NOTE: I am copying sixteen essays from my old blog ("Random Notes") to this blog. Some are cited in other essays, but most are simply essays that struck me as interesting while I was going through my search for essays to fix broken links.
I find that as a people, Americans are susceptible to a few particularly bad arguments, and that these arguments have not only been exploited by those who wish to push an agenda, but also have managed to mislead those who would otherwise govern based on principle. In other words, certain arguments don't only exploit our emotional predispositions, but our exposure to those arguments have then led us into making certain incorrect assumptions.
For example, a combination of a sense of fair play and a must less noble envy of those who have more than we do often makes us susceptible to populist rabble rousers who argue against those who got rich "unfairly". Perhaps the best recent example being the many arguments against CEOs receiving "unconscionable" salaries while their companies lose money, or, even more popularly, the argument that CEOs of companies receiving federal funds should not be paid "outrageous" salaries and benefits.
At first glance, this is nothing more than the usual populist rhetoric, the outcry against the rich who get richer while the "little guy" suffers. But, it goes beyond that. Having heard the argument over and over, not only has it been popularized on the left, but many on the right have bought into it, arguing that there should be limits on companies which receive federal funds, and a few even going so far as to call for some sort of federal regulation of salaries.
But, the whole argument is nonsense.I have written about it many times ("A Really Foolish Idea", "Greed", "Greed Part 2", "A Little More On CEO Salaries", "Pointless or Destructive", "Another Bad Idea", "Crippling Business", "AIG Absurdities", "AIG Nonsense", "Living Large During the Good Times"), usually using baseball as an analogy. And it is perhaps the easiest analogy to understand. For example, if your team has a man batting 0.400, yet continues to lose, should he have his salary docked, and risk him going to another team, simply because the team is losing? Or, if a team is losing, should they be prevented from hiring a 0.400 batter because his salary is too high?
The point being, these companies are in trouble. They need the best managers to salvage them, and so they have to be able to pay top dollar to get them. Especially in the case of firms getting federal money, thanks to all the headaches of possible federal intervention, pay will need to be even higher to compensate for those annoyances. Nor do we know that CEOs of failing firms did not earn their money. Maybe a CEO earned $100 million when his firm lost $500 million, but perhaps without him the firm would have lost $2 billion, or gone under entirely, and thus he made much more money than he cost. We simply do not know enough to know whether the firm should pay as much s they do or not.
Nor should we care. The real point is, who cares what a firm pays its CEO? Only the shareholders should care, as it is their money. Yes, when the federal government bails out a firm that confuses things, but that is an argument against bailing out firms, rather than for regulating private decisions inside business.
But, of course, the CEO argument is not really about the worth of the CEO or whether his compensation is fair. The argument, backed by a combination of unspoken envy and lurid tales of corporate "excess", is that CEOs are NEVER worth what they are paid, that bosses effectively are parasites who do nothing, and so they are always overpaid. No one will say as much, but it is implicit in the argument, and, sadly has been accepted by the left and many on the right.
Nor is this the only argument. Time and again, we hear arguments for various measures based on "greedy speculators", "Wall Street greed", " "heartless multinational corporations" and so on. (Eg. "Authoritarian Oil Talk", "Preexisting Conditions") Over and over the argument basically amounts to "this guy is so bad, how can you defend him?" It is the same argument that tries to invalidate free speech by attacking racists ("The Danger Inherent in Banning "Bad Ideas""), or violates individual rights by attacking drug dealers and prostitutes. For that matter, it is the argument that tries to invalidate states' rights by tying them to the KKK. Once someone can find a villain to attach to a cause, he can assume the public outrage will make his case for him.
And sadly, many on the right go for it. Having been told we are heartless, unfeeling, and just don't care, we have turned into the opposite, so concerned about seeming compassionate that we will go beyond the left in showing we care. Now we cannot find enough popular causes to latch onto. Rather than principles, we have become the party of compassion, the Democrats Lite.
Which is a horrible position to take. For many reasons. First, as I have argued over and over, the "compassionate" position actually does more harm than good, both through destroying predictability and through enshrining elitism and arbitrary rule ( "Deadly Cynicism", "The Inherent Disappointment of Authoritarianism", "Utopianism and Disaster"). Second, despite the claims that the free market is "unfeeling", it is that lack of feeling which makes it so beneficial. Without the need to win over some arbitrary ruler, the free market allows each man to make his own fortune. In short, it is the most compassionate and fair system. ("Greed Versus Evil", "Planning For Imperfection", "The Triumph of Good", "Fairness and the Free Market")
But, somehow, we have forgotten all that, or can no longer give it voice. And so, we listen to the arguments of the left and take them to heart. Instead of defending principles, and risking being associated with "bad guys", we turn on the villain du jour along with the left, and concede their arguments.("Why We Lose", "The Difficulty of Principle", "Don't Blame the Politicians", "What We Deserve", "Who Is To Blame?", "What is Wrong with Us", "The Single Greatest Weakness")
And then we wonder why they always seem to be so far ahead of us.
Originally posted in Random Notes on 2010/03/17.