Some have commented on the remarkable New York Times article from last weekend profiling some of the country's mega-rich, but mostly to note what a bunch of assholes the plutocrats portray themselves as. It's astonishing that Leo Hindery didn't pause before comparing himself to Derek Jeter and musing that, "I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear." It's a real testament to the laziness and relative comfort of the country that this comment didn't result in riots on sheer aesthetic grounds.
Less attention, though, has been given to the psychology of the subjects, which is actually fairly interesting. How, after all, do you mentally justify an income that gives you, an individual, a measurable and even substantial share of the national income in the wealthiest country in the world? And how do you do it when, 40 years ago, CEOs like yourself made far less money, and yet growth was similarly rapid and much more of its gains accrued to the median American? Answer: You construct a new mythology for yourself and your gains:
The new tycoons describe a history that gives them a heroic role. The American economy, they acknowledge, did grow more rapidly on average in the decades immediately after World War II than it is growing today. Incomes rose faster than inflation for most Americans and the spread between rich and poor was much less. But the United States was far and away the dominant economy, and government played a strong supporting role. In such a world, the new tycoons argue, business leaders needed only to be good managers.
Then, with globalization, with America competing once again for first place as strenuously as it had in the first Gilded Age, the need grew for a different type of business leader — one more entrepreneurial, more daring, more willing to take risks, more like the rough and tumble tycoons of the first Gilded Age. Lew Frankfort, chairman and chief executive of Coach, the manufacturer and retailer of trendy upscale handbags, who was among the nation's highest paid chief executives last year, recaps the argument.
“The professional class that developed in business in the '50s and '60s,” he said, “was able as America grew at very steady rates to become industry leaders and move their organizations forward in most categories: steel, autos, housing, roads.”
That changed with the arrival of “the technological age,” in Mr. Frankfort's view. Innovation became a requirement, in addition to good management skills — and innovation has played a role in Coach's marketing success. “To be successful,” Mr. Frankfort said, “you now needed vision, lateral thinking, courage and an ability to see things, not the way they were but how they might be.”
But if these CEOs believe their superhuman capacity for "lateral thinking" justifies their salaries, their own words puncture the rationale for allowing them such great gains:
