stood trial for Cambodia's "Killing Fields" atrocities. Duch is accused of overseeing the torture and execution of 15,000 people three decades ago. (AFP/File/Voishmel)

Already, Noam Chomsky, linguist and trenchant critic of Washington's foreign policy has fired a salvo ahead the opening session of the Extraordinary Chambers in the Courts of Cambodia (ECCC), as the tribunal is formally known.

On Monday, Kaing Khek Eav, or ‘Duch,' took the stand at the ECCC to mark the beginning of the tribunal, which comes 30 years after the extremist Maoist group was driven out of power by Vietnamese troops.

Duch was the chief jailor of Tuol Sleng, a former high school in the Cambodian capital, which became the largest detention and torture centre of the Khmer Rouge.

Between 12,380 to 14,000 men, women and children were tortured and then killed under Duch's watch. Many victims were accused of having links with the U.S. spy agency, the Central Intelligence Agency (CIA). Only 11 people survived.

In all, the Khmer Rouge was responsible for the deaths of 1.7 million people, nearly a quarter of the country's population at that time, as they sought, between April 1975 and June 1979, to create an agrarian utopia.

But, as Chomsky asserts in the ‘Phnom Penh Post', an English-language daily, the Khmer Rouge's brutality against fellow Cambodia citizens did not emerge out of a political vacuum.

Chomsky points a finger at leading figures of the U.S. political establishment like Henry Kissinger, a member of the late president Richard Nixon's administration, who should also be held accountable for creating the conditions that paved the way for the rise the Khmer Rouge.

‘'It (the trial) shouldn't be limited to the Cambodians,'' says Chomsky in an interview that appeared on the weekend. ‘'An international trial that doesn't take into account Henry Kissinger or other authors of the American bombings and the support of the KR (Khmer Rouge) after they were kicked out of the country, that's just a farce.''

‘'The records say that the US wanted to ‘use anything that flies against anything that moves' (during the bombing of Cambodia), which led to five times the bombing that was reported before, greater that all bombings in all theatres of World War Two, which helped create the Khmer Rouge,'' he asserted.

Washington began flying sorties over Cambodia in the mid-1960s to crush parts of the country being used by North Vietnamese troops. These bombing raids using B-52 planes were kept a secret from the U.S. public for years.

During the Nixon years, from 1969 to 1973, an estimated 500,000 bombs were dropped, resulting in the deaths of close to 600,000 Cambodian men, women and children.

But the relatives of these victims will not have their day in tribunals such as the ECCC.

It stems from the limit of ‘'territorial jurisdiction'' and ‘'temporal jurisdiction'' written into the language of the laws to establish the special tribunal.

Washington, in fact, had a role in a placing such limits on how far across geography and time the war crimes tribunal could reach when a law to deal with the genocide in Cambodia was being shaped in the early 1990s.

‘'It is the policy of the United States to support efforts to bring to justice members of the Khmer Rouge for their crimes against humanity committed in Cambodia between April 17, 1975 and January 7, 1979,'' Washington declared at the time as it threw its weight behind the effort to investigate a grisly period of Cambodia's past.

China, however, may have more to worry, given its direct role in assisting the Khmer Rouge during the period the ECCC is examining. Beijing reportedly pumped in a billion U.S. dollars to help the Khmer Rouge, in addition to providing other material and diplomatic support.

The Asian giant wanted to draw Cambodia into its orbit to counter the growing influence of its communist adversary, the Soviet Union, and its Vietnamese ally.

The current Cambodian government of Prime Minister Hun Sen, in fact, has grown nervous about the prospect of Beijing's role during the Khmer Rouge genocide surfacing during the trial. After all, China has emerged as a dominant economic player, investing nearly 1.5 billion US dollars in 2007.

‘'The government would like to keep China's name out of the trial. It does not want to upset the good relations between the two countries,'' a highly-placed Cambodian official told IPS on condition of anonymity. ‘'What happened then was Cold War politics. But we have moved on; we have mended fences.''

Hun Sen, himself, hopes to benefit from an initial decision by the ECCC to prosecute Duch and four other surviving leaders of the Khmer Rouge. Such a limit will ensure that he and other senior members of his government who held roles of commanders or ranked as officials in the Khmer Rouge regime will not have to account for their role in the genocide.

‘'Many more people need to face the court to really deliver justice to the millions of victims of these horrific crimes,'' says Brittis Edman, Cambodia researcher for the rights watchdog Amnesty International. ‘'The Extraordinary Chambers must urgently expand its prosecution strategy to investigate and prosecute more cases before it is too late.''

Copyright © 2009 IPS-Inter Press Service


Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at] verizon.net


"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs


A Brave Man Who Stood Alone. If Only the World Had Listened to Him

Published on Monday, March 30, 2009 by the Independent/UK

A Brave Man Who Stood Alone. If Only the World Had Listened to Him

by Robert Fisk

I don't know if I met Tom Hurndall. He was one of a bunch of "human shields" who turned up in Baghdad just before the Anglo-American invasion in 2003, the kind of folk we professional reporters make fun of. Tree huggers, that kind of thing. Now I wish I had met him because - looking back over the history of that terrible war - Hurndall's journals (soon to be published) show a remarkable man of remarkable principle. "I may not be a human shield," he wrote at 10.26 on 17 March from his Amman hotel. "And I may not adhere to the beliefs of those I have travelled with, but the way Britain and America plan to take Iraq is unnecessary and puts soldiers' lives above those of civilians. For that I hope that Bush and Blair stand trial for war crimes."

Hurndall got it about right, didn't he? It wasn't so simple as war/no war, black and white, he wrote. "Things I've heard and seen over the last few weeks proves what I already knew; neither the Iraqi regime, nor the American or British, are clean. Maybe Saddam needs to go but ... the air war that's proposed is largely unnecessary and doesn't discriminate between civilians and armed soldiers. Tens of thousands will die, maybe hundreds of thousands, just to save thousands of American soldiers having to fight honestly, hand to hand. It is wrong." Oh, how many of my professional colleagues wrote like this on the eve of war? Not many.

We pooh-poohed the Hurndalls and their friends as groupies even when they did briefly enter the South Baghdad electricity station and met one engineer, Attiah Bakir, who had been horrifyingly wounded 11 years earlier when an American bomb blew a fragment of metal into his brain. "You can see now where it struck," Hurndall wrote in an email from Baghdad, "caving in the central third of his forehead and removing the bone totally. Above the bridge of his broken nose, there is only a cavity with scarred skin covering the prominent gap..."

A picture of Attiah Bakir stares out of the book, a distinguished, brave man who refused to leave his place of work as the next war approached. He was silenced only when one of Hurndall's friends made the mistake of asking what he thought of Saddam's government. I cringed for the poor man. "Minders" were everywhere in those early days. Talking to any civilian was almost criminally foolish. Iraqis were forbidden from talking to foreigners. Hence all those bloody "minders" (many of whom, of course, ended up working for Baghdad journalists after Saddam's overthrow).

Hurndall had a dispassionate eye. "Nowhere in the world have I ever seen so many stars as now in the western deserts of Iraq," he wrote on 22 February. "How can somewhere so beautiful be so wrought with terror and war as it is soon to be?" In answer to the questions asked of them by the BBC, ITV, WBO, CNN, al-Jazeera and others, Hurndall had no single reply. "I don't think there could be one, two or 100 responses," he wrote. "To each of us our own, but not one of us wants to die." Prophetic words for Tom to have written.

You can see him smiling selflessly in several snapshots. He went to cover the refugee complex at Al-Rowaishid and moved inexorably towards Gaza where he was confronted by the massive tragedy of the Palestinians. "I woke up at about eight in my bed in Jerusalem and lay in until 9.30," he wrote. "We left at 10.00... Since then, I have been shot at, gassed, chased by soldiers, had sound grenades thrown within metres of me, been hit by falling debris..."

Hurndall was trying to save Palestinian homes and infrastructure but frequently came under Israeli fire and seemed to have lost his fear of death. "While approaching the area, they (the Israelis) continually fired one- to two-second bursts from what I could see was a Bradley fighting vehicle... It was strange that as we approached and the guns were firing, it sent shivers down my spine, but nothing more than that. We walked down the middle of the street, wearing bright orange, and one of us shouted through a loudspeaker, 'We are International volunteers. Don't shoot!' That was followed by another volley of fire, though I can't be sure where from..."

Tom Hurndall had stayed in Rafah. He was only 21 where - in his mother's words - he lost his life through a single, selfless, human act. "Tom was shot in the head as he carried a single Palestinian child out of the range of an Israeli army sniper." Mrs Hurndall asked me to write a preface to Tom's book and this article is his preface, for a brave man who stood alone and showed more courage than most if us dreamed of. Forget tree huggers. Hurndall was one good man and true.

© 2009 The Independent

Robert Fisk is Middle East correspondent for The Independent newspaper.  He is the author of many books on the region, including The Great War for Civilisation: The Conquest of the Middle East [1]

Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at] verizon.net


"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs


Give CEO Pay the Pink Slip

Give CEO Pay the Pink Slip


     Capping outsized salaries is the first step toward

     creating responsible corporations.


By David Moberg

March 23, 2009



Nearly everyone is angry about excessive corporate

executive pay these days, from laid-off autoworkers and

foreclosed homeowners to former Federal Reserve

Chairman Paul Volcker.


At the seven biggest financial firms that have recently

failed, been sold or been bailed out, top executives

have received $464 million in "performance pay" since

2005. And these are the same people who helped create

the conditions that led to the worldwide crash. For

example, in December 2008, Merrill Lynch CEO John

Thain-paid $83 million in 2007-gave out $3.6 billion in

early executive bonuses before his firm was taken over

by Bank of America, which has received $45 billion in

federal bailout money.


In February, in discussing the $500,000 salary cap with

limitations on golden parachutes, Obama said, "What

gets people upset-and rightfully so-are executives

being rewarded for failure. Especially when those

rewards are subsidized by U.S. taxpayers."


In 1980, CEOs at Fortune 500 firms were paid 42 times

the average worker's salary. By 2007, they were being

paid on average 364 times as much.


During the most recent expansion from 2002 to 2006, for

example, the top 1 percent of taxpayers took three-

fourths of all income growth, according to University

of California-Berkeley economist Emmanuel Saez. And

much of it, he says, was due to "an explosion of top

wages and salaries."


Apologists for CEOs argue that companies bid up

salaries to get the best executives, who then boost

profits and stock value. The cult of the heroic

executive imagines that these Lone Rangers solely

determine how fast and profitably a firm grows, not the

thousands of workers-from secretaries to engineers-

doing their daily jobs.


But the differences in performance among executives are

tiny-merely 0.016 percent between the performance of

the top CEO and the 250th ranked, according to

economists Xavier Gabaix of the Massachusetts Institute

of Technology and Augustin Landier of New York University.


Gabaix and Landier claim the sixfold growth of CEO pay

from 1980 to 2003 tracks the growth of corporate stock

market value. But Princeton economist Uwe Reinhardt

argues that most of this growth simply reflected the

now-deflated general stock market boom, not the

uniquely valuable talents of highly paid CEOs.


Indeed, scads of CEOs, like Robert Nardelli of Home

Depot, reaped riches as their companies floundered. And

overseas, CEOs of large, successful companies typically

earn much less. From 2004-2006, top European CEOs

received less than half of the $13.3 million that their

American counterparts made, on average; top Japanese

CEOs received only $1.5 million.


Supersized pay


The meltdown in the financial sector demonstrates that

these executives had a talent not for strengthening

their companies but for enriching themselves. And the

public bank bailout has given legitimacy to demands

that CEO pay be limited, as Obama modestly proposed for

executives of companies that get federal help in the future.


But the public has a legitimate interest in all

corporations and how much they pay executives, not just

those it bails out. Government created and granted

rights to corporations to serve the public interest,

and government regulates corporate behavior when it

affects the public, such as securities or environmental

regulation. Why not CEO pay?


Many corporations rely on government contracts or

financial assistance, and taxpayers provide $20 billion

a year in direct tax subsidies for excessive executive

pay, according to a 2008 study from the Institute for

Policy Studies (IPS) and United for a Fair Economy (UFFE).


"Average U.S. taxpayers subsidize excessive

compensation-by more than $20 billion per year," the

report says, "via a variety of tax and accounting

loopholes. That $20 billion for America's most powerful

is more than double what the federal government spent

last year on educating America's most vulnerable-

children with disabilities."


Supersized executive pay, especially in its typical

form, is also a costly burden that distorts the economy

away from the common good. It is a symptom of deeper

problems with the way corporations and the economy are

organized and regulated, argues AFL-CIO chief economist

Ron Blackwell.


The foul smell of excess


In theory, corporations pay CEOs the stock options and

other bonuses beyond their ample salaries to make sure

that they have incentives to maximize shareholder

value. But the system is rigged. Company managers

effectively control corporate boards and are in

collusion with the boards compensation advisers, says

Harvard Law professor Lucian Bebchuck.


Society pays a high price for high salaries.


High executive pay contributes to rising inequality.

The payouts for the top five executives at a typical

corporation consume about 10 percent of aggregate

corporate profits, according to Bebchuck. And at non-

union companies, where wages are depressed, the CEOs

make 20 percent more than at unionized companies,

according to a 2007 survey published in the Journal of

Labor Research.


Inequality takes its toll in many ways. It pushed most

Americans deeper into debt as they tried to maintain

living standards with stagnant incomes, thus weakening

consumer demand as a prop for the economy. And it

encouraged the rich to speculate. Consumer markets

diverged to extremes: Wal-Marts with low-priced imports

and luxury boutiques.


Growing inequality in a society increases illness and

mortality among the less well off. It creates stress

for individuals and tensions for society, thus

undermining the ability of the nation to tackle major

social issues-especially when inequality increases the

political power of the wealthy.


And within a company, inequality undermines teamwork.

As a result, argues New York University economics

professor Edward Wolff, productivity is depressed, and

firms invest less in human capital, or education and

skills. That's why the late management theorist Peter

Drucker persistently argued that CEO pay should be no

more than 25 times the average worker's salary.


High executive compensation, especially stock options

and bonuses, lead CEOs to take a short-term

perspective, concludes Bebchuck. It gives them an

incentive to quickly boost stock prices through tactics

such as outsourcing, layoffs, research cutbacks,

shortsighted sales or acquisitions of assets, and

financial manipulation. At financial firms, executives

sought riskier, higher-yield investments.


"The current economic crisis is a direct outcome of the

compensation system," Wolff says.


The compensation system encourages executives to focus

on extracting wealth from the rest of the economy, not

creating social wealth for the long haul. It distorts

the economy, diverting talent from productive to

unproductive work: the mathematicians and physicists

lured into investment banking could have been working

more usefully on research, such as helping build a

sustainable energy economy.


As the late economist David Gordon argued, American

corporations are less competitive and less productive

than their European and Japanese counterparts due to

the burden of an oversized corporate bureaucracy. That

bureaucracy reflects a corporate strategy of treating

workers as costs to be controlled, not essential

contributors to corporate success.


Josh Bivens, an economist at the progressive Economic

Policy Institute, argues in a new study that unions and

blue-collar wages are not hurting U.S. manufacturing,

but high corporate salaries are (along with an

overvalued currency and dysfunctional healthcare



A new corporate contract


Giving shareholders more control of CEO pay would help,

but the public-not just shareholders-has a stake in

these decisions. Imposing pay caps-on all executives,

not only those at bailed-out firms-would be better.

Making the income tax much more progressive than Obama

would do with his modest, if welcome, tax reforms is

also necessary.


But as Blackwell argues, controlling salaries alone

will not fix the underlying problems with the corporate

system. We need, he says, to create a new legal and

regulatory system that aligns corporations with social



The new corporate accountability, Blackwell says,

should involve requiring boards of directors to include

major stakeholders - workers, government and

communities; instituting collective bargaining laws

that shift the balance of power between workers and

managers; and creating a public expectation of ethical

and socially responsible behavior.


The economic crisis, and the furor over executive pay

and behavior, provides us with an opportunity not just

to rein in ridiculous CEO compensation but also to re-

make the corporate system.


As Wolff says, beyond controlling pay, "a new kind of

corporation has to evolve."


[Editor's clarification: Thain's office notes that his

2007 income included $68 million in stock options,

which he was unable to exercise because the stock price

did not rise to levels designated in his compensation

agreement, but obviously fell instead.]