When reports spread that insurance giant AIG would give top executives huge bonuses after a $170 billion taxpayer bailout, you could feel the anger rumbling in Middle America like boiling magma before the eruption of a volcano.
Many top officials of the Obama administration were beside themselves with outrage.
And just imagine how protestations from AIG's CEO about its "contractual obligations" sounded to UAW workers who are being asked once again to modify their contractual agreements to keep the auto industry in business. But the titans of the financial sector seem to have very different standards for themselves and the rest of the American economy.
Recall that these bonuses are going to executives at AIG's financial products division -- the very unit that wrote trillions of dollars of "credit-default-swaps" that insured investors against defaults on bonds backed by sub-prime mortgages. The problem was that AIG used a loophole in the law to argue that the "credit-default-swaps" were not really insurance, so they weren't required to abide by insurance laws which would have assured that they had the capital on hand to pay claims when defaults actually occurred. That caused AIG to collapse and helped precipitate the global financial crisis. Seven of these executives get from $3 to $6.5 million. So much for responsibility.
Now the CEO of AIG has the audacity to argue that it has to pay bonuses because, if AIG loses it best employees, it would be harder for the company to recover and help the government recoup its investment. These are the best and the brightest? Could the gang in the financial products division of AIG done any worse? They helped precipitate the worst economic collapse in more than half a century.
But the really important thing about the AIG bonus scandal is that it is emblematic of the need to fundamentally change the culture of Wall Street and the American economic elite in general.
In 1987 Michael Douglas starred in a film called Wall Street where he famously intoned: "Greed is good."
That has been the motto of the American financial sector for the last thirty years -- and it became the accepted moral frame for much of American economic and political dialogue -- culminating in the "markets uber alles" philosophy of the Bush years.
The "Greed is good era" is over. It died on September 15, 2008 with the collapse of Lehman Brothers and the right wing myth that if everyone looks out for his own self interest the "invisible hand" would assure that the public interest would take care of itself. More than Lehman Brothers went bankrupt that day. So did Wall Street's entire system of "greed is good" values.
In fact, of course, "greed" was never "good". The ethical and religious teachings that have evolved over thousands of years of human development don't hold up "greed" as a value. The minister, priest, imam or rabbi doesn't get up on the Sabbath and encourage his congregates to go be "greedy".
Commitment to others -- commitment to our country -- selflessness -- that's what is good. Most everyday Americans understand that to their core. They get chills when they hear about the soldier who sacrifices his life for his buddies. They are inspired by the doctor who devotes himself to heal people who can't afford health care.
They know instinctively that hard work -- and sacrificing for your kid's future -- and teaching the next generation -- and inventing cures for diseases because they will help other people -- and creating something that is beautiful, or improves the lives of your fellow human beings - those are the things that are "good" and should be valued by our society.
They know that the highest calling of human beings is not to go make as much money as you possibly can, but rather to live a life of service to other people.
Normal people know that, but it has been completely lost on the Wall Street crowd and the American economic elite. They see no contradiction to paying CEO's of hedge funds $450,000,000 while day care workers make $19,000 a year. They think it made perfect sense for Martin Sullivan, the former CEO of AIG to have received a $47 million severance package when he retired from the firm as the financial tsunami swamped his company last summer. They are the first to urge UAW employees to lower their middle class pay, but don't hesitate to dole out $6.5 million to people whose actions lead AIG to disintegrate.
Last week an analyst for government-bailed-out Citicorp had the gall to argue that the Employee Free Choice Act would be bad for the economy because it would allow more everyday people to join unions and raise their wages -- this from a company that gave its retiring CEO a $29 million retirement package just last year.
The sense of entitlement is awe-inspiring. But the failure to understand the values and economic circumstances of average Americas is even more breathtaking.
In fact, of course, the notion that "greed is good" is just so much self-serving drivel. It has nothing to do with the traditional progressive values that have always defined what is best in America. It has nothing to do with "good" -- only "greed".
Future generations will look back on "greed is good" values the same way that we now view the ethical systems that once legitimated the view that "slavery is good" or that it is right for a king or emperor to conquer and dominate others through military force.
The good news is that out of the ashes of the "greed is good" world view, a new ethic of service, sacrifice, responsibility, patriotism and hope have swept America. It is up to all of us to reestablish those traditional progressive values as the bed rock for political decision making at this critical time in the history of our country and our planet.
Robert Creamer is a long time political organizer and strategist and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.
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I'm 60. I work hard and save. 32% of my retirement fund just vaporized in 9 months; I haven't even gotten the first quarter report yet. No telling how many end tables I bought; probably only two or three.
Cut them off now; no more income. they can sell what they have already and live off that. I would rather see them living in a $500 rental house, driving a broken down Subaru and working at Taco Bell. Maybe that would rehabilita
It could happen even sooner. Just think about what kinds of people nowadays arrive at the conclusion that chasing short-term shareholde
On the other hand, even if it happened yesterday (and maybe it did), it wouldn't be a moment too soon.
Along with "greed" we need to look at "risk". Up to about 20 years ago there were equities know as "widows and orphans stocks". They paid regular dividends (often for decades without fail) but only grew in stock value slowly. Low risk -- low , but sure, reward. These were in many industries including banking. At some point, banks decided that they had to compete with "high risk" stocks. When companies start earning significan
Also, after reading a few other comments here, I have to say this: Do not confuse moderated and perfectly healthy self interest with greed. Greed is a destructiv
Societies thrive when people help each other help themselves
* (Depending on how one accomplish
It's time to cut our loses and take our chances...
Aig was last yrs business, Omininous bill last yrs business I personely think both are wrong but this is business as usual for both Aig and President so who can through stones???W
As Adam Smith said:
“It is not from the benevolenc
Excessive greed is punished by the free market. We do not need Government to do that.
All these excessivel
Then big Government stepped in and used taxpayer funds to prevent the free market from punishing excessive greed. It enabled these greedy irresponsi
It ended up creating perverse incentives where it pays to be excessivel
The fact of the matter is that excessive greed without outside regulation (such as that performed by government
Only, in reality - where colorful characters such as Ayn Rand, Karl Marx, and yes, even Adam Smith (though he was very, very bright) only lived part of the time - it doesn't work that way. Often in the process of running these companies into the ground, as we've seen, these individual
Who really gets punished? The business, the employees, the clients, the shareholde
If you regulate the market so much that booms and busts don't happen, you get stagnation
The market would have punished the excessivel
We may attempt to think of private enterprise as a competitiv
We've let our private sector evolve such that creative destructio
We're all in this together. One bad apple can ruin it for everybody, triggering ripple effects that spread devastatio
I agree that the failure of major banks would have been bad for everybody. In the short run, we would have suffered a lot more pain than we now are.
But what is happening now is going to make it worse in the long run. We will feel the affect in the form of slower growth rates in the long run.
Also, we are rewarding the biggest culprits which is going to create a moral hazard.
Our shortsight
Ambition is what we want in a free enterprise economy.
We want people to look upon the world and find the greatest way in which they can contribute to the bounty and glory of human civilizati
Wealth should be a reward for ambition, but instead it is a reward for greed.
Greed is a degenerate case of ambition where the ambition is to accumulate wealth. Greed is the subordinat
The fundamenta
If we pull our wealth out of investment funds and commercial banks and deposit it with credit unions, and if we adopt a debt-free national fiat monetary system based on Benjamin Franklin's model, I believe a free market economy would actually work.
AIG = All in Greed.
AIG = Arn't I Greedy.
AIG = A$#holes, in general.
This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermor
http://www
Not to make excuses for these people, but the bailouts are making crooks out of everyone that touches the money.
Aside from the fact that you meant "congregan
The problem is that it has not swept those it needs to sweep! What makes them feel their knowledge, the schooling and experience required for their job, the decisions they make, worth so much money in exchange for? I remember when CEO's argued they were worth more then a big name sports figure and today they are making such. They produce nothing but paper profits, ways to make packages of so called "value" so to create more steps in the chain from which to take commission