Can an Overpaid CEO and 2 Sleazy Union Lobbyists Unite Us?

Two obscene stories in the news show why the Tea Party and Occupy Wall Street started protesting -- and the moral intuitions they share

If Tea Party and Occupy Wall Street leaders held a summit at a neutral setting, like a farmers market in Austin, Texas, they could begin to understand the moral intuitions they share by talking over two obscene news stories published this week. One tells the story of Craig A. Dubow, the just-retired CEO of Gannett, a giant media corporation that owns USA Today and dozens of other newspapers. The other story is about Steven Preckwinkle and David Piccioli, two lobbyists employed by the Illinois Federation of Teachers, a large public employees union. As far as we know, no laws were broken by anyone in either of these stories, which is important.

The CEO, Craig Dubow, presided over Gannett during a tough time for newspapers generally and that company in particular. David Carr reports on the details. "His short six-year tenure was, by most accounts, a disaster," he writes. "Gannett's stock price declined to about $10 a share from a high of $75 the day after he took over; the number of employees at Gannett plummeted to 32,000 from about 52,000, resulting in a remarkable diminution in journalistic boots on the ground at the 82 newspapers the company owns." In a way, Dubow was the anti-Steve Jobs: the company he ran suffered financially and saw the quality of its product decline. "Given that legacy, it was about time Mr. Dubow was shown the door," says Carr, but "not only did Mr. Dubow retire under his own power because of health reasons," he was praised by his board of directors and compensated "with just under $37.1 million in retirement, health and disability benefits. That comes on top of a combined $16 million in salary and bonuses in the last two years."

Now ponder the two union lobbyists. Their story comes courtesy of The Chicago Tribune. For years, they've worked for the Illinois Federation of Teachers. Preckwinkle, the better paid of the two, made $245,000 during the most recent school year. He is apparently adept at persuading lawmakers to give him what he wants -- awhile back, he testified on behalf of a particular bill in the Illinois state legislature, and when it passed, he and his colleague, Piccioli, were able to take advantage of an obscure provision that vastly increased their wealth. "Two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007," Ray Long and Jason Grotto reported. "The legislation enabled union officials to get into the state teachers pension fund and count their previous years as union employees after quickly obtaining teaching certificates and working in a classroom. Preckwinkle's one day of subbing qualified him to become a participant in the state teachers pension fund, allowing him to pick up 16 years of previous union work and nearly five more years since he joined. He's 59, and at age 60 he'll be eligible for a state pension based on the four-highest consecutive years of his last 10 years of work."

What's the pension garnered via this one day of subbing worth? "About $108,000 a year, more than double what the average teacher receives," the reporters found. "Over the course of their lifetimes, both men stand to receive more than a million dollars each from a state pension fund that has less than half of the assets it needs to cover promises made to tens of thousands of public school teachers." As the story goes on to note, "a spokesman for the Illinois Federation of Teachers emphasized that the lobbyists' actions were legal and that they made 'individual decisions.'"

What to make of all this? It'll come as no surprise to Occupy Wall Street types that a corporate CEO cashed out with a retirement package worth millions of dollars, despite the poor performance of the corporation he headed during his tenure, and even as many regular employees at that company were laid off or suffered pay cuts. And Tea Partiers will hardly be surprised that Democrats, who took substantial campaign contributions from public employee unions, sponsored a bill with an obscure provision that enriched union lobbyists at taxpayer expense.

But merely seeing these two stories side by side is enough to grasp that in both instances, the people getting rich and their enablers brought about an unjust outcome. Despite the fact that one story concerns "private enterprise" and the other "public service," they're morally objectionable for overlapping reasons, and the bad guys aren't entirely different from one another. If a child, looking at any of their behavior, said "I want to be like that when I grow up," most of us would cringe.

A corporate board is supposed to maximize value to shareholder within the bounds of the law; lawmakers are supposed to act in the public interest within the bounds of the constitution; but neither the CEO nor the lobbyists were paid what they earned, nor were they compensated in a way that made the relevant stakeholders better off. Instead they were taken care of in a way that reflected their elite insider status and their ability to take advantage of wrinkles in the system while breaking no laws. In both cases, less politically connected people -- other Gannett employees, Gannett shareholders, readers of Gannett newspapers, Illinois school teachers, and Illinois taxpayers -- were unjustly made worse off by what transpired. And isn't the overlapping ethic that guided the behavior of these people a big part of what's wrong with America?

Behavior like theirs is one reason Americans on the right and left have recently taken to the streets. Ours is a society that has always tolerated inequality of wealth; and so long as some imperfect degree of fairness is maintained in the getting of material goods, the system functions  smoothly. But if people feel that wealth they struggled to earn is being taken from them to pad the nest eggs of dishonorable union lobbyists; or that they're at risk of being fired from their $14 an hour job if they're ten minutes late, whereas their ultimate boss retires with an eight-figure package after presiding over plummeting stock prices and massive layoffs; people put in situations like that eventually revolt, if they've concluded that injustice is the norm rather than an aberration.

Agreeing on the shamefulness of these situations wouldn't mean that Occupy Wall Street and the Tea Party agreed on the necessary solutions -- it is enough that they get past the irrational symbolic war that divides them more than is justified, at least enough to see the few compromises that would benefit both movements. Once made, Occupy Wall Street would focus its energies on the left, and the Tea Party on the right. And if, as a result, the Republican and Democratic Parties were just 10 percent better at preventing connected elites from gaming the American system, wouldn't that be an accomplishment?

Image credit: Reuters