I am watching the parade of outraged leaders--especially Democrats--who are railing about the AIG bonuses and, to be honest, I'm far more disgusted by the outrage then the chump change being argued over. Because the outrage masks this fact: virtually our entire political and economic leadership has turned a blind eye, and actually endorsed, a vast legalized robbery that has taken place over 30 years in the corporate suites of America. And I fear that, once we've sated ourselves over AIG, Bernie Madoff and a few other deserving targets, not a whole lot will change.
Of course, it's entirely appalling that these AIG guys who failed are being rewarded. But, let's review some facts that I've collected in working on a just-finished book "The Audacity of Greed".
This very robbery has been taking place for much longer than the current crisis. In 2007 alone, the pay and bonuses for the top 200 CEOs totaled more than $2.3 billion.
$2.3 billion for 200 people.
Where was the outrage then?
While everyone else who worked at their companies was looking at a perilous retirement, these 200 fortunate folks pocketed lump sum pension benefits totaling almost $1.6 billion and another $1.4 billion in deferred compensation. They rang up another $1.3 billion in stock option gains and another $646 million in stock award gains.
Where was the outrage then?
Those 200 people held—-prepare for this one—-stock valued at $1.4 trillion at the end of 2007.
$1.4 trillion.
For 200 people.
Where was the outrage then?
Now, some people would say: oh, the difference now is that it's our tax dollars are at stake.
Wrong. Our money was at stake for three decades: all that deferred compensation is paid for by you and I because there were tax advantages to deferring the compensation.
But, more important, we have been paying for it in another way.
They robbed millions of families of a decent living and a decent retirement—so they could enrich themselves. CEO greed meant a whole lot of people worked their butts off and had very little to show for it, forcing people to rack up mountains of debt on their credit cards or leverage the value of their homes to get a new line of credit—not to buy a second home in the South of France or pick up a multi-million yacht but to pay for health care, college for their kids, care for an aging parent or just to meet the daily bills.
For decades leading up to the early 1970s, workers got paid, more or less, in proportion to the sweat they poured out on the job—productivity (how much faster or cheaper a worker turned out a product in the same time) rose and, so, did wages. Then, in the 1970s, all that fell apart—productivity went up steadily and wages stayed flat...think of the giant open jaw of an alligator, with the top of the jaw, right up to the snout, showing productivity and the bottom of the jaw flat-lining, representing wages.
The trail of the benefits of that amazing productivity gain end right at the CEO’s bank account. By 2005, CEO pay was 411 times that of the average worker; in 1960 CEOs were "only" paid 41 times the average worker’s wage.
They ravaged companies, hollowing them out, breaking them up, sucking out their value and leaving them like dry husks–-so they could enrich themselves.
Where was the outrage over this:
I don't recall Senators or presidents marching in front of cameras to demand that CEOs stop paying themselves obscene amounts of money. The rap we here now is that the AIG CEOs and their cohorts don't deserve bonuses because times are bad.
Well, folks, if you were a working person in America, TIMES HAVE BEEN BAD FOR 30 YEARS!!! You were being robbed for three decades.
CEO greed meant that millions of people went without healthcare for themselves and their families.
CEO greed meant that communities throughout the country lost good-paying jobs when plants closed up and left.
CEO greed meant that millions of people lost their homes.
CEO greed meant that a whole generation of people who had been duped into substituting 401(k)s for real pensions saw their savings evaporate in a week of plunging stock markets around the world—all brought on by CEO greed.
These CEOs were accomplices in killing people. I mean that quite literally: because CEOs were too busy looking for ways to stuff their own bank accounts and chose not to cover workers with real health care, and because, in particular, insurance industry CEOs were intent on making sure they could enrich themselves, people either could not get health care or received shockingly low-quality care and, thus, died from inadequate care or died too young because they never were able to afford to see doctors who might have provided preventive care for treatable diseases.
Now, there was no outrage then because this racket was blessed, promoted and even praised by politicians across the ideological spectrum, and by both major political parties. Justified and tolerated for the sake of the glory of the "free market". Accepted by the public, more or less, because, as long as an actual law wasn’t being broken, people were told that, well, this was just part of the wonderful American "free market" and, just like the CEOs, everyone aspired to one day be wallowing in such riches. You were part of the bigger picture of American prosperity.
It was all covered up by a thirty-year flogging of a world view that we now know is entirely bankrupt: that our society’s well-being should be governed by an ideology called "the free market" when, in point of fact, there was no such thing as "the free market". It was a marketing phrase used to cover up a relentless plundering of the country’s prosperity, which was funneled into a small number of hands, creating the deepest divide between rich and poor in more than a century.
So, count me as one person who will be impressed by the outrage when, and only when, we have a top-to-bottom rewriting of the rules that have governed the so-called "free market".