Over the past several days much has been said and written about the eighth anniversary of 9-11 and also the financial events of September, 2008. The most discouraging aspect of these anniversaries is that business as usual appears once again in the saddle.
There was an outpouring of patriotism and national solidarity in the weeks following 9/11/2001. For a brief period, we were back in the post-Pearl Harbor days in which our citizenship and common values made us stand as one against an external threat. People, tears in their eyes, saluted the flag and sang the Star Spangled Banner or God Bless America and meant it.
General public reaction to financial meltdown a year ago among big institutions mainly was angry. And that was entirely appropriate. Ordinary working families who played by the rules, paid their mortgages and taxes, saved for their kids' educations, and invested for retirement suddenly found themselves financially devastated because of the greed and stupidity of high-rolling Masters of the Universe and the public regulators who let them get away with it.
That anger still is there — expressed in health-care forums, anti-tax tea party demonstrations, and in the present and prospective unseating of public officials perceived to be associated with the economic fall. Solidarity understandably has waned since 2001 on other fronts, partly because no further terrorist attacks have hit our homeland, although they still could.
Reform of financial practices and regulations has not taken place. Federal regulators have been feuding over turf. Big financial houses are still designing and selling risky derivatives. Bernie Madoff, Anthony Mozilo of Countrywide Financial, and a handful of others have faced legal action. Several major institutions, including Washington Mutual, have failed or been merged. But only a few of the generally unregulated hedge funds have closed. Pay on Wall Street is almost back to normal. (The 30,000 Goldman Sachs employees will each earn an average $700,000 this year; senior executives will reap multi-millions again in salary and bonus.)
Treasury Secretary Tim Geithner, White House economic czar Larry Summers, and others have cautioned that we should not dampen the initiative (some would call them "animal spirits") of financial leaders by limiting their compensation. I have worked over the years with several of the Wall Streeters involved; mainly I see them as greedy predators unable to see beyond themselves.
There is a sense of entitlement among these highly paid Wall Streeters — one that Geithner, at the New York Fed before becoming Treasury Secretary, came to accept as normal. If you asked the Masters, they would tell you that they deserve every penny of their compensation and that the shattered lives and lost businesses, savings, and jobs of ordinary citizens have nothing to do with them. That is how it must be with Masters of the Universe.
Even at state and local level, we see signs of insensitivity and entitlement which do not reflect well on us.
For instance, I was shocked earlier this month when outgoing Mayor Greg Nickels suddenly disclosed that his Mercer Project — a nominal traffic project mainly meant to benefit the South Lake Union commercial development of Vulcan Inc. — now had a $290 million rather than $190 million price tag for taxpayers. At the same time, the Mayor is seeking new public subsidies for the running-empty Allentown trolley from near Westlake Center to South Lake Union, also intended to benefit the Vulcan project. Had he no shame?
A few days before, the University of Washington Regents, a public body appointed to govern a public university, signed President Mark Emmert to a five-year contract which included sweeteners, including a six-month paid sabbatical (worth $450,000). His new contract will require the Regents to pay him a $1-2 million lump sum should he be fired. When economic downturn hit last year, Emmert refused to take a voluntary pay cut, as his counterpart at Washington State University did, even though Emmert was the second-highest-paid public university president in the country. (Although we UW alums take pride in our alma mater, we should recognize that it ranks only in the middle of major public universities, well behind those in Austin, Ann Arbor, Berkeley, Madison, Minneapolis, Charlottesville, Los Angeles, and Chapel Hill, among others).
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