The news this weekend that prominent French Socialist policitian and International Monetary Foundation head Dominique Strauss-Kahn was arrested for assault and attempted rape has made headlines all over the world. Strauss-Kahn is obviously in deep merde, as there is apparently possible DNA evidence linking him to the crime, not to mention the fact that he left his $3,000 a night hotel so quickly for his first class plane flight that he left his cell phone behind.
Strauss-Kahn has been criticized in the French press for living a life of luxury, replete with expensive cars, multi-million dollar houses, and suits that cost in the neighborhood of $10,000. There is nothing wrong with a socialist indulging in such luxuries; after all, Strauss-Kahn makes more than $420,00 a year (as of 2007 - he gets annual increases tied to the Consumer Price Index), and earns an allowance of $75,000 per year after taxes to maintain "a scale of living appropriate to your [his] position as Managing Director" of the IMF." To ensure a comfortable retirement, Strauss-Kahn also gets a supplemental defined pension benefit on top of his normal pension.
The $3,000 a night hotel room Strauss-Kahn stayed in could easily have been paid out of his allowance or salary. It wasn't. SK's employment contract provides as well that he will be reimbursed for travel and hotel expenses. So the $3,000 a night hotel was paid by the IMF, as would have been the first-class transtlantic flight. To be fair, an employee should not have to pay for his own hotel room and flight if he or she is somewhere on business. However -- $3,000 a night?! That doesn't seem like a reasonable business expense to me.
The bigger picture here, though, is the incredible gulf between those who make and set policy and the rest of us. The IMF has been very insistent on everyone else tightening their belts and reducing deficits, even if it means salary and benefit cuts for workers. The IMF has been very critical of pension benefits in the public sector, urging cuts in nearly every country into which it intervenes. Yet here we have the head of the IMF not only making nearly a half-million dollars a year, but also getting for himself an enhanced pension benefit.
An argument can of course be made that one needs policy makers to be objective, to make policy based on what is best for a country rather than what is best for its workers. And yet the extent to which our leaders are out of touch with workers is disturbing -- something like 60% of the US Senators are millionaires, as are 40% of Congressmen. This compares to 1% of the rest of us. Whose interests do you think they have at heart when voting on taxes for the wealthy and eliminating the estate tax?
I don't know whether Strauss-Kahn tried to rape a maid in a Manhattan hotel room or not. If he did, that is a crime for which he should go to jail. People are understandably outraged about the allegations. I'd also like to see a little outrage at the disconnect going on between those who preach austerity to the rest of us from their $3,000 a night hotel rooms, while waiting to collect their own enhanced benefit packages.
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