Response to John Conyers: Learn something about business

Representative John Conyers, Democrat of Michigan, again demonstrates why he, Barney Frank, Henry Waxman, and Maxine Waters need to retire. His column in today’s Huffington Post inflames populist sentiment with a false argument that CEOs are benefiting at the expense of labor. This claim is irresponsible. You can’t assume that a downturn in a company’s fortunes is the direct result of poor management. Bad economies and ill-advised, overzealous regulations can have negative impacts on a firm’s bottom line, forcing that company to restructure. Restructure, unfortunately, is code for laying off employees since labor makes up the largest component of a firm’s cost structure.

Claiming that executives get preferential treatment with firm assets is also irresponsible. The firm’s assets belong to the firm. The only assets an executive gets are her paycheck and stock options. In addition, why should an executive be penalized for negotiating an effective compensation package?

Mr. Conyers, who touted proposed changes to the bankruptcy code in his post, seems so eager to “change the ending” that he appears willing to interfere with the time honored law of contracts. Such an approach would be like feeding a bloodthirsty Tea Party fish chum. (Mr. Conyers should be taking a lesson or two from fellow Michigander Burt Stupak) Employees losing their pensions in bankruptcy is a reminder that they have not done their homework and have forgotten the lessons of Enron. Maybe Mr. Conyers should save the American people some time with his bogus legislation and simply give the unions courses on how to properly negotiate job saving labor contracts.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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