Current Commentary
All-American arrogance
By John Armor
HIGHLANDS, N.C. (UPI) No, this is
not about the Iraq War, or the post-war reconstruction of Iraq,
or the French view of America's position in the world. It's about
a single bad decision by the top officers of the world's largest
airline, American Airlines that will probably dump that carrier
into bankruptcy. This decision goes beyond wrong, beyond greed,
all the way to world-class stupidity. The reason behind it applies
in many areas of American life.
To set the stage: When times were fat for the airline industry,
American signed fat contracts with the various unions of its employees.
Now that times are slim (for every airline except Southwest),
American's cash is bleeding dry at a rapid rate. The airline decided,
rightly, that it had two choices either seek major concessions
from its unions, or go bankrupt.
So American apparently placed its cards on the table, and asked for a total of $1.8 billion in payroll concessions from its three major unions, the transport workers, the pilots and the flight attendants. Initially, the first two unions agreed but the third one narrowly rejected the plan. Then the flight attendants agreed to vote again, and it looked like American would escape the financial woods in the nick of time.
Meanwhile, American was required to file a regular report to the Securities and Exchange Commission. One of the mandatory parts of this filing was a description of "Executive Compensation." American asked for an extension on the filing date of this report, perhaps not coincidentally to the very day that the unions were asked to confirm their decisions on the $1.8 billion givebacks in employee compensation. Buried in the fine print of that SEC filing were the details of corporate guarantees for pension trust funds and retention bonuses for seven top executives of American Airlines' parent company.
I do not know the salaries of those top seven executives, but based on the size of the corporation and similar salaries in other corporations, they are probably in the $2-to-$5 million range. What is the personal value of a multi-million-dollar salary? To an ordinary American, such amounts are beyond comprehension. They are far larger than necessary to keep a roof over your head, food on the table, and a car in the driveway, provide for medical care, education, retirement, etc. As Art Linkletter once remarked, "Beyond a certain point, the only purpose of money is to keep score."
The seven top executives, led by President
Donald J. McCarty of AMR Corp. (the parent company), were trying
to fatten their bank accounts by a few surreptitious extra millions.
At the same time, they were asking the rank-and-file workers at
American to take pay cuts of up to 20 percent each. But the story
gets worse than that.
When the Wall Street Journal broke the story of the quiet benefits
for the seven executives, a company spokesman claimed the presidents
of the unions had been briefed on "all the details"
of these executive compensation wrinkles. Later McCarty admitted
the union officials had not been informed of these details, and
apologized for "whatever harm may have been caused."
The original corporate statement made a bad situation even worse. In effect, it accused the union presidents of misleading their own workers, by knowing about the executive compensation but not mentioning it. That was false. In the immortal word used by Ron Nessen about a statement by President Nixon, the first statement was "inoperative." The union presidents are, of course, furious. All three were talking about revotes to revoke their concessions. The result could have been bankruptcy for American Airlines.
McCarty has now fallen on his sword, and resigned as president in an effort to assuage the unions and keep American out of bankruptcy. But the other six executives slated for bonuses, remain in place. So do the board members who voted for the executive benefits. The McCarty resignation, a token for the unions, was sufficient to prevent the bankruptcy.
What is going on here? Is this greed gone wild? No, it is deeper and worse than that. It is all-American arrogance. It is a group of people at the top of the heap deciding that they are so big and powerful that they do not have to abide by the kind of rules that apply to the "little people." This happens in many parts of American society, and not just over money.
Leona Helmsley went to jail for tax fraud concerning her use of the funds of Helmsley Hotels as her private slush fund. One of the enduring quotes from her trial was her comment to one of her servants, "Only little people pay taxes." Again, she not only thought she could get away with it, she thought she should.
All-American arrogance.
Or, consider Tim Robbins' bitter speech before the National Press Club in Washington a week ago that he was being punished for his anti-war views, and that "a chill wind was blowing" in America. Of course, Tim Robbins is entitled to freedom of speech. As a First Amendment lawyer, I would be the first to defend his right. But implicit in his speech was the idea that the "little people" do not have freedom of speech.
No one would come if the "little people" held a press conference. No one would quote them if they issued a press release. The "little people" have only one way to speak to someone whose career depends on their dollars. They can choose whether to buy movie tickets. They can choose whether to buy CDs and DVDs. Only in that way can their voices be heard.
Tim Robbins was guilty of all-American arrogance. And to their discredit, the assembled reporters at the Press Club did not call him on it.
Or consider the various corporate executives now going to trial for assorted misdeeds prior to, and related to, the collapse of the stock markets. Their first defense is that they are so rich and powerful that they should not be found guilty. Failing that, the second defense is that they are so rich and powerful they should receive light sentences.
Most of them, and their lawyers, will assiduously avoid the incredible bad timing of the president of AMR Corp. Most of them will refrain from any in-your-face quotes like Leona Helmsley's statement. But the message is still the same. The rules that apply to the "little people" don't apply to us.
All-American arrogance.
The "little people" in America know how to live their lives properly. Work hard. Keep your nose clean. Get the facts straight and make solid decisions whether the subject is what to do tomorrow at work, or the most difficult decisions that any adult ever faces, how to raise your teenagers.
Furthermore, the "little people" have good instincts in judging the merits or demerits of public figures and private leaders. I have dealt with the "little people" on juries. I've talked with them as voters. I've worked with them as customers. I count myself a member of that tribe. The "little people" are the backbone of America. We always have been. We always should be.
Whenever you encounter anyone who turns the face of all-American arrogance toward you, reject him, her or them. Do not give them your dollars, your votes, your children to educate, your respect, or your faith. They do not deserve it, and you can find better.
American Airlines has come face-to-face with bankruptcy the old-fashioned way, it earned it. But there are other forms of bankruptcy political, moral, intellectual. And all who are headed down those various paths, also deserve their fates. We can help them get there. It's as American as apple pie.