It’s frankly too early to pay much attention to the speeches of potential candidates, but I was taken aback by the recent comment of former Massachusetts Governor Mitt Romney: Corporations are people. After a mental double-take, I sat and considered his comment since he’s liable to be the next Republican candidate for 2012. Technically, he’s correct on multiple counts since a corporation is a legal entity formed by people and employing people for the purpose of making money. Additionally, the United States Supreme Court ruled as far back as 1886 that a corporation had legal standing as a person (Santa Clara County v Southern Pacific) and even recently ruled that campaign finance restrictions were actually a muzzling of Corporate America’s First Amendment rights, which so far as I’m concerned is proof that enough money can buy phenomenal legal representation.
But for all of the technical points, Mitt Romney is horrendously wrong. Mitt sees a Hollywood ingenue while we see Gloria Swanson dripping in mascara and powder to hide the wrinkles and age.
His comments might be sincere and I can even understand why he might believe that given his family history. Mitt Romney is the son of a blue-blood republican and 1968 republican presidential candidate, George Romney, who was himself a former governor of Michigan. But prior to that political post in the early-mid 1960s, he was the president of the now-defunct American Motors Corporation; in the 1950s, he brought that automobile company back against the GM and Ford behemoths on the back of the spunky little Rambler. George Romney was a corporate man, through and through and was also a Mormon who spent time proselytizing in the British Isles, so there’s a particular solidity to his moral beliefs. His son consequently grew up in an environment in which the American corporation was a beneficent and powerful entity which employed thousands of people, it’s effectiveness proven by the industrial might of the Second World War and its aftermath.
If you read Tom Brokaw’s The Greatest Generation or Studs Terkel’s The Good War, one of the recurrent themes is that the Second World War served as a great equalizer amongst American society so that the Wall Street executive’s son served in combat just as the son of the steelworker. While there was certainly a difference between the pay of the American CEO and his typical employee, it was only 24 times the average worker’s wage in 1965 but by 1980 had grown to 42 times the average wage. The most recent results show that this income differential has risen by 2010 to a stunning 343 times the average worker’s wage of $33,900 annually. The large majority of this pay is via the stock options granted in the executive contracts instead of actual wages; there’s consequent incentive to focus on the stock price. Through the ensuing decades, that sense of common cause faded as the generation retired and younger generations with increasingly shorter-term sensibilities took over the reins.
If the American corporation is people, just how many actually prosper and share the wealth? More importantly, how many have had their jobs sacrificed on the altar of globalization to maintain profits? To say that the corporation is composed of people implies a certain common leveling, but how many of those who decided to outsource actually outsourced their own position? Gee, Bob, we’ve got to cut costs so we’re moving your position to Indonesia and since we’re all in this together, I’m cutting my position as well.
The American corporation as a benign group of Joe Six-Packs? Complete bullshit. American corporate management bears some responsibility for the hollowing of American manufacturing and the difficulties facing the American middle class as they increasingly shortened the timeframe of their decisions and viewed people as commodities instead of assets.
As for me, I come by my anti-corporate stance honestly. My father’s corporate job put food on my family’s table when I was a child and a roof over my head and my first real job was in a large insurance corporation. My last job however, was in the corporate headquarters of the now defunct MCI. On one afternoon, multiple senior staff were discussing the results of meetings amongst the senior financial executives and how they were looking for ways to help boost the share price of an already profitable company. One of the plans being discussed was to show the market their seriousness by cutting costs, including the closure of several midwest call centers. Understand something about how MCI kept their labor costs low; they would set up call centers in rural areas which had suffered some economic hardship, purchasing and renovating a warehouse or closed store in which to house the folks who were actually calling you to sell the "Friends and Family" and other telephone products. Because I had to periodically fly to exotic locales like Sioux City, Iowa and Springfield, Missouri, I can tell you that these people were working to pay off student loans, get health insurance and put food on the table. This appalling concept helped me to understand that I was nothing more than a cog that would be willingly sacrificed to the greater glory of Earnings Per Share. When we found that my wife was pregnant, it was certainly one of my thoughts as I decided to resign and stay home with the baby.
Not all corporations are evil and not all executives deserve castration, although that too is increasingly irrelevant in light of more women in management. But America has become too beholden to the corporations that purchase votes and public image in the pursuit of short-term and pyrrhic profits and when it’s time to actually consider the political alternatives, I’m going to remember Mitt’s mistaken sentiment and ill-considered remarks.