A reader, Don Mayer, drew my attention to a recent Seattle Times/ NY Times article on the distribution of funds to hospitals from the Cares I Act. Case in point is the Seattle-based Providence St. Joseph Health Care System. Here’s the “money line” so to speak:
“So far, the riches are flowing in large part to hospitals that had already built up deep financial reserves to help them withstand an economic storm. Smaller, poorer hospitals are receiving tiny amounts of federal aid by comparison.”
The Providence system has in its hedge fund investments and venture capital accounts, cash on hand of $12 billion. It turns a tax-free profit of $1 billion. Nevertheless, Providence received $509 million in relief funds from the federal government.
But here’s what jumped out at me. In the next to last line in this longish article we learn that Dr. Rod Hochman, CEO of the Providence System, is paid in excess of $10 million a year. That would be enough, the article notes, to cover an entire month of operations at one of America’s cash-strapped public hospitals.
A little further research turned this up: the 15 members of the Providence executive team have an average per-person annual salary of close to $3 million. This, mind you, is a health-care system that describes itself as “faith-based,” and enjoys not-for-profit status and tax exemption.
This brought to mind a discussion I had listened to recently on Econtalk.org with author Martin Gurri. Gurri is the author of the 2014 book, The Revolt of the Public.
One of Gurri’s themes seems apt in light of CEO Hochman’s $10.5 million annual pay and the pay levels of others on the Providence executive team. It is what Gurri calls, “The betrayal of the elites.”
Gurri observes that “elite” is not an intrinsically negative word. On the contrary, it means that you are the best at something. It meant you were in some sense “admirable.” To be among the elite entailed service and sacrifice. You actually had to give some things up!
No longer. Elite status no longer connotes responsibility. It no longer carries with it the expectation of giving up something to serve in a role of leadership. Nowadays, to be elite is not a “privilege implying obligation,” said Gurri, “it is a prize.” It means you are the big winner and you get all the toys. Now, I don’t know Dr. Rod Hochman. He may be a nice guy. But it just seems to me that something is amiss when a physician, who says he works for a “faith-based, not-for-profit,” makes $10.5 million a year.
Gurri says that what being elite means in our society is that you are able to get away from other people. The elites live, says Gurri, “these fantastic, bizarre lives that make no sense to real people.” And that is good part of what drives the enormous level of public discontent, what Gurri terms, “the revolt of the public.”
While this all started before the 2008 crash, that event exposed how bad it was. The Washington Mutual Bank CEO Kerry Killinger was making something on the order of $40 million a year, while driving what had been a respected community bank (“The Friend of the Family”) to become one of the nation’s biggest mortgage machines and ultimate disaster.
In Nicholas Lehman’s Transaction Man (2019) he devotes a good deal of attention to the once venerable Morgan Stanley investment bank. By the 90s those running the show operated by a principle summed up in the acronym IBGYBG, meaning that by the time any bad consequences of our short-term profit-seeking show up, “I’ll be gone and you’ll be gone.”
Gurri argues is that our elites — in business, academia, politics, and entertainment — are at such a distance from ordinary people that they live in a strange, separate reality. The old idea that being elite entailed some kind of responsibility to live a life of service died somewhere along the way. To be elite is not to be uniquely gifted. It is to have so much wealth that you can put a huge distance between yourselves and others. This is, says Gurri, “the betrayal of the elites.”
One further note. I have often written on a theme I’ve referred to as the “decline of liberal Protestantism.” I think it relates to this. For a long time, people with wealth and privilege were reminded, in churches, that with the blessing came responsibility. “To whom much is given, of him much is expected,” to quote the Gospel of Luke.
One aspect of the decline of liberal Protestantism has been the disappearance of the elite from mainline Protestant churches. Sometimes I would meet such people who were never anything less than charming. They would say, “If I went to church, I’d go to your church.” But the social expectation to be part of a church had vanished. And so had they.