Silly or Wily Sowell?

On 10/27 and 10/29 Thomas Sowell uncharacteristically diverged from being an economist and presented himself as an ideologue in published articles entitled “Dismantling America” parts one and two. In them he opined the present administration is proceeding in a particularly un-American way. The first example he gave was the so-called “Pay Czar” cutting executive “pay” by 50 to 90 percent. I feel that an uninitiated person reading only Mr. Sowell’s article might not have a balanced or fully developed basis for forming an opinion on this issue. It is my understanding that no adjustment was made to the effected executives salaries. The adjustment was made in “bonuses”, which is a little different. And of course the Pay Czar didn’t manipulate the salaries or bonuses of all executives in America, only the bonuses of those employed by those banks which received federal bail-out money. Although Mr. Sowell didn’t mention it, there are some holding the position that this Pay Czar is an officer of the executive branch of the Federal government and therefore requires the advice and consent of Congress to be appointed, which didn’t occur. That may be a valid point, but that isn’t Mr. Sowell’s complaint. He thinks the audacious move to cut bonuses is tantamount to a government take-over of private business. But, there is another way to look at it. A case could be made that the government infusion of public money into failing or teetering private banks in exchange for stock, makes the government a substantial shareholder in those companies, and the Pay Czar voting the proxy of the American public is well within the rights typical to shareholding to instruct the Board of Directors or executive powers of the enterprise as to the compensation of company officers the shareholders feel is appropriate. I personally don’t know why shareholders of all businesses don’t rationalize the compensation of officers and retain more profit for themselves via dividends. The disconnect between the munificent sums thought necessary to incentivize management and the apparently meaninglessness of financial incentives to wage earners is staggering, and isn’t justified by any legitimate psychological model I am aware of. Nevertheless, this shareholder’s prerogative exercised by the Pay Czar is not outside the norms of capitalist or corporate procedure. The alternative to the demand of adjustment of bonuses could have been, and should have been, the loaning of the necessary funds at an interest rate commensurate to what the banks would have charged their own customers in similar circumstances. Would that “proper” capitalism have both satisfied Mr. Sowell and addressed the financial crisis?

Mr. Sowell further complains about “panels of experts” deciding who could and couldn’t get life saving medical treatment. He may have been so immersed in esoteric economic theory that he has missed the myriad stories recently in the news of people being “expertly” denied coverage for such “pre-existing conditions” as pregnancy and rape, and various forms of cancer and organ failure that the deciding powers at private insurers disassociate from the ills the flesh is heir to. It is disingenuous to suggest that only the so-called “public option” will subject health insurance consumers to “expert panels”.

He then went on to accuse the present administration of contemplating “a national police force”. All the pre-existing police entities he lists: local police, State Militias, the F.B.I. and the National Guard, etc. are myopically distinguished from the none too subtle domestic army called, “Homeland Security” operating under unprecedented, dubious Constitutional powers, conferred by that miniscule 342 page law that is the Patriot Act. The “national police” (and universal surveillance) are an accomplished fact, and I hate to inform Mr. Sowell his beef is with George W. Bush Orwell, not Obama.

And finally, for him to declare the current President has a pattern of putting into power people who reject “American values” seems to suggest that preemptive war for non-existent WMD, and the torture of prisoners “renditioned” to the gray areas between the words and intent of international law represent “American values”. I ask which promises the worst consequence under his “American values”, saying “Goddamn America” in the pulpit, or having someone recording you saying it on a bugged phone. You’ll forgive me Mr. Sowell, if I don’t accept your definition of “hostility to the values and principles of this country”, until you tell me, and we agree, what they are.