The Wall Street Follies
Willie Sutton, who said he robbed banks because “that’s where the money is,” had nothing on Richard Fuld.
He’s the Wall Street whiz who headed Lehman Brothers and moved the company heavily into gimmicky investment schemes based on risky subprime mortgages. When those home loans began going bad, so did Lehman Brothers. It collapsed on September 15.
That was, of course, disastrous for Lehman’s employees and shareholders. But unlike regular folks, the CEO had long enjoyed a fat salary. Last year alone, while his company was teetering, Fuld raked in about $45 million in personal pay. That’s more than $20,000 an hour. He got his, even though thousands of people suffered.
But what about all those other Wall Street greedheads we’re now being forced to bail out? No problem, say the White House and Congress, for our bailout bill contains a populist provision to limit the pay of CEOs who get taxpayer funds.
But the actual language of the bill has supersized loopholes punched in the executive pay provision. First, the limit applies only to a few banks that the government will actually take over, not those it simply bails out. Worse, the CEO pay restriction doesn’t affect existing pay arrangements. So top honchos who have been wallowing in obscene pay packages can continue getting those riches, even as they draw bailout money from you and me.
Despite populist pretensions, Washington’s “reformers” are still letting CEOs rob the bank.
MCAIN’S LEADERSHIP ROLL
Drum majors do less strutting than John McCain did during the Washington negotiations over the infamous Wall Street bailout. And drum majors at least lead the band down the field; McCain was strutting up a storm, but no one was following him.
Trying to appear “in charge,” the GOP nominee for president rushed to Washington, claiming to be SuperSenator, zooming in to rescue the rescue.
Though he hadn’t been part of the negotiations and hadn’t read the bill, he got George W. to host a dog and pony show at the White House. The show was supposed to feature a McCain-led agreement between Republicans and Democrats, making him look like a key player. Except that McCain sat silent for the whole 40-minute session.
This is because, much to his surprise, there was no agreement. His fellow Republicans in Congress were bitterly divided on the bailout. Afraid of offending either side of his party, McCain “The Leader” refused to take a position, meekly observing rather than leading.
This did not, however, keep him from strutting around afterward. Straining for credit, he declared: “I think that we made progress. How much I had to do with it, I’ll let you and others be the judge.”Um … how about zero, Senator?
Yet after others had patched the deal back together, McCain was in full strut again. On the day of the congressional vote, he bragged that he had helped heal the divide in his party so the bailout bill would pass. A few hours later, the bill was defeated. Only a third of his fellow Republicans had followed his plea to vote for it.
CARDHOLDERs’ BILL OF RIGHTS
Even as bankers have been clamoring for a massive bailout from you and me, they’ve been lobbying furiously in Washington to kill a bill that would make them give a small break to us.
It’s called the Credit Cardholders’ Bill of Rights, and it would put a halt to some of the nastiest tactics that these credit-card hucksters use against their own customers. For example, they now jack up the interest rate on our cards whenever they feel like it. The rate can jump from 16 percent to 21 percent overnight-Bam!-and they don’t even have to tell us about it. The bill of rights, however, would make them have the courtesy to give us a 45-day notice.
It would also end another annoying gouge: the late-fee surprise attack. Many times, your monthly bill arrives only a few days before it’s due. If you’re ill, traveling, or otherwise unable to jump right on it, Bam! You’re socked with a hefty late fee. But the bill of rights would require the banks to mail bills 25 days before the due date, instead of 14 as they now do.
These steps of simple fairness do not impose any unbearable burdens on the banking behemoths. But, oh, the bankers are in full howl against this attempt to impose even a basic level of corporate civility toward consumers. Incredibly, they’ve labeled the bill “unfair”-even as they count their billions in bailout funds taken from our pockets.
Despite their army of lobbyists, however, the Credit Cardholders’ Bill of Rights has passed the House and is pending in the Senate. For information, contact the Consumer Federation of America: 202-387-6121.
For more information on Jim Hightower’s work-and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown-visit www.jimhightower.com. His latest book, with Susan DeMarco, is Swim Against the Current: Even a Dead Fish Can Go With the Flow.