Max Baucus is starred in his own show this week, the Economic Summit in Butte, with headlines describing the firepower he’s brought in, the impressive list of CEOs. It makes Baucus look powerful, and of course a big event in a Montana city is good for the city, fills up hotel rooms and bars and restaurants and rental cars and so on.
But a few observers, including the Helena Vigilante and the New Republic, have observed that the conference is not all that it seems, and is much more than one might immediately realize. They have noted that these captains of industry have come at a price. They have agreed to come kiss Baucus’s ring because he is the man that, as chair of the Senate Finance Committee, doles out corporate tax breaks and statutory loopholes in federal law, which allow major American corporations, and CEOs, to pay an astonishingly low tax rate, the lowest in American history, and to screw consumers and citizens.
Seen in this way, the summit could be viewed as a farcical commentary on everything that is wrong with American government and policy. A politician wants to boost his cred with the people, and to do so, he puts together a mega event that costs, not benefits, ordinary citizens. The Oracle CEO, for example, arrived to talk about how he wants to bring jobs back to Montana. But Oracle has an application in the pipeline to bring 600 foreign workers to it’s operation in Bozeman to do those jobs–instead of hiring Montana or even American citizens, using a thing known as an H1N visa that allows big companies to use imported foreign labor at a savings.
Richard Anderson, the Delta CEO, also spoke about his desire to help Montanans.
Of all the emblems of how the consumer is getting increasingly screwed in our society, Delta is one of the mightiest. Here was the CEO, sitting on stage and acting as if he cares so deeply for the Montana consumer of his product.
He has a funny way of showing it. The outrageous prices paid by Montanans are bad enough, but Delta has fashioned an economic model where passengers are treated like cattle, not humans. The consumer is dictated the terms. On one recent flight, I dropped my phone and couldn’t pick it up until the flight ended, because there was so little legroom that I was stuck and couldn’t even reach down. On the flight before that, it was too dim to read a book because there were fewer reading lights than rows, because they had stuffed so many seats in. And the bag fees–which we were once told was due to fuel costs–have become a permanent thing even though Delta now owns an oil refinery and is thus at least partially immune to fuel costs (and the CEO in fact bragged to the audience in Butte about this very thing). And don’t get me started on the smell of these planes or the $19 dollar gas station quality food, or the $15 internet.
Finally, let’s recall that if you want to speak to a live person when you book a flight, you are charged an extra $25 for the pleasure of it, and are routed to a person in a foreign country who works for 10% of what a US worker would cost. (In general, union labor was not a very popular thing among most of the company execs who spoke in Butte).
Anderson’s compensation last year was $12.6 million. And he’s not doing anything he shouldn’t do, really. His job is to squeeze every last dollar out of the consumer. Delta’s stock has risen impressively in the last several years. He is thus successful.
Most businesses, however, cannot treat a customer like this, because they’d lose their customers. But Delta, and United, and other airlines, and players like Verizon, Blue Cross and many banks and cable companies, and hospitals–they gradually position themselves into positions of strength, and they’ve also spooked Congress into not taking action to protect the consumer. In some countries, including many modern thriving democracies, consumers are protected from quasi-monopolistic strong arm tactics like what Delta does.
Not in America. Customers routinely lose in the face-off. The consumer has very few allies in Washington. That’s the imbalance that needs to be righted. Anderson is doing his job, and thus Congress needs to do its. But it doesn’t. Congress instead works for Anderson.