Boy, have I learned my lesson, which I pass onto you. Do not, under any circumstances, call out any of the bonus-baby CEOs, bankers or the like, because if you do, you may get smacked down by one of their legion PR professionals.
My last column about people’s desire for some actual accountability from these guys (“Wanted: Perp Walk for Plutocrats”) had barely hit the In These Times website when former Merrill Lynch CEO John Thain’s spokesman, Jesse Derris, called and e-mailed to inform me of factual errors in the piece and to demand corrections.
Well, fair enough. Here’s what I got wrong. That $1.2 million renovation of his office, with the notorious $35,000 “commode on legs”? That was done in 2007, not 2008. I also said that when the news broke about Merrill Lynch’s staggering fourth quarter losses – at the same time the company handed out $3.6 billion in bonuses – Thain was skiing in Vail. Turns out I was wrong. Thain went to Vail over Christmas, before the news broke but, according to Time, after he had learned about the losses. I humbly apologize for these errors that totally distort Thain’s fine record.
I guess this means we have been mistaken about Thain’s – and other CEOs’ – extravagance and incredible tin ear during a time when millions are losing their homes, their jobs and their retirements.
What I neglected to include are accounts in the Wall Street Journal, the New York Daily News and elsewhere that Thain was also privately lobbying for a personal bonus of $10 million, but was rebuffed. (The Daily News reported on March 5 that he had started at $40 million and then worked his way down to the more modest $10 million.) But Thain “passed on making … [an official] request,” noted the New York Times, “only after learning that he had no chance of receiving one.”
This leads inevitably to the “have they no shame” question. Turns out shame works. As Derris reminded me, Thain has – under the glare of bad publicity – offered to repay the office renovation costs, acknowledging, “They were a mistake in light of the world we live in today.” Now there’s an understatement; some of us think they would have been a mistake anytime.
But enough about Thain, who has become one of the poster boys for corporate greed run amok. There’s someone else we have not heard nearly enough about recently who really needs to be called out: Phil Gramm.
Gramm may be, as David Corn pointed out in Mother Jones last May, the “lead perp” responsible for our current financial calamities. Why? As the chairman of the Senate Banking Committee, Gramm, who had enjoyed the financial largesse (in the millions) from the financial services industry over the years, routinely thwarted the SEC’s requests for more regulatory oversight of Wall Street.
Gramm was also a co-author of the 1999 Gramm-Leach-Bliley Act, which undid the regulatory protections put in place as a result of the Great Depression. It allowed for more mergers among investment and commercial banks and insurers, which launched a series of financial industry mega-mergers and produced new entities with new, internal conflicts of interest.
Then, in 2000, Gramm slipped into an omnibus spending bill the Commodity Futures Modernization Act. This 262-page amendment, no doubt read by few, deregulated derivatives trading. As Corn reported, Gramm sold the amendment as essential to “protect financial institutions from overregulation” allowing them “to be world leaders into the new century.” Well, that’s true – leaders of financial catastrophe.
The amendment also, at the urging of Enron, a major donor to Gramm, exempted energy trading from government regulation. Was it a problem that Gramm’s wife, Wendy, was on the Enron Board? Nah.
After he left the Senate, Gramm became a lobbyist for the Swiss Bank UBS. What did he do for them? Lobbied for the easing of restrictions on predatory loan practices, including those by mortgage brokers.
These stories about Gramm circulated in a limited way when he served as John McCain’s senior economic adviser during his campaign. After he referred to Americans as a “nation of whiners” once the economy started to tank, he stepped down. But where is Gramm now? Why isn’t he being hounded the same way that Thain is?
Let’s get this guy back in crosshairs, to remind Americans that this meltdown did not just “happen.” It was orchestrated, through deliberate and massive deregulation, by “free market” Republicans.
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Susan J. Douglas is a professor of communications at the University of Michigan and a senior editor at In These Times. She is the author of In Our Prime: How Older Women Are Reinventing the Road Ahead.