Thursday, March 30, 2006


You know you want to. So did Keynes.

This new paper details the costs of extravagant CEO luxuries:

Yermack, David. 2006. "Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns." Journal of Financial Economics. Vol. 80, no. 1, pp. 211-42.


This paper studies perquisites of CEOs, focusing on personal use of company planes. For firms that have disclosed this managerial benefit, average shareholder returns underperform market benchmarks by more than 4% annually, a severe gap far exceeding the costs of resources consumed. Around the date of the initial disclosure, firms’ stock prices drop by an average of 1.1%. Regression analysis finds no significant associations between CEOs’ perquisites and their compensation or percentage ownership, but variables related to personal CEO characteristics, especially long-distance golf club memberships, have significant explanatory power for personal aircraft use.

Not only are CEOs laying off workers and slashing health care and pensions so they can have company cash to pay for golf vacations, but they are screwing share owners to do it. Clearly free flights on the company jet don't work as efficiency wages. Long live the principle-agent problem.

Friday, March 24, 2006


The recognition it deserves.

But don't wait til ya get to Memphis: take the virtual tour right now, or check out the live web cams for up to the minute Graceland-i-ness.

Monday, March 06, 2006


A little over a week ago I watched Jeff Faux and Gene Sperling "debate" their new books and their views on progressive politics and policy.

The debate itself sparked some debate. Limousine liberal Matthew Yglesias doesn't see what all the hubbub is about:

But even if the disagreement is relevant, it's just not all that significant relative to the very large range of things they agree about.

Josh Bivens, from the Faux home team, does a nice job teasing out some of the differences between the two positions.

I maintain there is a very big difference: it's the class war, stupid! (Part I here) And it's not too surprising that bourgeois liberals don't get it.

There is a huge fracture between elites who reign over Democratic policy agenda-setting and those who are, once were, or should be natural Democratic constituents: that fracture is class (and often race and gender, to boot). Let's be clear: we face a class-based political agenda to liberate capital from any kind of social control and to muster the power of the American Empire toward recasting social relations in capital's favor on a global scale.

Sperling's "progressive" view, and much of his substance in the aforementioned debate, consists of technocratic fixes around the fringes of the problems created by the liberal (in the classical laissez-faire sense) global capitalism he simultaneously champions. Yglesias is right, both Faux and Sperling are for single payer national health care. But when Sperling and the Clinton administration had its revolutionary moment shortly after the 1992 election, they opted to table the national health care agenda in favor of passing NAFTA--a policy agenda conceived from the quixotic dreams of class warrior Ronald Reagan and negotiated by class warrior George Bush Sr. (And yet remarkably Sperling was so indignant when defending Clinton's health care abdication?!?). So we see to which class the Clintonistas gave priority.

We know class is there, but it is bad manners to talk about it in public, and a particularly embarrassing topic to raise with one's friends and peers on the squash court, or wheverever else we bourgeois congregate. This is the basic message of the rather uninsightful book review by Michael Hirsh, Newsweek's Washington Bureau Chief, in last Sunday's NYT:

Faux is clearly correct that the balance of power between labor and capital has shifted dramatically...the growing power of capital explains many of the economic stories of our day...Faux's descriptions are often sound, but his criticisms are frequently shrill and overdrawn.

So we know class is at the core of these issues, but jeeze, Jeff, do you have to be so shrill about it? Can't we just keep these discusssions quiet and within our own kind?

Yes. No. Without class conscious politics we lose and have been losing since Reagan and Thatcher came on the scene. While we did have two terms of Clinton presidency--thanks largely to the isolationist-populism of third party candidates who split the right--in restrospect those may have been pyrrhic victories for the vehemence with which his administration apparatchiks, unwittingly or not, bore the torch of class warfare.

The difference between Republicans and bourgeois liberals is that the latter may actually feel a tinge of guilt for the undue privilege our class system bestows upon them (Republicans amazingly believe they are somehow deserving of such privilege). From time to time, bourgeois liberals may even feel guilty enough to lament the injustice of the class system, racism, sexism, and so on. If it gets really bad, they may even support changing the class system a little so they can once again enjoy their privilege guilt-free.