Is there such a thing as excess in capitalism? I thought about that last
week when insurance giant AIG -- the one on life support in 2008 until
bailed out by taxpayers -- toyed with the idea of joining some of its
shareholders in a lawsuit against the federal government.
This was the same week that AIG ran ads thanking Americans for coming to its rescue. After a long meeting with shareholders and the fed, AIG declined to join the suit, giving hope that a good deed is still a good deed even in the world of predatory capitalism.
The suit was filed by Maurice Greenberg, former CEO of AIG who is now a
major investor with his new company, Starr International. The suit was
tossed out of a New York court but was allowed to proceed in a D.C.
Greenberg argued that the government charged too high of an interest rate at 14 percent, but the company freely entered into the bailout terms and could’ve chosen bankruptcy that would have left shareholders with nothing.
I’m sure the same people bellyaching over the 14 percent would have no
qualms with payday loan companies charging 300 percent interest on their
poor clientele. In fact, many of those same complainers probably invest
in payday loans businesses.
Starr also cited the Fifth Amendment in its suit, the one that says the government cannot take private property for public use without just compensation. This is asinine. AIG was not taken by the government for public use. The company agreed to a loan to stay afloat. George W. Bush’s secretary of the Treasury, Hank Paulson, decided that AIG was too big to fail. It’s clear now that all of these companies on the brink in 2008 should’ve tanked to begin the economy anew, but that’s another story.
The point is that capitalism encourages the greedy, grasping plutocracy to
grab everything it can while decrying the working class any kind of a leg
up, especially one from the government.
A recent article in the Wall Street Journal told of employees at Morgan Stanley who will get IOUs instead of cash come bonus day. Employees complained that they might have to temper their lifestyles by getting only $125,000 in cash while the rest is deferred.
In the same issue of the Journal, an op-ed piece by Richard Vedder
lamented the fact that Americans didn’t work enough to make the economy
grow. He went on to cite the usual conservative suspects — disability
payments, unemployment insurance, food stamps — that keep people from
going to work.
Never mind that the jobs most people look for rarely offer a $125,000 bonus. This only sounds ludicrous to those who feel entitled to 6- and 7-figure incomes. The concept of grotesque income inequality doesn’t faze them. But Vedder should know better. He should know that an army of minimum wage workers won’t lift the economy.
Growth has been stagnant the past three decades because well-paying,
unionized manufacturing jobs have been shipped overseas where slave wages
are paid in order to bust U.S. unions and pad profits.
Without the government programs, millions of Americans would be left high and dry because the economic system so beloved by Greenberg, shareholders and Morgan Stanley employes has failed the vast majority of people.
By the way, Greenberg, shareholders and bank employees do nothing to boost
the economy unlike a well-paid working class. All the investor class does
is take and that includes taxpayer money that they feel would better serve
them than layabouts. And if they don’t get enough, they sue.
Is there such a thing as excess in capitalism? I think they’re synonymous.
Stephen Dick is an editor at The Herald Bulletin in Anderson, Ind. Contact him at