When I logged on to AOL to check my e-mail last week, I was more than a little surprised to find myself confronted not with one of those annoying pop-up ads for a cheap subscription to Teen People or the now standard promo for the latest Warner Bros. movie, but with the faces of three smiling men. The caption read: “The Greediest Execs of All: They made billions as investors lost big.”
Intrigued, I clicked on the accompanying link and was transported to “The Greedy Bunch,” Fortune magazine’s exhaustive evisceration of America’s most avaricious executives — featuring blood-boiling stories such as “You Bought. They Sold.” and “The Cash Out Kings.”
Here was AOL, under SEC investigation for questionable accounting practices, eagerly redirecting me to AOL Time Warner’s corporate sibling Fortune for a stinging exposé. And there, front and center among the greedy executives, was square-jawed AOL Time Warner chairman Steve Case. Who said synergy is dead?
I’m guessing this wasn’t what Case and Gerald Levin had in mind at that famous press conference — which now seems decades ago — announcing their great media colossus. Yet the prime placement given the greedy executives’ story shows just how fully it has captured the public imagination. Who needs Dr. Evil when you’ve got Ken Lay, Bernie Ebbers, Dennis Kozlowski and the seemingly endless Dickensian parade of other corporate villains?
Traditionally, declaring class warfare has been an ineffective political strategy in America — are you listening, Al Gore? Most Americans, rather than resent the wealthy, aspire to one day share their lofty status. It’s why this country’s ever widening division into two nations has had such little effect on Washington.
But Americans also have a deeply ingrained sense of fairness. The scandalous CEOs have pushed us too far — and are finally reaping the whirlwind of public fury.
Being rewarded — even over-rewarded — for a job well done is as American as rescued miners selling their stories to Disney. We don’t begrudge Vin Diesel his $20 million payday for “XXX 2,” and we even smile indulgently at the $250 million that A-Rod gets for playing baseball — it’s the genius of the market, we tell ourselves; it’s supply and demand. But making billions while your shareholders lose their shirts, and your workers lose their jobs, sticks in our craw.
The Fortune list of the Top 25 Cash-Out Kings tells the sorry tale of rapacious CEOs who, among them, pocketed an astounding $10.7 billion, and all while the companies they led crashed and burned. Singing the gospel of its newfound populist religion, Fortune, which spent the better part of the last decade exalting this same corporate culture, described the CEOs’ rampage as an obsession with becoming “immensely, extraordinarily, obscenely wealthy.”
CEO salaries went up 442 percent during the ’90s. In 1980, the average CEO’s compensation was 42 times the pay of the average blue-collar worker. In 1990, he made 84 times more than the blue-collar worker. In 2000, he made a staggering 530 times more. Meanwhile we have 8.3 million people out of work and millions of middle-class Americans whose retirement plans have shriveled away. This time, it’s not just the disenfranchised who are getting the short end of the economic stick. It’s Mr. and Mrs. Working Stiff.
Which is why the epidemic of infectious greed has the potential to ignite an explosion of populist outrage — one with the power to remake our democracy. The question is: Who will light the fuse?
Clearly not our leaders in Washington. Our elected representatives are so compromised, such an integral part of the scandal, that if they set off a populist petard, they’d only be hoisted by it themselves. Those in power have proven themselves chronically unable to bite the corporate hand that feeds and feeds and feeds them.
So, instead of real reform, we get watered-down initiatives, slap-on-the-wrist fines, showy arrests — and the “honey, come look at this” sight of Democratic Party chairman Terry McAuliffe attempting to ride the corporate scandals to a Democratic victory in November. That’s Terry McAuliffe, the same guy who turned $100,000 and his friendships with Bill Clinton and Gary Winnick into an $18 million windfall from the now bankrupt Global Crossing. The same Terry McAuliffe who earlier this month proudly unveiled the final drawings of the DNC’s new, state-of-the-art $28 million headquarters, financed entirely through massive — and soon to be illegal — soft-money donations. Not exactly the poster boy for populist outrage.
Among the biggest donors to the DNC building fund is Sen. Jon Corzine, the former CEO of Goldman Sachs, who made a mint on Wall Street helping create some of the same banking and accounting schemes corporate America has been using to bilk and defraud shareholders. But now, of course, he’s a crusader for reform and a champion of the little guy. Or, at least, of those angry little guys who vote.
It’s astounding how brazenly these guys switch sides, as if all they have to do is change jerseys and we’ll believe they’re suddenly on our team. Watching Corzine and John Castellani, the president of the Business Roundtable, on “Meet the Press,” sternly wagging their fingers, I wondered: Where were they in the ’90s when, you know, all this was going on? After all, Fortune’s findings were based on an analysis of CEO stock sales filed with the SEC, filings available to anyone who chooses to look for them. Why weren’t they — and why, for that matter, wasn’t Fortune — crying foul about these things 10 years, five years or even one year ago? Were they unable to find the SEC in the phone book? Or were they too caught up in the irrational exuberance to notice?
As our collective anger collides head-on with our political system’s intransigence, we’re stuck with a classic case of an irresistible force meeting an immovable object. Something has got to give. In the past, it’s been us. But it doesn’t have to be.
We can’t count on a white knight riding to the rescue — although I have to confess to a hope-over-experience fantasy that John McCain will finally abandon his dollar-rich but morally bankrupt party and mount an Independent steed. But, other than that, look around at the political landscape — 100 senators, 435 members of the House, 50 governors. Is there anyone — anyone — who strikes you as capable of breaking the logjam, of tapping into the American people’s longing for fairness and justice and equity?
I hear silence. The spark will have to come from outside the political gene pool.
Will it be, say, a younger, charismatic Ralph Nader? A Ross Perot without the corporate baggage or bats in the belfry? A real-life version of Jimmy Stewart’s Jefferson Smith, who arrives on the scene funded by $1 donations from paperboys and soda jerks or, these days, video-store clerks and cubicle drones?
My guess is none of the above. Instead, it will be a critical mass of individuals and groups mobilized by the injustice given flesh and blood by the current scandals. This time we have a story to organize around, a story that has it all: narrative power, colorful crooks, sympathetic victims, juicy details (who can forget Kozlowski’s $6,000 shower curtain?), political intrigue, global fallout. A story so compelling that even our part-of-the-problem media giants can’t ignore it.
The scandal that is. The real solutions they’ll try to ignore as long as they can. But beneath the media radar screen, people are organizing across the country: from established organizations engaging in grassroots work like Public Citizen, Common Cause, Global Exchange, the Center for Public Integrity, the Pension Rights Center, Workingassetsradio.com, and United for a Fair Economy to younger groups like Citizen Works and Junction-City.com to Jim Hightower’s traveling road show, “The Rolling Thunder Down-Home Democracy Tour.”
“We have the chance,” Scott Harshbarger, president and CEO of Common Cause, told me, “of combining the traditionally disenfranchised with a new investor class that now sees pensions and college funds disappearing. This is a unique opportunity to organize and politicize them.”
While an over-reliance on market-based solutions may have gotten us into this mess, here’s hoping that the growing demand for fairer, saner, and more democratic answers for America’s problems may increase their supply.
We were told again and again during the ’90s that our unprecedented prosperity was fueled by consumer spending. Well, the time has come for these shoppers to leave the malls and take to the streets — to go from invigorating our economy to reinvigorating our democracy.