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Sunday, June 06, 2010

In the old days, they used to distort the meaning of text by removing context.

Now we have gotten to distorting the meaning of context by removing the text.

I think the current discussion includes one zombie removal of the main point on the order of "Al Gore claimed he invented the internet."

Here the admirable Frank Rich includes it in an excellent, outstanding, wonderful op-ed which is based on valid criticisms of Obama's excessive respect for experts and trust in capitalists and this canard "Lloyd Blankfein of Goldman Sachs was praised by the president as a “savvy” businessman two months before the Securities and Exchange Commission sued Goldman."

OK first of all, being savvy is perfectly consistent with being a crook. Savvy is one step from sly. Savviness does not imply public spirit or even honesty.

More importantly, the point of Obama's full statement was that CEO compensation should be reformed.

The full question and answer

Q Let's talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?

THE PRESIDENT: Well, look, first of all, I know both those guys. They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system. I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.

Note that Obama is clearly not saying that we shouldn't ever begrudge anyone success or wealth. In particular, he went on to say that some managers have received more wealth than they earned or would have gotten if the ownders of the firm decided their compensation (as in, you know, the capitalist system in theory). His position clearly is that we shouldn't begrudge everyone who is successful and wealthy their success and wealth.

The followup question and answer

Q Seventeen million dollars is a lot for Main Street to stomach.

THE PRESIDENT: Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don't get to the World Series either. So I'm shocked by that as well. I guess the main principle we want to promote is a simple principle of "say on pay," that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay. The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs' success and ultimately will make the performance of American businesses better.

My bold on "as well" which logically implies that Obama is shocked by CEO pay. And note practical proposals for reform. That is the substance of the reply. The bits about "savvy" and "begrudge" are just niceness to soften the blow.

Yet the parts which are quoted are "They're very savvy businessmen", "And I, like most of the American people, don't begrudge people success or wealth" and "Of course, there are some baseball players who are making more than that"

Part of the problem is that the interview was first reported not with a transcript but with a Bloomberg story by Julianna Goldman and Ian Katz. They didn't suppress the policy proposals entirely, but they buried them quoting "begrudge" twice before they quoted "'say on pay'" or "in the form of stock." Once they quoted the word "begrudge" all by itself removing context and building a sentence around it. This is extreme journalism, but, as far as I can tell, everyone but me and Brad DeLong accepted the lede at face value.

The policy proposal was deleted by most people who quoted Obama (including Rich in his op-ed). Instead the polite introductory throat clearing was quoted.

"Style not substance" and "words are more important than actions." are the mottos.

Dibgy and Rich are outstanding compared to most commentators in the USA. However, I think they both accepted those mottos yesterday.

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