This is kinda political but it's not about Obama and Romney. As Matthew Yglesias explains here, American Airlines is a mess. Late and cancelled flights. Bad service in other ways. An increasing reputation as the airline you fly only when no one else can you get you where you need to go…and then there's only about a 50-50 chance that American will be able to get you there on time.
Lo, how the mighty have fallen. American used to be a great carrier. Yeah, and O.J. Simpson used to be a football hero, too. Anyway, American is in understandable financial trouble that has probably been made worse by attempts to cut losses by screwing over employees. It's been theorized for some time that its only hope for survival is a merger with U.S. Airways. Okay, so why don't they just do that?
Because, as Matthew Yglesias explains here, the financial configuration of the company is such that execs at the company can personally pocket somewhere between $300 million and $600 million if they don't do that.
And right there, you see an awful lot of what's wrong with American business these days. So much of it is not run for the benefit of the customers or the employees or even the stockholders. It's run for the CEO and top executives to get in, get rich and get out. That they leave the company being kept alive on a ventilator is not a concern.
Recently, I declined to testify as an Expert Witness in a lawsuit involving a publishing firm that was filing for bankruptcy. The thing I was asked to be an expert about — and I wasn't, which was one reason I said no — was about executive compensation. A senior exec was hired away from another firm. He did almost nothing at the new firm — and what he did do was by his own admission, wrong. They fired him and he left with a $20 million Golden Parachute. (I told them I could make bad decisions for them for less than half that salary.) The suit was about that he thought he deserved more.
The smartest person who ever inhabited the same room as me was probably Akio Morita, the co-founder of Sony. More than twenty years ago, I attended a lecture he gave and one of the points he underscored was this: American industry was in trouble because it did not reward its managers for long-term health, only for short-term results. He said (approximately), "There are things I could do now that would boost Sony's grosses for the next two years but destroy the company within seven. If I was hired on a typical American executive contract, there would be financial incentives for me to do just that."
As he was explaining this, all I could think of was Leo Bloom telling Max Bialystock that under the right circumstances, a producer could make more money with a flop than with a hit. And we all know how that turned out.