Wall Street values on Jones Street

Published March 4, 2014

By Rob Schofield

by Rob Schofield, NC Policy Watch, March 4, 2014.

The moral decline of modern capitalism infects North Carolina state government

There are lots of insidious ways in which the unfettered greed and inequality of 21st capitalism are infecting and damaging our government. The most obvious and direct, of course, is the way in which the wealthy plutocrats and giant corporate interests can literally purchase so many of the people who run it. It’s gotten to the point at which one gets the sense that the super-rich must have line items in their annual budgets for such purposes:

Cayman Islands beach cottage maintenance and upkeep.…$2.2 million

Private jet (pilot, maintenance, fuel)…………………………..$1.5 million

State Supreme Court……………………………………………$3.0 million.

Similar calculus also factors into the lobbying and political budgets for powers that be. As one of the state’s leading good government watchdogs, Bob Hall of Democracy North Carolina, noted in a recent report, Duke Energy showered $437,000 on North Carolina Republican causes in 2013 (just as they did on Democrats for many years). With such enormous outlays there’s no need for “smoky backroom deals” of the kind State DENR Secretary John Skvarla so conspicuously and amusingly disavowed last week; in such situations, everyone in government already knows what to do.

Executive “sacrifices”

Sadly, however, direct purchases of this kind are far from the only instances in which Wall Street values have infected and afflicted our public structures and services. For decades, American presidents and governors have complained of their inability to woo successful corporate executives into public service because of the gigantic compensation packages their prospective appointees would be forced to leave behind and the “sacrifice” that comes with eking by on a public salary of only a couple of hundred grand per year. Gone therefore are the days when the President could tab the head of one of the nation’s leading companies (or even top universities) to head, say, the Defense Department or the Education Department.

North Carolina Governor Pat McCrory infamously made addressing this kind of CEO “pay gap” one of his first steps upon assuming office last January when he immediately bumped up the salaries of several top state officials who were already slated to earn well over six figures. Since that time, he’s taken other incremental steps to soften the terrible “blow” of public service for select employees – including young P.R. staffers and officials who leave after just a month on the job.

If there’s a poster child, however, for the way in which the pay expectations of the top 1% have perniciously wormed their way into the McCrory’s administration over the past year it would have to be a recently departed contract employee of the Department of Health and Human Services by the name of Joe Hauck. As NC Policy Watch Reporter Sarah Ovaska explained yesterday in a summary of an Associated Press story by Michael Biesecker, Hauck pulled in $310,000 from the Department of Health and Human Services over the past year.

“The Associated Press had this report over the weekend about the slim amount of work product taxpayers received in exchange for $310,000 paid to a contractor with personal connections to N.C. Health and Human Services Secretary Aldona Wos.

Joe Hauck, who has since returned to his previous job working for a company owned by Wos’ husband, was one of several controversial expensive hires and personal services contracts Wos, a Greensboro physician and Republican fundraiser, used to build her executive team.

In the year Wos has led DHHS, several of her top hires have departed, including then-24-year-old McCrory campaign worker Ricky Diaz who earned $85,000 a year as  Wos’ communications director, and Carol Steckel, who worked as the state’s Medicaid director for eight months before leaving her $210,000-a-year job. Wos’ former chief-of-staff Thomas Adams received a $37,000 settlement payment after spending just a month on the job, despite state hiring practices that bar severance packages in such situations.

AP reporter Michael Biesecker first requested records related to Hauck in September and recently received a pair of memorandums from the agency no longer than three double-spaced pages as evidence of the 11 months Hauck spent working at the state agency.”

According to Biesecker:

“Hauck’s consulting contract at the state health agency paid him an hourly rate of $125.

To earn the $310,000 he was paid through Nov. 30, Hauck would have had to average 54 hours of work every week, taking no vacation or sick leave, for 46 straight weeks. Hauck worked the final three weeks prior to his Dec. 20 departure for $1, according to the agency.

All told, Hauck was paid $41,000 more than the annual salary of the department’s highest paid state employee, who is a medical doctor.

Ironically, one of the primary money-saving measures Hauck is credited with during his time at DHHS is a proposal to curtail the agency’s reliance on highly paid temporary contractors and costly overtime by hiring more full-time state employees and reducing high turnover.”

What were they thinking?

It’s hard to know what’s more troubling in all of this: the fact that a supposedly civic-minded person would accept such outrageous amounts of money as somehow justified or that public officials would presume to dispense such largesse in all of our names in the first place. Whichever the case, both are sadly indicative of what happens when people with Wall Street values take over on Jones Street – the home of North Carolina government.

In the twisted world of modern capitalism, the imperial CEO is ruler of all he or she surveys – able to command royal sums even as average workers are downsized, outsourced and forced to accept lower pay and reduced benefits. “This is the way of the market,” we are told by those same overlords and their apologists in the far right think tanks.

And so that same mindset infiltrates public service like some kind of especially toxic and destructive form of intellectual kudzu. Raised as they are in a world of “greed is good,” “grab all you can get” casino capitalism, it’s no wonder that businessmen and women bring the same delusional “me-first” attitude to government. “This is the key to efficiency and running government like a business,” goes the mantra. “I deserve to be paid top dollar.”

Likewise, it’s no surprise that people of the same ilk can look into a camera with a straight face and question the very premise of minimum wage laws. After all, if those low income slackers would just get off their backsides and produce, they too could bring in the big bucks.

Going forward

So, is this noxious mindset here to stay? Is there any antidote to the “if it’s legal, it must be moral” ideology of the market fundamentalists who currently stand astride the North Carolina policy arena?

A look around indicates that there is reason for hope. For all of the conspicuous consumption and noxious inequality that permeates the modern economy (and the cynicism it has bred in so many circles), most members of the 99% still know the score. They know that the Joe Haucks of the world symbolize a societal illness and ache for leaders who will fight against it.

As the amazing popularity of Pope Francis I and his campaign against the excesses of modern capitalism have made clear, most people know instinctively that the corporate emperors (and their errand boys and girls in the world of politics and punditry) wear no clothes. All that’s needed to dispel the present illusion is for a handful of voices to shout out the truth.

Let’s get to work.


March 4, 2014 at 9:16 am
Richard Bunce says:

... and there is nothing worse than government for decades now for all the complaints you have about government and the private sector recently. Worse is at least from most private sector operation we get something of value while from government we not only get no value but we get harmed in our lives.