Heads I Win, Tails You Lose: The Destructiveness of Double Standards
Is anyone else out there getting sick and tired of how – for the last several years – it seems like politicians of both parties are enjoying slamming Corporate America ad nauseum? To some extent, additional oversight was brought on by poor business practices; therefore, increased governance and accountability were in order. However, what is most troubling is that this has become dangerously one-sided. The politicians are making sure they get the appropriate sound bites while they hammer businesses on a daily basis, but they are not holding themselves to the same transparency and accountability standards… which makes no sense if we are all in this together.
Julius Caesar once said:
“Beware the leader who bangs the drums of war in order to whip the citizenry into patriotic fervor, for patriotism is indeed a double-edged sword. It both emboldens the blood, just as it narrows the mind. And when the drums of war have reached a fever pitch and the blood boils with hate and the mind is closed, the leader will have no need in seizing the rights of the citizenry. Rather, the citizenry, infused with fear and blinded by patriotism, will offer up all of their rights unto the leader and gladly so. How do I know? For this is what I have done. And I am Caesar”.
The “drum of war” and “narrowing of the mind” against businesses is not what we need in these tough economic times. Governments do not create jobs; governments are not innovators; governments do not drive capitalism and growth; and governments do not pay taxes for our defense, our infrastructure, and/or our way of life.
According to the 2009 International Money Fund, the U.S. GDP of $14 trillion constitutes 24% of the gross world product1. The United States is the largest importer of goods, and third largest exporter in the world. The U.S. has the highest labor productivity in the world, made up of over 150 million people.
Are businesses perfect? No, but this is no “chicken and egg” debate. Businesses provide the commerce and jobs that sustain the American economy, including the 22 million plus government jobs presently in place. Without jobs and commerce, there is simply no need for the government and no United States of America!
Just saying it makes us proud that out of any place we could have been born, we were born here. At any time we could have been born, we were born now. Virtually every country wants what we have, but we have strayed away from businesses, government, and our military ALL working together toward one common goal – to build, protect, and govern so those of us who live here can dream “what can be”!
We don’t know when this separation began, but it is evident that we have evolved into a day of double standards where our government can hold businesses accountable to one standard, but hold themselves to a different standard.
Interestingly, the term “double standard” is defined as follows:
Any set of principles containing different provisions for one group of people than for another, typically without good reason for having said difference.2
The American people elect these officials and should demand of them that their leadership, governance, and motivation be single-minded and not wrought with a holster full of double standards; especially double standards that could lead to the virtual downfall of the United States.
Understand us, we want good government. This great country was founded on a system of checks and balances – not just in the U. S. Constitution – but also by the pragmatic logic we as Americans, and our founding fathers, have always been known for. However, double standards are a form of biased, morally unfair suspension (toward a certain group) of the principle that all are equal in their freedoms, which is one of the key maxims/reasons for why we want to have elected officials to begin with. In addition, it is important to remember that those that founded this great nation of ours were businessmen first. They understood the importance of both working together for the good of the country, and working together so that all people could have a dream of success by the sweat of their brow, not from government dependency programs.
One area where double standards have reached a fever pitch is in the area of executive pay, which we at Longnecker & Associates know a lot about. Politicians – again of both parties – have been screaming for more pay-for-performance, more accountability, more transparency, and more governance independence for Corporate America. As a matter of fact, on July 21, 2010, President Obama signed the Dodd-Frank Act into U.S. law. While there are numerous financial reform provisions in the Act, executive compensation is a central piece – which is fine, but what we’d like to push forth is that what our elected officials have enacted should apply to them as well – unless they are adverse to more accountability, more transparency, and even more pay-for-performance. If they are so adverse, then they are invoking a double standard – a standard that not any one of them campaigned on while trying to get American votes.
We believe it is time to go to one standard in this area. Specifically:
1. All elected officials should be required to disclose (make transparent) to the American, tax paying public what all the costs are that they incur while on the job. Similar to business executives, they should be required to disclose their base salary, all the perquisites and costs of such afforded the position, and any and all other remuneration they receive. For example, Mrs. Obama flew to Spain with one of her daughters. It is a great perk that past First Ladies have used a well. There should be an accounting though for how much that trip cost in its entirety, just like what is required in Corporate America.
2. We also believe that there should be an independent, non-partisan committee of experts that verifies the remuneration communicated by these politicians but also compares and trends it to past positions, as well as that to that other heads of states so as to ensure we are paying competitively versus excessively (independent governance). This practice could be even used to our advantage to ensure we are doing the best job possible to attract, retain, and motivate the people we need in the public sector.
3. And on the “pay for performance” front, similar to the concept of “clawbacks” in the new Dodd-Frank Act for executives, we should have similar ramifications in place for all elected officials. Specifically, if any elected official’s actions/policies create negative economic results for their constituents, there should be a mechanism in place that “claws back” and gets (at the very least), a portion of their government pension and benefits taken away. Further, depending on the severity of the action/policy, even having compensation already paid/paid back.
If we can have this in place for both corporate America and our elected officials, we believe it will motivate them to work together toward the common good of this country, versus not.
To put this into perspective, one just needs to look at the remuneration afforded the Office of President of any party!
Remuneration for the Office of the President includes, but is not limited to:
- Retirement Perks – pension, relocation, travel expenses, medical, security, etc.
- Salary plus sizeable expense accounts in excess of $500,000 per year.
- Transportation – Air Force One, Marine One, and Limousines, which are used for political purposes, as well as personal. All travel is free. They have a huge fleet at their disposal.
- Camp David – possibly the nicest vacation spot in the United States, 125 acres of wonderful amenities for free.
- The White House – it is reported that the upkeep alone is $4 million per year. There is a bowling alley, putting green, jogging trail, pool, billiards, tennis courts, and a movie theatre, all for free.
- Service Staff – Including but not limited to florists, valets, maids, chefs, butlers, and administrators. The flowers alone are close to $300,000 per year. There can be as many as 200 people of staff, which is a nice-sized company.
- Protection – 24 hours a day while President, and 10 years after he leaves the presidency.
- Presidential Library – typically the official storage facility of all the President’s official documents.
Some estimate the value of the above, including the fact that no tax is paid, at anywhere between $75-85 million! Plus after he or she leaves office, that’s when the REAL money is made which is well known by the President while in office! Speeches and books will provide significant wealth – such that our current President (due to his age, charisma, and connections) may become the FIRST BILLION DOLLAR PRESIDENT!* If he does well for us and our economy, like any other great CEO, this money will be well-deserved. In any event, these tax-free benefits should be calculated and disclosed to the very same degree our government is requiring from businesses.
Don’t be fooled either; being a senator, a congressperson, and even a local elected official can be very lucrative while in office and even more so beyond. We don’t begrudge their job function or responsibilities; we just want a level playing field for all of those that lead this great nation of ours. We just hope and pray that others do too, and that these changes will be part of a brighter and better tomorrow.
*Note: It is believed that Clintons’ total net worth was around $1.5 million before he became President. Eight years after he left, their AFTER-TAX NET WORTH was close to $38 million!3 And this was just Bill Clinton.