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preliminary inquiry into the causes of the bankruptcy of Global
Crossing brought in a primary distinction: GC, Inc., was not Enron,
Inc. Global Crossing's accounting could be criticized for the use
of devices that in fact tell less than what, in retrospect, we know
we should have wanted to know. But it appears that nothing was concealed,
that if the "swap" convention is finally adjudged formally
deceptive, blame for using it by Global Crossing is tendentious.
The chief executive of the company, John J. Legere, spoke of his
company as the victim of an industry-wide slump, aggravated by overcapacity
and falling prices.
All of this will get attention, actuarial and political. But the
implications of one exchange in the congressional hearing remind
us of the eternal appeal of demagogy, as also of the dangers of
enacting demagogic impulses. The question was asked of CEO Legere,
what was his salary at GC? Legere stalled for a minute, but the
congresswoman, Stephanie Tubbs Jones, would have no evasion and
asked the question again raspily. Legere answered that his salary
was $1.1 million. Jones asked what was the pay of the average GC
worker. Legere gave the answer, $79,000. Jones: How many workers
could have been kept on if your salary had been divided among them?
All that Legere could think to say was that, "as a rule, I
don't do math in public."
Congresswoman Jones should endeavor not to think in public. But
what she was thinking, or trying to draw attention to, was
the politics of envy. The argument ad populum is defined in the
reference book, Modern English, as "an appeal to the
emotions of the masses. The device is exemplified by the rabble-rouser
who avoids presenting rational evidence against a proposition and
shouts instead, 'Are we going to let them do that to us?' "
The bankrupt company, whose ambition was to wire the globe with
fiber-optic tracery, spent $15 billion during its brief lifetime.
Ms. Jones might as well have asked Legere, "How many CEOs could
you get if you had hired just them, instead of producing fiber-optic
glass?" The question would have been as preposterous as the
question she did ask. The cost of the million-dollar executive has
very little bearing on the fortunes of a 9,000-man company like
Global Crossing. A more intelligent question of Mr. Legere might
have been, "If GC had paid $2 million for a chief executive,
instead of $1 million, might it have succeeded in getting a better
man, whose greater skills might have saved the company?" But
that would not have satisfied the appetites Ms. Jones was out there
to inflame. She wanted, Soviet-style, to arouse the man who has
only one cow by singling out the man who has 20 cows.
The concern
for income polarity is both obsessive and thoughtless. The question
of the "digital divide" is now fashionable. What it says
is that computers have contributed to the polarization of wealth,
on the grounds that computers diminish the need for clerical workers
who, lacking employment, descend to a lower economic level.
Is this an
argument against the use of computers? Mr. Robert Samuelson of Newsweek
magazine reminds us that the use of computers is no longer the reserve
of the wealthy — there is now a computer for every four schoolchildren
in the United States. Those who seek class antagonisms could theoretically
argue that education itself is a polarizing agent. If it is true,
as we are required to acknowledge, that someone with a college education
earns almost twice the income of someone who doesn't have the higher
education, would Ms. Jones find that an argument against colleges?
Education is the primary polarizer, others being industry and intelligence.
The Global Crossing collapse hurt a great many people, the most
conspicuous victims being the 9,000 workers who found themselves
jobless. Also, the however-many it was who put up $15 billion. But
— and in this respect, Global Crossing and Enron do have something
in common — a joint casualty is the encouragement given to
such as Representative Jones to flame out with her demagogy.
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