The AFL-CIO reported recently that CEOs in the S&P 500 stock index are paid 331 times what the average worker is. Now a comprehensive university study provides evidence that higher paid CEOs often do worse for their companies in key areas. So not only are CEOs paid millions more than most mere mortals but they are also underperforming for the companies that hire them. The study by the David Eccles School of Business at the University of Utah used a larger data sample (1,500 big cap companies) than past efforts to track CEO pay to overall performance.

Specifically, the study discovered that the highest paid CEOs earn significantly lower stock returns for up to three years. Additionally, CEOs with an average compensation of more than $20 million are linked to an average yearly loss of $1.4 billion for their organizations.

The study didn’t feature the performance of individual firms, but a list compiled by the Wall Street Journal (available here) shows the highest paid CEOs and their company’s ranking. In 2013 the top twenties compensation spanned just over $75 million to a paltry $22.4 million. None of the top ten in CEO pay are in the top ten percent for business performance. And the highest paid CEO’s corporation is ranked no.152 for performance.    

A link between higher executive pay and more overconfident behavior in making decisions was also shown in the study. Overconfidence leads to increasingly risky aggressive mergers, acquisitions, bad projects, and wasteful corporate spending. The study’s author gently offers this caution:

“[…] this study doesn’t prove that increased pay is necessarily bad, it does show there is a link between increased pay and decreased financial performance.”

You know regularly overpaying CEOs by many gazillions of dollars isn’t necessarily the problem or even bad but  … The study suggests an obvious solution – reexamining the methods used to determine executive pay and incentives for maximize performance.

Will we see pay-cuts, haircuts, and smaller compensation deals at the top? Wouldn’t bet on it.

Those “Gazelles” BP wrote about?  The second herd is lining up at the trough, and once again, Frank Cioffi is the maitre d’.

Responding to rumors that Vermont’s biggest corporate gimme machine, IBM,  is about to take its much diminished business elsewhere,  Mr. Cioffi and the Greater Burlington Industrial Corporation are proposing that Vermont shovel another $4.5 million into Big Blue’s gaping maw.

And that’s not all!

The full menu, per the Burlington Free Press:

• Grant $4.5 million from the Vermont Enterprise Fund to IBM campus ownership in support of the local workforce and campus infrastructure. Cioffi pointed out that the money would be available only after July 1, and it is Gov. Peter Shumlin’s decision, in consultation with the Legislature, how to deploy the dollars.

• Fund and support the various workforce training programs available in the state and rebuild the “highly successful” manufacturing and technician training partnership between Vermont Technical College and IBM.

• Identify a “public entity buyer” for the IBM campus wastewater treatment facility and other campus infrastructure, using state and federal resources to acquire and subsidize operating costs, as the IBM infrastructure is “the most significant in our state.” Cioffi believes this is important regardless of whether IBM continues to own the facility, as other manufacturers could benefit from the infrastructure.

• Engage a statewide action team on IBM immediately, led by Shumlin and including the state’s most experienced economic development professionals. GBIC recommends Commerce Secretary Patricia Moulton to lead the team for the governor.

• Form a regional-level team to work with the state team that includes Cioffi and the executive directors or presidents of Franklin County Industrial Development Corp., the Chittenden County Regional Planning Commission, the Lake Champlain Regional Chamber of Commerce and the United Way of Chittenden County. Cioffi also recommended the regional team include municipal leaders from Essex Junction, Essex and Williston and board members of GBI

That’s right; the plan is to rain so much money and public payroll hours on IBM that they just have to give us one last dance.  It’s what we do!

But let us not forget what Cioffi said just days ago about li’l ol’ Vermont’s realistic expectations of outbidding other locations for Keurig’s affections:

(when asked) if the State of Vermont through VEGI had the ability economically to compete with other states and nations. “Probably not” said Cioffi, but he supports VEGI spending.

Could we expect anything else with regard to Vermont’s #1 corporate crush? Probably not.

Last week the House of Representatives voted almost unanimously to add a plaque bearing a prayer to the World War II Memorial in Washington, D.C.

The bill, officially called “The World War II Memorial Prayer Act of 2013,” has been on the wish list for right-wingers for years. It is also, without a doubt, unconstitutional.

A bit of history: The World War II Memorial, located on the Mall in Washington, D.C., was authorized by legislation signed by President Clinton in 1993.  It is the first national memorial dedicated to all who served during World War II and acknowledging the commitment and achievement of the entire nation, and it has been open for ten years.

Since 2011 this bill has been pending in Congress, over the objection of the Obama administration, and the bill would change the memorial by adding a plaque setting forth the prayer delivered by President Franklin Roosevelt in a radio address on D-Day. The bill was pushed in the Senate by conservatives like Rob Portman, Joe Lieberman, and Mary Landrieu, and was passed in the Senate on a unanimous consent request earlier this month.  Monday it passed the House of Representatives, 370-12.

 As I said, the bill clearly violates the Constitution. You know, that whole “Congress shall pass no law respecting an establishment of religion” thing?

The Supreme Court has a long-standing test to evaluate Establishment Clause challenges, called the Lemon test from the case, Lemon v. Kurtzman, in which it was first enunciated. In order to survive a constitutional challenge, the government action must pass all three elements of the test:

The statute must not result in an “excessive government entanglement” with religious affairs. (also known as the Entanglement Prong)

The statute must not advance or inhibit religious practice (also known as the Effect Prong)

The statute must have a secular legislative purpose. (also known as the Purpose Prong).

 http://en.wikipedia.org/wiki/Lemon_v._Kurtzman

 In this case there is no problem with the entanglement prong: the plaque doesn't involve any interaction between a religious group and the government because it is simply the words actually used by FDR.

 The second prong is more problematic, as the plaque will not only advance but also embody a specific prayer in a national monument.

Finally, the third prong is clearly violated: regardless of the disingenuous claims we can expect to hear from the bill's proponents, it is impossible that the purpose of the bill is anything but to advance religion. As Americans United for the Separation of Church and State pointed out in their written statement:

 When Senator Rob Portman and Senator Joseph Lieberman spoke about the bill on the Senate floor upon its introduction, they both noted the religious significance of adding the prayer. Senator Portman explained that the new inscription will be a “permanent reminder of . . . the power of prayer through difficult times.”6 And Senator Lieberman stated his belief that the prayer will “remind us that faith in God has played a pivotal role in American history every day since the Declaration of Independence.”

 Talk about faith in god and the power of prayer is not secular, it is the precise opposite: an effort to use the government to advance the claims of religion in contravention of the Constitution.

I encourage our readers to contact the White House and urge President Obama to veto this legislation. 

Greetings. Your Obedient Serpent jvwalt here with a bit of news about myself, for once.

I’ve established my own piece of online real estate called the Vermont Political Observer, or theVPO for short.

Which is not to say that I’m departing these hallowed precincts. I have a great deal of respect and gratitude for GMD and its community; you’ve given me a platform and taken my views seriously. (Well, usually.) So, with the assent of my fellow GMDers, I’m sticking around here as well as at theVPO.

The reason I’m doing this: GMD was conceived as a group space to accommodate a variety of voices from the Democratic/liberal/progressive community. I think it works best when there are many voices. And sometimes I tend to dominate the conversation.

I’ve been known to write as many as four posts in a day. Which leaves little room for others to provide their own analysis of the day’s events. So I want to open more space for others’ voices.

My plan is to write no more than once a day or thereabouts on GMD, and as often as I feel like it on theVPO. I hope you’ll take time to visit both outposts. The Internet’s a big place, after all.  

Cross-posted at thevpo.org.

The New Candidate For A New Millennium, Scott “Mr. Bunny” Milne, is off to an inauspicious start. He doesn’t have a campaign website yet, so there’s no established way for supporters to, like, give him a campaign contribution. He has yet to hire a single staffer. And he acknowledges that he has yet to formulate positions on some key issues.

Plus, at last Saturday’s VTGOP confab, he was a tad underwhelming. The Freeploid’s Terri Hallenbeck:

He then launched into a story about raising rabbits as a kid and how his out-of-state relatives enjoyed watching them breed, prompted by the premise that he got his rabbit cages in Wolcott, the town where Berry lives. In the parking lot afterward, Milne wondered how well the rabbit story had gone over with his audience. He has three months before the primary to weed the rabbits out of his political speeches.

Aww, bunnies.

So the novice candidate is off to a bumpy start. Understandable, but time is a commodity in short supply chez Milne. So what should he do? How can this longshot candidate elevate his slim-to-none chance of upsetting Governor Shumlin, or at least help to promote a new, more inclusive type of Vermont Republican Party? I’ve got ideas, and as usual, I doubt he’ll take ’em.

First thing: attach himself at the hip with popular Lt. Gov. Phil Scott. Do joint campaign appearances as often as possible. Announce common initiatives and policy ideas. Scott usually likes to hoe his own row, but he should be amenable to a little partisanship this year, since Governor Shumlin done left him at the altar and endorsed Progressive Dean Corren.

He should spend a lot of time talking with key business leaders. But not the Usual Suspects, no sirree. No BIA, no Ethan Allen. I’m talking about Vermont Businesses for Social Responsibility. I’m talking about some of the centrist business types who’ve abandoned the VTGOP in favor of Shumlin. I’m talking about Bruce Lisman; for all his faults, he does have a solid good-government orientation. Heck, he even has a few good ideas. Milne ought to make an overt play for the Campaign for Vermont crowd, and point out where the Shumlin Administration has fallen short on their key issues.

After the jump: health care reform, taxation, and more.

In terms of policy, he’s done a good thing by proclaiming himself a single-payer skeptic instead of an outright opponent. He would do well to refine his message by taking a stand in favor of universal coverage as a goal in some form or other. He should talk more about that, and less about cost concerns.

There’s lots of room for criticism of Governor Shumlin on health care. But it should be put in terms of managerial competence, not the usual tax-and-spend bumpf. Milne can legitimately question Shumlin’s ability to deliver, based on past and current track record. He can position himself as a champion of responsible governance in the tradition of George Aiken. That’s the true heart of moderate Republicanism, and it’s a message that could appeal to centrists and independents.

On many issues, I’d argue that Milne doesn’t have to develop specific proposals. As a general principle, he can position himself as a competent manager willing to work with the almost certain Democratic majority to find solid, responsible solutions. This is different than the VTGOP’s constant call for “balance in Montpelier.” This is a call for a new, inclusive approach to government.

Milne could even slip to Shumlin’s left on taxation. The Governor is a resolute foe of raising taxes on the wealthy. Milne could outline a thorough tax-reform plan including the school funding mess and a rebalancing of the entire system. Some new revenues could be drawn by cutting loopholes and deductions for top earners. If those revenues are balanced by lower taxes elsewhere (a plan promoted by the Democratic legislature in 2013 but blocked by the Governor), Milne would probably offend some of the dead-enders, but he’d gain respect across the board.

And yes, as I’ve written before, the wealthy get off relatively cheaply in Vermont’s current tax structure. If you include all taxes on working-age Vermonters, the wealthy pay a smaller percentage of their incomes in taxes than any other group — including the bottom 20%.

On some issues, Milne can articulate a more traditionally conservative view if he establishes himself as an independent thinker. For instance, he could posit a more balanced cost/environmental approach to renewable energy — but only if he acknowledges the truth of climate change and our responsibility to address it in tangible, concrete ways.

He can continue the good-management theme on a variety of smaller trouble spots, such as the current DCF mess (but please don’t talk about Challenges for Change) and the whistleblower brouhaha: part of being a good, sharp-eyed manager is to welcome the input of employees with valuable perspective.

Any of these suggestions can be modified or swapped out for better-fitting parts. But I think I’ve outlined a way for Scott Milne to establish himself as a credible alternative to Governor Shumlin, and as the harbinger of a new and more appealing VTGOP.

I’m not saying I’d vote for this candidate, and I’m sure not claiming he’d win. But he’d make a good showing, and he’d get at least a feeling of satisfaction for all his hard work.  

Didn’t see this coming. Per WCAX:

“I think Dean Corren has it right on Health Care,” said Shumlin.

Shumlin endorsed a Progressive candidate for the second highest office in the Green Mountain State while wrapping up a press conference.

He called on the state Democrats to do the same.

Well, whad’ya know. Maybe the Governor values single-payer health care more than the happy vibes from having Phil Scott in his cabinet.

I expected that Shumlin would endorse Corren sooner or later. But I thought it’d be a lot later, and with more measured language. Now that he’s taken this position publicly, we should expect him to follow through. Some joint campaign appearances would be nice. Print up some Shumlin/Corren bumperstickers?

As for the Governor’s Republican bestie…

[Scott] expressed surprise by the timing of Monday’s news, but says he did not expect an endorsement from Governor Shumlin.

Do I detect the first-ever existential shudder from Phil Scott’s political soul?

After all, Dean Corren qualified for public financing, which means he’ll be (at the very least) financially competitive with Scott. Also, there’s this from VTDigger’s Anne Galloway:

Many big donors who have given to Lt. Gov. Phil Scott are now contributors to Gov. Peter Shumlin…

Hmmm. Galloway doesn’t go so far as to say Scott’s having trouble getting donations, but the implication seems clear.

But back to my main point: I’m glad to see the Governor come out so early and so prominently in support of Dean Corren. It can only help Corren achieve credibility with Democrats and independents. And I have to assume it presages a Corren endorsement by the Democratic Party. Good stuff.  

What we really want: more  investments in local-sized efforts.

Before Keurig Coca-Cola GMCR announced their new set-up deal in the state of Georgia, a Vermont business leader referred to them as a gazelles. Meaning they were growing and hungry corporations – big businesses that demand to be fed endlessly – always threatening to leap out of state at a moment’s notice. Some feed is supplied from Vermont’s limited VEGI tax incentive goodies and similar economic treats. Seven Days asked Frank Cioffi (head of the GBIC) if the State of Vermont through VEGI had the ability economically to compete with other states and nations. “Probably not” said Cioffi, but he supports VEGI spending. But why not stop buying into the gazelle corporate tax credits extortion racket?  

Vermont hand fed the Keurig GMCR gazelle about nine million dollars worth of assorted tasty tax credit bits since 2011. Vermont’s Working Lands Enterprise Initiative isn’t high on the corporate food chain, but greatly expanding such locally targeted efforts may be a better way to spend our resources. The cost is lower; almost a pittance by comparison (fewer than two million in two years), and the local effects could be almost immediate.

The two-year-old program is a cooperative effort of the Agency of Agriculture, Food and Markets; the Vermont Department of Forests, Parks and Recreation; and the Agency of Commerce and Community Development. Working Lands awards support grants and training to Vermonters engaged in agriculture, food systems, forestry, and forest product-based businesses: the working landscape. In the first year $986,500 was awarded; this year, with a slight increase, $1.1 million will be channeled directly to 37 farm and forestry projects scattered throughout Vermont. The funds provided are being used for a variety of projects, including a computerized weight data and tracking system for livestock, equipment to expand production at a goat farm,a portable sawmill and materials for solar-assisted lumber kiln.

And those being helped are definitely not corporate gazelles. In Greensboro, an apple orchard owner who applied for and received $20,000 to create an on-farm processing facility remarked,

“It’s not incredibly glamorous, (but) it’s setting the stage for the next 10 years,” he said. “It’ll really make us much more viable in terms of cash flow.”

And just for scale, here is a look at what things are like for one corporate gazelle: in 2012 Keurig GMCR gave their then-new CEO a onetime signing bonus of $600,000 in addition to roughly $3 million in stock. Also they kicked in $500,000 to relocate him to Vermont.

Who do you want to spend Vermont’s money on?      

This could be bigger than it looks.

On Monday, in one of those infamous “5-4” decisions, the Supreme Court signaled something of a change in the weather.  This time, the “five” sided with progressive interests rather than against.

The question was whether or not the (Obama administration) EPA would be allowed to impose regulations controlling greenhouse gasses.  It sharpened the pen of an earlier (2007) decision that reprimanded the (Bush administration) EPA for rejecting a petition from a group of citizens who joined the State of Massachusetts in asking that they be permitted to establish statewide regulations for auto emissions.  In that instance, SCOTUS found that the EPA had improperly rejected the petition:

Instead, EPA rejected the rulemaking petition based on impermissible considerations. Its action was therefore “arbitrary, capricious, or otherwise not in accordance with law,” §7607(d)(9). On remand, EPA must ground its reasons for action or inaction in the statute.

That, too was a 5-4 decision with arguably a progressive outcome, but was cautiously framed around the arbitrary nature of the EPA’s position with regard to the petitioners and carefully avoided the “third rail” of climate science.

While that decision offered no opinion on the scientific validity of human induced climate change, Monday’s decision kind of does, by implication.

The agency made such a finding, saying that “elevated concentrations of greenhouse gases in the atmosphere” pose a danger to “current and future generations,” and it set limits on emissions from new vehicles.

The ruling failed to support the “primary rationale” on which the (Obama administration) EPA sought permission to act.  To do so would have had implications far beyond the limited scope of power plant emissions, which were the immediate focus of EPA action.  It can be hoped, though, that this decision will favorably weight future attempts to extend the regulatory arm of the EPA to strictly limit vehicle emissions.

Has a “tipping point” finally been reached, where the science of climate change is poised to leave the arena of political whimsy and join “terrorism” as something both liberals and conservatives can embrace as an actionable threat?

We can only hope so.

The cream in Dave Sunderland’s Monday morning coffee must have curdled when he read Anne Galloway’s assessment of the VT Dems’ “deep pockets, star power, organizational prowess and messaging discipline,” none of which are present in any meaningful quantity in his own VTGOP.

Galloway’s piece began with a lengthy recounting of the Curtis Award dinner, a night of self-congratulation and further widening of the money gap and enthusiasm gap between the two “major” parties.

The Vermont Democratic Party is now so big, so powerful and so rich going into this election cycle that there is little doubt, observers say, that the Dems will hold on to all of the current statewide seats and huge majorities in the House and Senate.

… no one in politics has any doubt that the Democrats rule the state and will continue to do so into the near future. The Vermont Democratic Party has practically absorbed the Progressives, has weakened the Republicans to super minority status and the Liberty Union candidates are barely on the fringe.

And after all that, Galloway brings down the financial hammer.

The final blow to Vermont Republicans is the Dems’ effective capture of the state’s most important business interests. Many big donors who have given to Lt. Gov. Phil Scott are now contributors to Gov. Peter Shumlin, who has made an effort to appeal to fiscal conservatives, and has a $1 million war chest. While the Dems have about $150,000 in the bank (plus the proceeds from the Curtis awards dinner), the GOP has $34,000 left going into the election.

Gee, I wonder where all the money from that Chris Christie fundraiser went. Maybe there wasn’t that rich a take after all.  

Galloway’s analysis is an important update on Paul “The Huntsman” Heintz’ must-read column from last December, which recounted a fundraiser for Shumlin hosted by a deep-pocketed Republican donor and attended by many more of the same — all eager to write checks to the Governor.

Whether or not you agree with Shumlin’s mollification of center-right business interests, it’s clear that in terms of political power, the strategy has paid off, big time. Sunderland and Scott are trying to broaden the VTGOP, but it may already be too late: as long as the money guys believe they can do better as the camel inside the Democratic tent than outside, the Republicans are well and truly screwed.

The lasting legacy of “Angry Jack” Lindley, methinks. Plus the complete abdication of the political field by everyone in the Jim Douglas administration. The only one I know who’s gotten involved in politics this year is ex-Ag Sec Roger Allbee, and he’s running as a Democrat.

So, ridin’ high on the hog are Shumlin and Co. Which calls for regular structural inspections for creeping rot belowdecks. This kind of one-party dominance rarely ends well, as I’ve written before on more than one occasion. The continuing troubles with Vermont Health Connect, as understandable as they are (big new government programs are always buggy at first), may be early signs of lax administration. When you don’t face any real competition, you tend to get a little lazy. And laziness can lead to bungling, corruption, scandal, and disgrace.

While I welcome a little schadenfreude with my morning egg & toast, I’d really like to see the Republicans emerge as meaningful competition. Give the Dems an occasional scare. It’d be better for our state, and for the vitality of the liberal movement in Vermont.  

This weekend, Vermont welcomed two prominent women: former Secretary of State Condoleezza Rice, and current Senator Elizabeth Warren. Both events were dutifully chronicled by Vermont’s Largest Newspaper, the Burlington Free Press. But I noticed an unusual difference in the Freeploid’s respective coverages.

The Rice article chronicled her speech, including her unhelpful advice to the Obama Administration that the US has to get back in Iraq and fix it. This time for sure, as Bullwinkle T. Moose put it. The ‘Loid also regaled us with her “quipped” response to the protesters: “Democracy is noisy.” The paper even put it in the headline, so much did they think of Rice’s witty comeback.

Somehow the ‘Loid missed the obvious derivation of Rice’s remark: Donald Rumsfeld’s infamous “Democracy is messy” comment on the post-invasion anarchy in Iraq. Was Rice, in her bland dismissal of the hecklers, making a sly reference to Rumsfeld’s bland dismissal of rampant violence and incivility? Probably not; that’d be a remarkably dickish thing to do, even by Bush Administration standards.

Anyway, on to my point about the Freeploid’s coverage. Aside from the reference to unruly protesters, the article made no attempt to include views contrary to Rice’s on the situation in Iraq.

Compare that with the ‘Loid’s coverage of Elizabeth Warren’s speech, in which reporter Nancy Remsen or (more likely) her editor felt compelled to include a Republican rejoinder. Remsen reached out to “Little Snell,” VTGOP Treasurer Mark Snelling, for some boilerplate Republican ranting about taxes and spending.

And I ask, why? Or alternatively I ask, why no Democratic rejoinder to Rice?  

Really, the whole notion of boilerplate rejoinders, published for the sake of some false journalistic “balance,” is useless. Not every article needs to include both sides — especially when you’re covering a visit to Vermont by a prominent figure. Balance isn’t a story-by-story thing; it’s a matter of fairness over time. I’d have been happy if neither article included the customary counterpoint.

But if you’re gonna do it, then you’ve gotta be consistent. For the Rice article, get Bernie Sanders on the phone; he’s always good for some quotable boilerplate. Or, if you want to be whimsical about it, get a comment from the Slummin’ Solon, Peter Galbraith. He’s a freakin’ genius when it comes to middle eastern policy, right?

As the Freeploid’s journalistic sins go, this is penny-ante. But it’s still worth noting.