‘When did CEOs be­come ma­gi­cians?’

The Washington Post Sunday - - BUSINESS -

Last month, we pub­lished a col­umn by Roger Lowen­stein called “On GE and the myth of the CEO su­per­hero,” which in­spired this let­ter from a reader. Mr. Lowen­stein, I’m old — 74 — and re­mem­ber when busi­nesses ac­tu­ally made some­thing — cars, toys, bed­ding, tools, books, news­pa­pers — but now they don’t seem to do any­thing ex­cept shuf­fle money around, which seems like a kind of shell game to me.

And in­vestors in­vested in com­pa­nies be­cause they be­lieved in the prod­uct and wanted to sup­port it, be a part of it — now they want to milk it dry. They are in­dif­fer­ent to the suc­cess or fail­ure, the con­tin­u­a­tion, of the busi­ness as long as they get money out of it.

The only econ course I’ve ever taken was 101, 55 years ago, but this seems like a deeply, fun­da­men­tally un­sound sys­tem to me, one that is hol­low to the core. Noth­ing is be­ing pro­duced, cre­ated, man­u­fac­tured, noth­ing of value re­sults. When are we go­ing back to pro­duc­ing some­thing that means some­thing to some­body, that some­body cares about, be­sides money for in­vestors, that is?

And when did CEOs be­come ma­gi­cians, or gods who walk on water? There must be some kind of weird, self-serv­ing cor­po­rate culture that sup­ports their ridicu­lous pay, es­pe­cially since, as you point out, 98 per­cent of them are or­di­nary mor­tals who rose through the ranks of the com­pany. I think that CEO pay should be in­dexed to some rea­son­able mul­ti­ple of that of a line worker. And as most of us, ex­cept for those in the cor­po­rate culture, know by now, peo­ple work far more ef­fec­tively for in­trin­sic, rather than ex­trin­sic — pay — mo­ti­va­tions. Ap­par­ently to those mak­ing these de­ci­sions, sci­ence is not rel­e­vant here. While I agree with you that CEOs are not re­spon­si­ble for mar­ket con­di­tions, I would think that re­ally com­pe­tent ones would be able to an­tic­i­pate them, would be able to look five or 10 years ahead and see that dig­i­tal cam­eras are go­ing to elim­i­nate the need for film, that ro­bots are go­ing to re­place hu­mans on the assem­bly line, that coal is too dirty to burn in a warm­ing world. The CEOs of Ford and Gen­eral Mo­tors should have been able to see the pop­u­lar­ity of for­eign cars, be­cause of their smaller size, im­proved fuel econ­omy and bet­ter design, and re­al­ize that they needed to make some changes. Isn’t that part of a CEO’s job? Keep it up, Mr. Lowen­stein — there are plenty of bub­bles that need to be burst. Lai­dler Camp­bell, Springfield, Va.

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