Dean Baker is not your typical economist. For example, take his argument that top management and high-paying professions have been shielded from international competition for years, whereas manufacturing has not. If you believe this argument, then it makes a lot of sense for Chrysler to be looking for the low-price design and management talent at Fiat. But why didn't Chrysler look earlier? Why haven't other companies done so?
I agree with Baker that top management here has been grossly overpaid when compared with their counterparts around the world. However, I don't think management was shielded from competition. They did compete in trying to make sales against foreign competition. They did not have to compete to earn larger salaries because there was so little competition. They were all greedy and they had no problem getting top dollar from friendly, undemanding boards and complacent stockholders. And, to prove my point, they're still getting the big bucks even though many of their organizations are, in reality, bankrupt. Why is that?
An interesting sidelight: There was a big stink about the "Buy American manufacturing" clause in the stimulus bill, but there has been nary a peep about the fact that those who manage these investments must be headquartered in the U.S.A.
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