The Truing of American Capitalism

Posted on March 20, 2009

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The wailing and gnashing of teeth emanating from Wall Street, and parroted by Republicans on Capitol Hill, is hurting my ears. The uproar over executive bonuses is loud but disingenuous!

Look, the game is up! The bubble has burst, the market has crashed, the economy is in crisis. Capitalism has run wild. The people want change. President Barack Obama and Treasury Secretary Timothy Geithner must deliver it! Economic recovery is not about saving the corrupted form of capitalism. What we need is a better and truer capitalism.

The princes of Wall Street are crying out in pain because their pride is hurt; their extravagant incomes and lavish lifestyles are at risk; their plundering of the economy has been laid bare for all to see. The commoners no longer respect their right to live like royalty.

American capitalism has become a sort of economic feudalism in which the working class and the middle class pay tribute up the line to the affluent and the wealthy. The fruits of hard labor by the lowly serfs are handed over meekly to the lords of the manor. The lords pass most of the profits on to princes and kings. And the kings use the wealth to live in privilege, support a large military, and corrupt the political system. The transfer of wealth from the middle to the top has been documented (and mostly ignored) for three decades.

In recent years, executive compensation has come under fire. It was widely reported that CEOs, CFOs, and vice presidents were rewarded with million-dollar salaries, jet planes, bonuses, stock options, golden parachutes.

The accepted dogma was that executive compensation was set fairly by the sacred marketplace. That was the lie. If executives could get it, then it was rightfully theirs. It would be against the law of nature for government to set limits on corporate compensation. Many in the political class were complicit, because they were in on the transfer of wealth, via political contributions and revolving doors. Stockholders might rein in extravagant salaries and bonuses, but the stockholders were in on the transfer of wealth, too. Stockholders were mesmerized by rising stock prices and the inflation of their net worth.

Now, weekend bailouts and humongous recovery packages have unfolded before our eyes.

It is almost unbelievable, but the princes of Wall Street (and many of their lackeys in Congress) expect to use the financial bailouts to continue the transfer of wealth. They want to use millions from the lowly taxpayers to continue business as usual. The money is transferred from bank to bank without accountability, and it disappears into a bottomless financial pit.

Of course the lords and princes expect their tribute, their bonuses, to continue. They think the plunder is rightfully theirs!

Will Wall Street succeed in extending feudal capitalism for a few more months or years? Or will President Obama and Congress succeed in forcing change? If the economic recovery billions are spent wisely, we can achieve a truer capitalism, based on fairness instead of greed. — Bernie Hayden

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