This story was written by Lew Griffith, The University News
Current CEOs at large financial institutions feel that they are entitled to taxpayer money. Apparently, so did many members of Congress, as they approved a bailout of Wall Street with a $700 billion check, no strings attached.
Now, the auto industry wants in on the bailout bonanza being handed out by the government asking for $25 billion. Fingers are pointed, blame is spread and executives make excuses for the economic downturn, but the real reason has not been named.
Greed, entitlement and avarice have gripped the country leading to a downward spiral of more than the American economy, but the American soul.
"Greed is good," said Gordon Gecko in Wall Street, a movie from the late 1980s that summed up a generation of stock brokers, corporate raiders and venture capitalists looking to make the big bucks at any expense. This is nothing new-American expansion was based on greed to make big bucks by such industrialists as Commodore Vanderbilt, J.D. Rockefeller and Sir Walter Raleigh.
Cheap land, lax laws and even less law enforcement made it possible to garner huge sums of wealth off the backs of the working class. Anti-trust laws came into effect to regulate shady business practices and unions organized to protect the workers.
Labor-management, management-labor, give-and-take, for hundreds of years, but now there has been a lot of taking by management and it has come home to roost with the down economy.
In 1989 the average CEO salary with bonuses was $2.3 million, compared to a current average of $12.8 million, a 456 percent increase in 19 years. The average income for 1991 was $40,873 compared to $50,233 in 2007, not quite a 456 percent increase is it?
The justification for these exorbitant salaries is retention of talent, lack of qualified talent and reward for years of hard-work under market value. I agree that there is a lack of qualified talent on Wall Street as evidenced by the huge mismanagement of funds leading to a meltdown.
If this is the case, why do the same people responsible for the meltdown get a bonus? A reported $108 billion of the first $125 billion has been used for bonuses, pay and perks to companies such as AIG, Goldman-Sachs, Lehman Brothers and Bear Stearns.
The usual rhetoric that these bonuses came from other funds and profits and not taxpayer subsidized loans being used. If not for the bailout, many of these companies would have record losses. Once again it is a case of greed; the CEO's have to get theirs before anyone else gets theirs.
Now the auto industry has come to Washington looking for a handout, I mean bail out. The "Big 3" of Detroit are nice enough to carpool by using one private jet for their trip to D.C. to ask for our money. This is equivalent to the local homeless walking up to the corner to panhandle wearing a suit, tie and nice watch, not going to cut it.
This capitalist crucifixion is not entirely upon the hands of the CEO, but blame also lays with us, the consumer.
The belief that more and better will fix everything has contributed to the current downturn. A new HD flat screen, a Wii, another pair of shoes and an extra large mocha with a shot of espresso to go will do.
In the last five years a third of workers have more in credit card debt than they do in retirement savings. Interest of 23 percent be damned, I need a Dolce & Gabbana bag now.
We have become obsessed with keeping up with the Joneses and it we have the nice things to show for it as well as the bill. Materialism is greed's little brother and just as annoying as your little brother.
What do we do now? Hopefully a little of the original, can-do, pioneering American spirit sill exists. Thoughts of living within our means, saving more and spending less on frivolities are what we can do. As a nation we have to continue to question CEO pay, how taxpayer money is spent and to press Congress to monitor our money. No more no-strings attached bailouts can be allowed to go to companies that have managed to lose billions of their own money, let alone ours.