One interesting trait of elitists is that they show remarkable class solidarity, often more so than people of lesser means. Which may help explain why the Washington Post’s editorial writers penned three editorials last week decrying the populist outrage over the AIG bonuses.
Yes, the Post gave a nod of understanding to why the American people are furious over the idea of giving $165 million in bonuses to executives in the American International Group’s financial products division after that bunch helped set in motion the economic catastrophe which is driving millions of people around the world out of their jobs and homes and into poverty and destitution.
Also, the bonus money comes from the U.S. taxpayers who were forced to pony up about $173 billion to prevent the insurance giant from collapsing and possibly wreaking more havoc.
The very idea that super-rich executives living in mansions and enjoying pleasures and perks beyond the comprehension of the rest of us must be, in essence, bribed to stay in their jobs to clean up the mess that they created goes beyond galling to being unpatriotic, almost treasonous.
At a time when the United States is involved in two wars – demanding extraordinary sacrifices from soldiers and their families – and when American autoworkers are reworking their contracts to reduce their pay and surrender benefits, what is one to make of pampered executives insisting on lucrative bonuses to get them to stay on to undo some of the damage they caused?
One might lock them in a room and make them watch the HBO movie, “Taking Chance,” a story of a Marine colonel (played by Kevin Bacon) accompanying the body of Chance Phelps, a young Marine killed in Iraq, home to his family in Dubois, Wyoming. What is so touching is how average Americans show heartfelt respect for Phelps’s sacrifice as they encounter his casket.
Or maybe the Wall Street bankers should watch the opening 20 minutes of “Saving Private Ryan” as U.S. soldiers come under withering German fire as they storm the beaches of Normandy on D-Day. One might hope that today's privileged elites might get a taste of what real sacrifice is, not just surrendering a million-dollar bonus. But probably not.
When I think of these "masters of the universe," I recall the $2 million birthday bash that Tyco CEO Dennis Kozlowski threw for his wife on the island of Sardinia. Tyco’s shareholders footed half the bill for the party that featured an ice sculpture of David with expensive vodka flowing out his penis and a birthday cake shaped like a woman’s breasts with sparklers on top.
Though Kozlowski did go to jail for looting his company, President Barack Obama is right when he says that the “dirty little secret” is that most of the recent financial gamesmanship was “perfectly legal.” Most of America’s hot-shot hedge-fund managers and Wall Street investment bankers operate in a world of either light regulation or little expectation of accountability.
In that sense, they are very much like the Washington Post’s neoconservative editorial writers who swallowed George W. Bush’s Iraq War deceptions whole, demeaned Americans who dared to challenge the lies, and suffered no consequences for being wrong. [For details, see Consortiumnews.com’s “WPost Is a Neocon Propaganda Sheet.”]
If you’re part of the elites – whether on Wall Street or at the Washington Post – you’re apparently too big or at least too important to fail. You see yourself as part of a “meritocracy” that attended the right schools and knows so many of the right people. You’re entitled.
So, it should have come as no surprise when editorial-page editor Fred Hiatt and his team penned three separate editorials bemoaning the angry populism that greeted news of the AIG bonuses.
The first editorial on March 17, entitled “Bonus Blowback,” purported to share the public’s outrage but came down on the side of paying the bonuses. “We hope that the President is setting the stage to do whatever it takes to answer legitimate protests about AIG without adding to the existing dangers or jeopardizing the necessary rescues of the banking sector still to come,” the Post said.
The next day in an editorial called “The Big Bash,” the Post expressed stronger annoyance with the “’populist’ backlash” against the AIG bonuses. The Post wrote:
“No matter how morally satisfying, taking back bonuses now ... would probably accelerate the exodus [of AIG executives], with the likely effect that the country would lose much more money on AIG than it would otherwise. ...
“The relevant policy question here is not whether we feel like spending $165 million on bonuses; it is whether doing so will help wrap up the AIG rescue as cheaply and quickly as possible.”
By March 20, the Post editorialists were starting to fume, equating the irresponsibility of AIG’s risky bets on derivatives with the angry reaction from politicians and their constituents over the bonuses.
In an editorial entitled, “Washington Gone Wild,” the Post chastised Congress for trying to recoup the taxpayers’ money by imposing a 90 percent tax on bonuses at firms that took significant government bailout funds.
“By changing the terms of a deal months after it was entered into, Congress will show the government to be an unreliable partner, further draining confidence from the financial system and endangering long-term recovery,” the Post wrote, noting that “when then-Treasury Secretary Henry M. Paulson Jr. pressed many of those firms to take the funds last fall, government interference in their compensation systems was not part of the deal.”
The Post argued that it was time for politicians to show courage, stand up to angry voters, and defend the bonuses.
“Elected officials have a responsibility to lead, not just to pander; to weigh what makes sense for the country, not just what feels good,” the Post wrote. “The bonuses paid at AIG represent less than one-tenth of 1 percent of the bailout provided so far; recouping those funds will have no discernible fiscal effect.
“But it will help drive away the best talent at the firm, and despite all the glib messages of ‘good riddance,’ that is a strange action for an owner -- and the American public now owns AIG -- to take. But the real damage goes well beyond any effect on AIG.”
The Post said the American people must face up to the fact that Main Street can’t function without Wall Street:
“The economy continues to suffer from a shortage of credit. The government needs financial institutions -- including relatively healthy ones -- to take public funds that will then be lent to responsible businesses and consumers.”
The Post also wagged a finger at the White House.
“Rather than bringing reason to the debate, President Obama has stoked the anger,” the Post complained. “Perhaps Mr. Obama believes that only by lining up with an angry public now can he persuade it, and Congress, to approve the hundreds of billions more he will need to right the credit system.
“But he might have expressed his sympathy with public anger over irresponsible behavior in the financial sector while also steering the government in a more constructive direction. The absence of backbone on either end of Pennsylvania Avenue this week could carry a steep price.”
While the Post editors may have a point about political pandering, they might have directed more of their outrage at their fellow elitists on Wall Street, perhaps telling them that it’s way past time to recognize that their extravagance is a huge part of the problem.
For each multi-million-dollar bonus, for each lavish party, for each pricy commode, for each sleek corporate jet, for each luxury car snapped up by a 28-year-old hedge fund manager, that is money not going to build a new factory or finance vital research and development – which is, after all, why companies go to Wall Street, seeking funds to expand or to modernize.
Rather than respect its role in the American economy, it is Wall Street that has “gone wild.”
It has operated under the maxim: “the closer you are to the money, the more you get to keep.” That attitude is now engrained in the culture of the financial circles. These guys have convinced themselves that they are worth the tens of millions of dollars that they are sucking out of the productive economy.
As messy as outbursts of populism might be, they often are a necessary corrective to a system that has ceased to function as it was intended.
But the Post’s editors are too cozy with their brethren on Wall Street – they may share too much of what might be called a class interest – to understand how justifiably angry Americans are, furious at both the financiers who took the economy over the cliff and at the politicians and pundits who bogged the nation down in the bloody quagmire of Iraq.
Somehow, the United States must achieve accountability from all these sectors for their many sins of recent years. Not getting that accountability may be the biggest risk of all.
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com.
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This story was published on March 22, 2009.