The Uncommonsense Blog Perks and Populists

Watching Ken Lewis get off the Bank of America G5 in New York the other day to attend a wood shed session with Andrew Cuomo reminded me that it's the little things that get you killed in a revolution. It's not unlike waving a red flag at an already angry and predisposed to killing you bull. It's not the flag waving that causes the attack. It's the arrogance that assumes you can be both in the pasture and waive the flag at the same time. Two wrong assumptions in the same hypothesis do not give it twice the chance of being right.

The private plane argument is one of those populist things that's easy to incite the masses with. It's not that they don't agree that the planes are faster, more efficient, and offer higher leverage for an executive's productivity. The distinction is not what those planes say about the value of time. The distinction is what they say about the value of one life over another.,. Somehow, the captains of industry ( who, in the industries we have been bailing out make the Titanic Captain look like sailor of the year) have convinced the shareholders that it's important that they still be allowed to arrive in style and ahead of time to defend bad past decisions and contemplate new and worse ones.

The fact of the matter is that the private plane thing is such a non event. For the most part, they are all leased and get turned in after 5-10 years like worn out sub-zero refrigerators. They are a part of cash flow overhead requirements and factor into a company's G&A just like Post It Notes or Coffee. They exist to leverage an executive's time and in the case of people like Ken Lewis, Jamie Diamond, and LLoyd Blankfein, probably protect them from being torn apart by the masses in some US Air Club near Boise. The planes are such easy targets for everyone because they are so conspicuous. Like some five Karat ring on a bubble headed waitress finger from a guy 30 years her senior, what looks like true love is really just a part of a long evening of debauchery and accelerated TSA screening..

Perks are what get the populist warmed up to riot. If not to riot, then certainly to stay simmering close to the boiling point. Keep enough symbols of what "they have that we don't have" in front of the vast unwashed millions for long enough and you have the beginnings of a fermentation process around civil disobedience that becomes far too easy to bubble over. A couple hundred thousand more layoffs, some more foreclosures, car reposessions, and more bailouts and then the next vote people cast is the one attached to a brick through a window or a 9mm round through an car door.

The reason Barack wants health insurance, jobs, and foreclosure proof housing for the bottom 1/3 of the country is that when those folks don't have those things then eventually cities, town, states, and contries start burning. The mob is the mob. Collegiality goes out the window as the food supply dwindles.

Congress at this writing is making those who would be beggars at the gate get there on a Trailways bus, Amtrak, or Coach Class on Sub-Prime Air. The effort expended to humiliate these guys could be producing innovations and strategies that would pay back loans sooner rather than later or help us understand that we shouldn't be bailing anyone out. No one is asking Congress about their private plane "fact finding" junkets or their limo trips to the airport. No one has to report anyone hitching a ride on a Nuclear Power Industry Jet to a winery in Napa. The double standard would be so obvious if it wasn't, well, such a double standard.

Let's give the executive boys and girls back their jets and just back it off of the bailout monies. It's chump change anyway, and if you took it all away, still doesn't allow anymore accountability for the change that has to occur. Minimally, it will keep their confidence up as executives and since they are going to need all the confidence they have to go forward with huge industry transformation, it can't hurt. At some point they just give it up because it's too energy draining to defend it. Look at Mary Shapiro, former head of FINRA: screw up badly enough and you get promoted to the head of a big governement agency complete with a 25 million defined benefit program. The G5 is actually a better deal even if it comes with some embarassment. At least we know the roseood there is really just veneer.

The real symbolism that was missed by Ken Lewis in taking the jet was this: At some point the executives who know they have done nothing wrong are going to look at this administration and say: "Keep your money, regulations, and hands off me and my industry. If not, I will give you a war you won't believe". I just wish when he stepped off the jet he had paused for a moment and flipped the bird to the entire judicial structure in New York and to the White House..

Ken just told the governing elite that he was prepared for war by arriving in the jet and that what they thought didn't matter. The sad part is that the government officials are too stupid to understand what he's doing. The way you replace a government is to defy it over time with seemingly small, innocuous gestures. The tanks at the end are just to make sure you can keep your position.

Good luck Andy with bullying Ken Lewis.. I've followed his career for 25 years and he's forgotten more about battles and conquest than you've read about. His coach and my former boss was Hugh McColl, the ex marine who helped build North Carolina National Bank into B of A through a series of skillfull and tacticul executions that would've made Sherman's triumph in the Civil War look like amateur night. He kept a hand grenade on his desk and Ken Lewis at his feet. My sense is that he would've thrown either of them at his enemies if necessary..

There are only about half a dozen people that can run institutions as big as B of A in order to keep the US as the Big ATM for the World. and the system from descending into chaos. Be careful. You have none of them in your office and looking back at the first two months of the year, it's apparent Barack has none in his.

Why has the corporate jet become the lightning rod to the proletariat? Jealousy, class warfare, call it what you will. I too wish Ken Lewis had shown his best 'Johnny Cash pose' to Cuomo, New York, Obama, and both houses of Congress. The greater issue as you said is not the use of corporate jets but the fanning of the flames of resentment, soon to be hatred, against Corporate America. The same Corporate America that employs Americans and pays all the bills. The US government does not produce anything. Small business, midsize business, large corporations and their employees provide the fuel for government to exist. The goal of the Left, Obama, is to overload the entire system to the point of collapse. BO's stimulus package and 3 Trillion dollar budget will serve to strain the monetary system of the United States to the point of meltdown. And, that's what he wants. A 'command economy' is the dream of every Socialist... and Obama is no exception!