You know who Bernie Madoff is. But what about Dwight Schar, Patrick Soon-Shiong, or Richard Baker? These three men have the dubious distinction of winning spots on the America’s Greediest 2008 Top Ten compiled by the Too Much online newsletter.
Madoff didn’t make the list. (He doesn’t need the publicity–or exposing–these days.) But what’s interesting is that most of the honorees are not household names. Schar is head of NVR, a giant homebuilding firm. In the past six years, he has collected $625 million in compensation, and his company’s stock has plummeted. Soon-Shiong sold a pharmaceutical company to a German company for $3.7 billion; the company, the only source of much-in-demand blood thinner, was attractive because in 2007 it had made $253 million on merely $647 million in sales. (Talk about mark-up!) Baker is a Louisiana congressman who gave up his House seat to become CEO of the trade association for the hedge fund industry. In Congress–no coincidence–he had chaired a subcommittee that had overseen the hedgers. And, by the way, jumping from watchdog to pitchman, Baker boosted his annual compensation from $163,000 to $1 million.
As one reads the list, a natural reaction would be: who are these people? (Steve Jobs does make the cut.) And the larger point is this: our economy is controlled–and we are held hostage–by a host of CEOs, money-managers, and assorted masters-of-the-universe who are not so masterful. They screw up–and they still get to keep the mansions and the yachts. But many of the rest of us pay. GM’s top execs have to fly commercial–boo-hoo-hoo; their workers lose their livelihoods. And because the high-fliers on Wall Street thought they could spin debt and swaps into gold (for themselves) by creating all sorts of new financial products that would be free of pesky regulations, American taxpayers have to bail out Big Finance institutions deemed too big to fail.
Who are the culprits? By and large, they are nameless. Quick–tell me who is the head of AIG? Who was the top brother at Lehman Brothers? Yes, we have Google for that these days. And Representative Henry Waxman did hold a few hearings in which several financial ex-titans had to suffer through tirades from committee members. The Detroit Three execs underwent a similar experience. But there’s not been enough castigation of the particular folks who have destroyed the economy. Charles Ponzi got a scheme named after him.
The Democratic leaders of Congress have missed an opportunity. They could have convened a series of major joint House-Senate hearings and whistled in a parade of corporate blunderers. And at the same time, they could have brought to the witness table all those government officials who made this debacle possible–including Democrats from the Clinton years (though that may inconvenience Larry Summers, who will be one of Obama’s top economic advisers in the White House). The New York Times, in a series called “The Reckoning,” has been tracking who messed up in both the private and public sectors. The most recent article outlines various missteps taken by officials in the Bush administration who were influenced by George W. Bush’s bias against regulation. And a Washington Post front-page article reports how the Office of Thrift Supervision, which is part of the Treasury Department, allowed banks to overstate their financial health. And guess what? An OTS official involved in this was also part of the long-ago Charles Keating scandal. The Post reports that this fellow, Darrel Dochow, “has been removed from a position as a senior thrift regulator. He was demoted in the early 1990s after federal investigators found that he had delayed and impeded proper regulation of Charles Keating’s failed Lincoln Savings and Loan.”
Dochow sounds like a small fish–though taxpayers can be glad he’s been nabbed. Many of the big fish, no doubt, are still swimming in their swimming pools, even if their holdings have shrunk. It’s not too late for the Dems in Congress to initiate a little old-fashioned class warfare. When Congress returns in January, the Ds can haul ’em in from their gated communities–and make piñatas out of them. (And where are all those FBI white-collar investigations mentioned a few months ago?) Sure, that won’t get our economy out of the hole it is in. But there is a market-ish reason for doing so. The more the perps are shamed, the more disincentive there will be for other corporate and government big-shots to duplicate their behavior.
What’s happened to our economy is no accident. It was the result of the bad and misguided actions of particular people in and out of government. All those deciders should, at the least, have to face an angry mob.