US Still the Land of Opportunity?

I'm going to stick my neck out here. I don't know the conclusion to this post as I start writing it.

I just read an article in the Washington Post which spoke of the income differences between the US and Western Europe, specifically Germany, the Netherlands, and some Scandinavian countries. They have lower unemployment, higher wages, and generous social programs, including universal healthcare. One interesting difference the writer, Harold Meyerson points out is in Europe the average CEO makes 11 times the salary of a worker. In the US it's between 200 and 300 times ("pick your survey" recommends Mr. Meyerson).

What occurred to me is the European CEO's are most likely experienced with the products they sell. When a leader develops in an industry, they're recognized because that's what they know about-- they came up in manufacturing, or engineering, or sales. They know their products and their customers. They're also, according to the article, younger and more open to new ideas.

In the US, in contrast, the celebrated CEO's are more likely to know only how to make cash. It's one thing to make money building and selling a car, and it's another thing entirely to make money from the car company. Squeezing an industry for cash has become the sole motivation for many in management. It's easy to measure. The skills are transferable, and frankly it's the only subject in which boards of directors are now interested.

What happens to companies when they become interested only in money? Go to a home store and look at the products from GE. A company that was for decades an innovator in manufacturing and many innovative products-- appliances, tools, electrical equipment, even jet engines and nuclear plants. Have you looked at GE products lately, at Target, Home Depot, WalMart, Sears? GE resells cheap Asian electronics devices, and imported appliances and tools. They're still big in jet engines, and are still apparently bidding on building nuclear reactors (and they're out of the entertainment business, I think, having sold NBC), but the products they sell to consumers are no longer made by those consumers. They're made in China and Singapore and Indonesia, and Korea. And Mexico.

Note what's going on here-- the company is still making money, and lots of it!. But they're making that money on reselling the products of workers in another country.

Today's high-flying management is motivated only by profit. CEO's are expected to make CASH, not a great car, or a great, innovative, efficient and sustainable appliance, or any product at all besides cash. We're told this is a law of nature-- the way capitalism works. But why are our European brothers and sisters doing so much better with employment and social services in their countries. Perhaps a look back is in order, to the time business was motivated by the desire to create great products, develop and build new markets and technologies, and work in partnership with customers, employees, management, and government. We had that, not so very long ago. Back when making a lot of money was the just reward for doing a difficult job supplying a great product to a market which could afford to buy it. Let's stop thinking profits are the reason for business, and think in terms of great products and their producers. Let's stop thinking conglomerates and massive scale are good in themselves. Let's point out globalism-- as a way to make money no matter the costs for any single population-- as parasitic, inhumane, and basically ruinous of real wealth. There... problem solved.

That's it. I've mixed the most basic insights of an Econ101 student with some very current, vaguely liberal "cyber-journalism" and posted it in my blog. I wish I knew more about this. All I know is it really seems we-- the rank-and-file taxpaying middle-class Americans-- are getting hosed. And we're the best off of anyone in the 99%.