Chinese oil refining giant Sinopec has demoted a top executive who bought 1.6 million yuan ($245,900) of wine and spirits after details of the purchase leaked onto the Internet and sparked an uproar over extravagance at the state-owned firm. Sinopec, which is Asia's top refiner, said Monday that it had demoted Lu Guangyu, who was general manager at the company's operations in the southern province of Guangdong, for "seriously harming Sinopec's image." [...] Some of the bottles cost almost 12,000 yuan each -- far more than the average Chinese earns in a month.
Not pretty. That sounds like betrayal of a public trust to me ... telling, isn't it, that the offense is reported not as doing a bad thing, but harming a company's image? Sigh.
Putting the yuan to dollars and U.S. to China comparisons in some perspective, we might start by noting that 12,000 yuan is a bit over $1800 these days. To wrap our heads around the assertion that this amount is what "the average Chinese earns in a month," we'd naturally want to ask how the sum compares to what the average American earns.
Well, turns out that more than 1/3 of people in the U.S. over 15 years old (i.e., of work-eligible age) earn less in a month than the cost of just one of those top-notch bottles of Moutai, according to the Census Bureau's Current Population Survey (2009). Just like "the average Chinese." Outside small cities, the U.S. median is barely a shade over $1800/month ($1829.91) according to the same survey, which puts that sector of Americans-who-earn pretty much in a dead heat with "the average Chinese." It's a small world after all.
On the same day the quoted article from Reuters was datelined, I happened to attend a presentation by some astrophysicists who work at the Lawrence Berkeley Labs, called New Light on Dark Energy.
Stay with me here.
There was a lot of talk about how astrophysicists sift through evidence to test theories of how the universe works, particularly whether the universe is expanding or contracting (latest evidence suggests it is expanding, and the expansion is accelerating). The evening's details are more than could possibly fit in this blog post, but I mention it because the astrophysicists talked a lot about how they identify data applicable to interesting problems from all the other data that gets collected by big, expensive instruments like the Hubble Telescope and projects like the Sloan Digital Sky Survey. A primary concern of astrophysicists, then, is to separate signal from noise.
I'd like to suggest that thinking about top executives of Chinese oil firms who spend nearly a quarter of a million dollars of (state-owned) resources on expensive booze is related to this very problem: separating signal from noise. It's weird convergences like this -- attend an astrophysics presentation in Berkeley, read about a corruption scandal in China -- that gives birth to blog posts. At least this blogger's posts....
Matt Taibbi reported in the 17 Feb 2010 issue of Rolling Stone that in 2009 Goldman Sachs "set aside a tidy $16.2 billion for salaries and bonuses -- meaning that Goldman employees were each set to take home an average of $498,246," this only a few months after the bank repaid billions of bailout funds advanced by you and me, through our sycophants in Washington. Oops! I mean, our democratically elected government. Taibbi's article explained how Goldman Sachs and their ilk pawned bailout funds into massive, unproductive, some might say fraudulent profit before squaring the books with Uncle Sam:
Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve. "You're borrowing at zero, putting it out there at two or three percent, with hundreds of billions of dollars — man, you can make a lot of money that way," says the manager of one prominent hedge fund. "It's free money."
Something to think about, isn't it? That too sounds like betrayal of a public trust, don't you think? Want more? Lots more? Read the article.
Or just sit back, relax, and check out Taibbi's take-no-prisoners rhetoric excerpted right here on One Finger Typing:
A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble? The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.
Each of those average Goldman Sachs
Anybody have a count of how many of the Goldman Sachs employees were demoted for their parts, individual or collective, in causing a world of economic pain in order to feather their own nests???
Perhaps you remember when the NY Times reported in early 2010 that:
No one was crowing about their big paychecks at Goldman Sachs headquarters in New York on Thursday. Despite a record 2009, the bank announced that it had set aside only $16.2 billion to reward its employees.
Did this news make you feel sad and sympathetic for those poor, suffering, unable-to-crow Goldman employees? Have you ever noticed that "Goldman" is an anagram of "Goldamn"?
Here's Roger Ebert in the Chicago Sun-Times a few weeks ago on the theme of big paychecks:
If it is "socialist" to believe in a more equal distribution of income, what is the word for the system we now live under? A system under which the very rich have doubled their share of the nation's income in 25 years? I believe in a fair day's work for a fair day's pay. Isn't that an American credo? How did it get twisted around into an obscene wage for shameless plunder?
Good question, Mr. Ebert. Ain't America great?
China's still got a loooooooooooooooooong way to fall if buying liquor at $1800 per bottle out of a state-owned enterprise's funds is the worst their executives can do.
(It's not, of course. Lu Guangyu may well be a scumbag, but he's only the sort of scumbag who gets sacrificed publicly to divert attention from the crooks in charge. Noise, you know, floated in the media in order to drown out the signal. That never happens here, right?)
Thanks to Mark Bussinger for the Moutai photo obtained from Wikimedia Commons.