Huffpost Business

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Joseph A. Palermo Headshot

AIG and the Undeserving Rich

Posted: Updated:

Charles Blow, the "moderate" who seems to write a lot of words but never takes a clear stand on anything, recently lamented on the op-ed page of the New York Times about what a small matter the $165 million in bonuses really were compared to the $170 billion AIG received in government welfare. Sheryl Gay Stolberg followed with a chirpy op-ed in the "Week in Review" where she quoted Ed Gillespie, Bush's former uber-handler, implying the whole dust up is just a "distraction." The knaves over at CNBC trumpet the Wall Street party line with the same level of discipline and enthusiasm that Maoists showed during the Cultural Revolution. But the sages of the mainstream media are totally bought in. And they're wrong because they're totally bought in. And here's why they're wrong:

1) The $165 million in bonuses are assumed to have been handed out in a good faith effort to hold on to talent or reward those who are "winding down" the books in the "financial products unit." But the whiff in the air is the distinct odor that these bonuses were not handed out "in good faith" for services provided but just another round in the epic rip-off of tax dollars that we've seen from all the other banks that received taxpayer money. Millions of Americans do not believe AIG doled out these bonuses "in good faith," nor do they believe the banks are acting as honest "stewards" of the public's money.

2) AIG's CEO, Edward Liddy, told Congress and New York Attorney General Andrew Cuomo that he couldn't divulge the names of the executives who received the bonuses because they've had death threats. I don't believe this line. More likely AIG refused to release the names because those who pocketed the cash are already fabulously wealthy and the idea of Uncle Sam augmenting their private fortunes would rub most people the wrong way. If average folks could see how rich these people are they would be appalled that they collected one penny's worth of our taxes. Besides, if they're getting death threats they can afford to pay to hire some "security." There are plenty of former Blackwater (or "Xe") employees looking for work and many security guards and laid-off police officers and prison guards and Iraq and Afghanistan war veterans seeking employment right now who would love to be hired for the cushy job of protecting some Wall Street fat cat while he waits for his limousine to whisk him to another ski trip in Vail. These plutocrats could help stimulate the economy by using their taxpayer handouts to hire unemployed veterans instead of buying jewelry and baubles for their wives, mistresses, and "escorts."

3) The $165 million give-away to Wall Street high rollers has been done in a context of austerity for working middle-class people. Long before the current economic meltdown we've been told that the United States of America just does not have the resources to pay for health care for all of its citizens and that education must be cut and social programs eliminated, etc. because "we just don't have the money." Yet all the while Congress after Congress lavished blank checks for the Pentagon and billions of dollars in corporate welfare. The sky's the limit when we're funneling money into the war machine or throwing it at bloated Wall Streeters. It's not "trivial" or a "distraction" when there has been so many needs in this society that have gone unmet, neglected, or ignored. Why anyone would trivialize $165 million of public funds going into rich guys' pockets is anybody's guess.

4) And when did $165 million become a real yawner for the fiscal hawks? That kind of money could build and staff at least a dozen state-of-the-art medical clinics; or refurbish schools and hospitals; or pave roads, or go to research to cure diseases, and so on. That $165 million would have been spent better in almost any other pursuit than forking it over to the undeserving rich.

Beginning in the earliest days of the Reagan administration, the "greed is good" ethic came to dominate our culture, and continues to rule our political discourse. We still live in an era where Gordon Gekko, a fictional character from Oliver Stone's 1987 movie Wall Street, gives us more truth about what is really going on than all of the yakking heads on CNBC and the blathering on the editorial pages of Businessweek and the Wall Street Journal. Said Mr. Gekko:

The richest one percent of this country owns half our country's wealth. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own.

It is notable that according to the American Film Institute's list of the top fifty movie villains, Gordon Gekko, a Wall Street trader, ranks 26th, ten places above the sadistic murderer, Frank Booth, in David Lynch's 1986 movie, Blue Velvet, a kinky killer who inhaled amyl nitrate through a plastic oxygen mask while he cut people to pieces.

The existing climate of righteous taxpayer fury is why CNBC's Rick Santelli's play-acting of an angry "average guy" didn't hold water and why The Daily Show's Jon Stewart's take-down of CNBC's Jim Cramer was such a sensation. The business elites in this country, no matter how hard they try, cannot create a fictional "Joe the Plumber"-type character to fool working people. "Joe the Derivatives Trader" just doesn't cut it. The current crisis was a long time coming. For years unbridled capitalism has beat down and bloodied the working middle class in this country. It's not surprising that in this perilous time those chickens are now coming home to roost.