Tuesday, October 24, 2006

A measure of gloom

Thomas Carlyle's supposedly called economics the "dismal science" He was, in fact, referring to
The controversies on Malthus
"Population Principle", "Preventative Check" and so forth, with which the public ear has been deafened for a long while, are indeed sufficiently mournful. Dreary, stolid, dismal, without hope for this world or the next, is all that of the preventative check and the denial of the preventative check.
A precise measure of how far mournfulness and dreariness could go can be seen in yesterday's (Monday 23 October) editorial column in The Wall Street Journal. The measure is two columns wide and a broadsheet long.

Malcolm finds the WSJ has the fascination of the rabbit for the stoat. How can anyone be so bloody-mindedly and consistently soul-less?

The main leader was entitled The Cut-My-Salary Standard. It was a response to a judgement in New York State, last week, in which New York state Justice Charles E. Ramos ordered Dick Grasso to repay part of his "generous compensation package" (the WSJ's description).

No, no ... wait, don't switch off. This one's worth the effort, and Malcolm (still in the -- former -- Land of the Braves) appreciates that British readers may not be up-to-speed on the topic.

Until September 2003, Grasso -- though, you might like to read "Grosso" -- was the Chairman and Chief Executive Officer of the New York Stock Exchange. In other words, he ran the "Big Board", and to his own great benefit.

Malcolm has an aside here: he remembers, a quarter-of-a-century ago, painted in letters two-feet-high, across the back of the Odeon, Muswell Hill:
Well, Grasso was so greedy, even Wall Street brokers noticed. There was a rebellion, and Grasso was going to be eased out. He negotiated a "compensation package" of $140M, and has since been claiming a further $40M is due to him. Pause for thought: that's winning a triple-rollover Lottery half-a-dozen times, or the combined GDP of the smallest two nations in the UN. He negotiated this settlement with the heads of the pension funds which he was regulating. As the WSJ might, and does say: go figure. The state Attorney for New York, Elliot Spitzer (watch this space) took an interest.

Now for another of those delicious ironies Malcolm so savours: in Grasso's time, the NYSE was [gulp ... swallow ... intake of breath] a "non-profit institution". So Grasso claimed this precluded Spitzer pursuing the NYSE.

But, says Malcolm, let's stick with the WSJ.

So, yesterday's first editorial in the WSJ was a defence of Brasso -- sorry again, Grasso -- and an attack on Judge Ramos:
Whether Mr Grasso was paid a dollar or $187.5 million, the decision was the NYSE board's ... this is an unhelpful judicial intrusion in private pay decisions.
and also on Attorney General Spitzer because:
... the judiciary now feels entitled to set executive pay standards.
Mr Spitzer left out of his suit the influential Democrat ... whose support ... he might have to run ... in the Democratic primary for Governor.
Oh, we got there at last: Spitzer's true failing (as the WSJ sees it) is that, next week, he is likely to become the next Governor of New York.

Now, let's flick past the WSJ's second leader (an attack on the California Proposition 87, to impose a 6% levy on oil extraction to pay for Green measures). And so we arrive at:
Ohio's Bad Proposition
... Issue 2 that would amend the state constitution to raise the minimum hourly wage to $6.85 from $5.15
Malcolm hopes that was understood: it is presently legal in Ohio to pay about £2.76 an hour. The WSJ believes raising that to about £3.68 would:
... lift low-wage earners out of poverty, ... reduce employment propects, particularly for younger, less-experienced and less-skilled workers ... something a state like Ohio can hardly afford.
Good grief, says Malcolm, you need "experience" and "skill" to be worth $6.85 an hour? And, should workers settle for "poverty" as the price of a job, any job? And, at $6.85 an hour you only need to work non-stop, day-and-night for 312 years to approximate Grasso's pay-day.

'Dreary, stolid, dismal, without hope for this world or the next': that's about the length of the Wall Street Journal and its view of the world.

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