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“The Brains” Thomas Nast
Recently Louis Uchitelle, one of the New York Times’ best writers, ran a story on America’s super rich. For me the story opened a window into the minds of those who run some of our largest corporations, a window few Americans have ever looked into. A glance through the clouded pane reveals the dim outlines of Bill Clinton and Franklin Roosevelt, the Glass-Steagall Act and a revealing glimpse of the Republican Counterrevolution. But to truly understand what is revealed requires a journey into the past to meet a tycoon from an earlier age, Andrew Carnegie.
The story coyly begins with a walk down the “Wall of Fame” of one of these billionaires, Sanford I. Weill, who according to Uchitelle made “Citigroup into the most powerful financial institution since the House of Morgan a century ago.”
The carpeted hallway leading to Weill’s office is lined with tributes to him, including a dozen framed magazine covers. The major trophy is the pen Bill Clinton used to sign the repeal of the Glass-Steagall Act of 1933, a move which allowed Weill to create Citigroup. More on that in a bit.
From his description of Weill’s office, Uchitelle’s story goes on to cunningly let today’s tycoons hang themselves with their own words. Those words reveal three major contradictions in their justifications for their wealth, contradictions which make our current tycoons Gilded Hypocrites.
HYPOCRISY # 1: I DID IT BY MYSELF (WITH THE PRESIDENT’S HELP)
One theme the billionaire’s echo stresses that everything they earned they earned because of their own efforts. Here is Weill:
People can look at the last 25 years and say this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.
Weill conveniently forgets that pen hanging on his Wall of Me. Bill Clinton’s repeal of Glass-Steagall wiped out one of the most important pieces of New Deal legislation. In the 1930s, many believed that runaway banks helped cause the Great Depression. Glass-Steagall forbid banks from getting into the investment business.
Clinton’s pen illustrates a tremendous shift in the Democratic Party from Franklin Roosevelt’s party of the “forgotten man” to the New Democrats who wobble down the middle of a constantly shifting road, from a party that believed in a level playing field to one that worships “triangulation.”
It also symbolizes a shift in the Republican Party which in the 1980s took a hard turn to the right driven by a Counterrevolution designed to wipe out the New Deal and legislation like Glass-Steagall. While Counterrevolutionary strategists like Karl Rove view the McKinley years as a golden age, today’s billionaires have a different perspective than the plutocrats of the 1890s.
Where the tycoons of the 1890s disdained most government aid (Carnegie and others did use it to bust unions), today’s CEOs have a different view. Far from being self-made man, Weill was revealed in a Frontline report on the repeal of Glass-Steagall as someone not averse to pleading for help from none other than the President of the United States.
Frontline pointed to an October 21, 1999 deadlock of the House-Senate conference committee charged with working out the final details of the legislation.
Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.
So the owner of the Hall of Me made a personal call to the President of the United States to ask for his help in passing legislation that would enable his company to become the largest financial institution in the world.
Could you or I do that? Could the poor people still suffering from Katrina? Or what about people suffering in the home mortgage scandals?
As for many of the other billionaires, former Federal reserve Chairman Paul Volcker told Uchitelle far from earning their money:
The great fortunes today are largely a result of the long bull market in stocks.
That bull market enabled CEOs to make huge fortunes on stock options, fortunes that had nothing to do with their performance.
HYPOCRISY #2: I WORK FOR THE FUN OF IT (AS LONG AS I GET PAID A LOT)
The second line the billionaires fed Uchitelle was:
I worked because I loved what I was doing.
Kenneth C. Griffin, who received more than $1 billion last year as chairman of a hedge fund, the Citadel Investment Group, declared:
The money is a byproduct of a passionate endeavor.
Later on when asked about the income tax Griffin squelched that idea with a curious defense:
I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.
HYPOCRISY 3#: I AM THE BEST IN THE WORLD AT WHAT I DO (BECAUSE I GET PAID THE MOST)
Today’s Gilded Hypocrites like to analogize their feats to those of professional athletes. One told Uchitelle that he was a unique talent like “Derek Jeter.” James D. Sinegal, chief executive of Costco, the discount retailer, has a different perspective:
Obscene salaries send the wrong message through a company. ‘The message is that all brilliance emanates from the top; that the worker on the floor of the store or the factory is insignificant.
HANGING THEMSELVES
By their own accounts today’s CEOs are among Ameerica’s best and brightest. Yet a clever veteran reporter who recently completed a major book on corporate layoffs hands them the strands which they use to knit a rope that ends up hanging them. Their egos and arrogance cover even the inconsistencies in their own words.
I doubt they even see them as inconsistent. If these CEOs are the equivalent of Derek Jeter then they seem to have a talent for putting their feet in their mouths. It makes you wonder how many people they knifed in the back or used and then threw away to get where they are.
They remind me of one of Shakespeare’s classic stock characters–the half-braggart, half-buffoon, who appears in comedy and tragedy alike to provide comic relief. Fittingly one is turned into an ass in Midsummer Nights Dream and another is hanged in Henry V.
If this is what it takes to run a major corporation these days then a very manipulative caveman could do it! Rather than convince us they are indispensable,these men convince us they are indefensible. The meaning of the Wall of Me becomes clearer for deep down these are insecure people whose insecurities come from knowing they are indefensible.
THE REAL GILDED AGE TYCOONS
The plutocrats of the Gilded Age are often falsely stereotyped as men of action who cared little for anything intellectual. Yet what some at the time called “the captains of industry” seem veritable fonts of ideas and culture when placed next Weill and company.
While I deeply disagree with the ideas of men like Rockefeller and Carnegie, they at least mounted an intellectual defense of their actions and had a commitment to education, culture and philanthropy that shames the Gilded Hypocrites.
Many of Gilded Age plutocrats started out poor and uneducated. This engendered in them a deep appreciation for culture and education. Most Americans today know of Carnegie’s endowment of libraries and Henry Clay Frick’s support for the arts, but can you name any charitable achievements of today’s Gilded Hypocrites, other than the work of the Gates Foundation? Where are the Ford, Rockefeller, Carnegie, and Frick Foundations of our current billionaires? Why doesn’t Weill’s Wall of Me include anything about his philanthropy?
Perhaps the most famous justification of the 19th century tycoons is Andrew Carnegie’s “Gospel of Wealth,” an essay he published in the North American Review under the title “Wealth.” The intellectual foundation for “Wealth” is today referred to as Spencerism, after the British philosopher Herbert Spencer who popularized what became known as “survival of the fittest” Social Darwinism. Carnegie’s most-quoted exposition of this comes about one-third of the way into his essay:
The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great;but the advantage of this law are also greater still, for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not, we must say of it, as we say of the change in the conditions of men to which we have referred : It is here; we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department.
Even more famous is the phrase “The man who dies thus rich dies disgraced,” which concludes his essay. Before that he precisely outlines how the rich should contribute to the community:
The best means of benefiting the community is to place within its reach the ladders upon which the aspiring can rise.
His list includes, parks for recreation, works of art and public institutions to “improve the general condition of the people.”
Less known are the portions of “Wealth” that would probably cause today’s Gilded Hypocrites to choke on the contents of their Walls of Me. The first is a long paragraph about the kind of life the wealthy should lead. Carnegie believed the first duty of the wealthy was:
To set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him.
Even less known is Carnegie’s enthusiastic support for estate taxes:
The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion.
COMPARING TYCOONS AND CEOS
Comparing “Wealth” to the stunted intellectual and moral development of today’s Gilded Hypocrites reveals that while Carnegie felt the rich had an obligation to help those less fortunate, this sentiment never escaped the lips of those Uchitelle interviewed. Today’s super rich apparently have less social conscience than the so-called Robber Barons.
The only justification the Gilded Hypocrites can muster is to point out that the global economy demands people like them. Weill even says we need to be more like India and China, two rising economic powers. The Gilded Hypocrites openly threaten to take their billions and go elsewhere if we ever raise their taxes, a move most associated with Third World autocrats who put their money in Swiss banks and, if they are lucky, end up in exile in some island paradise.
While the economic achievements of China and India are prodigious, I do not think the average America worker has any desire to lead the life of a Chinese or Indian worker. That step backward would return us to piece work, sweatshops, and slave-like work environments.
The Republican Counterrevolution has made little secret of its desire to roll back the programs and policies of the New Deal, but until reading the words of today’s CEOs , I had little idea that turning back the clock meant turning it back not to the 1890s, but to the 1840s.
If this is the vision of the future the Gilded Hypocrites and the GOP have for America I want nothing of it. The question then becomes what do the Democrats want? Does Hillary Clinton support her husband’s repeal of Glass-Steagall? What is the position of the rest of the field on how to deal with the Gilded Hypocrites? Do they agree with Carnegie about the estate tax?
Currently only John Edwards seems to be making the outrages of the Gilded Hypocrites a campaign issue. Yet the public’s anger at the salaries of sports superstars seems to suggest they also have an anger for the out-of-control salaries of the Gilded Hypocrites. The Democrats would do well to remember this.
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