The great question remains: are we saving capitalism or are we protecting class privilege?
The corporate culture at AIG created the mess, and the reconstruction of a business entity that failed requires a renovation of the culture that got the company into bankruptcy. Executive suites seem to be full of people full of themselves, narcissists well paid for treating others badly.
You make several good points.
First, the execs at AIG believe they are entitled to lead a lavish life style at the expense of others, previously the stockholders of AIG (whom the execs fooled) and now the taxpayers.
Second, the corporate culture at AIG is (unfortunately) shared by a few other organizations (Citi). It should be extirpated, like a plague virus.
Third, unfortunately AIG did not file for bankruptcy as the fed rescued them.
Finally, I can now understand the attitude of much of the French population during the great revolution there. The Aristos insisted on their "right" to live a lavish lifestyle at the expense of the average person, much as the execs at AIG insist on their "right" to have the taxpayers pay for their lavish lifestyle. Although, I much favor a length of rope to the guillotine.
Wow!
I was thinking of a different comparison -- to the old Soviet
nomenklatura, a privileged class that developed in the "Workers' State" because the workers had no real power, but Party hacks did and could get away with anything. Although the USSR and USA had ostensibly opposite ideologies (Communist Party, Republican Party), bureaucratic elites in both became very similar in getting paid extremely well and getting special breaks on taxes due to their ability to exploit the political power that they wielded. I forget who it was -- Galbraith? -- who recognized a convergence of bureaucratic classes on opposite sides of the Iron Curtain. Neither class had to own the capital, but it could certainly control the means of production, not to mention personal survival for all but themselves. Both classes, despite their lack of entrepreneurial role, got increasingly wealthy and powerful in societies that pretended that social class either did not exist or was irrelevant.
Many people now forget that the typical executive of forty years ago was either someone who was part of the dominant family or was someone who had worked from one low level (perhaps even the shop floor or the mail room) to one higher level after another over years of demonstrated competence and loyalty. The former had obvious ties to ownership; the latter at least knew the company inside-out and knew who did what , and who did well at his work. The latter was more commonplace in parts of a company that made or delivered the goods (manufacturing or sales), and it wasn't paid to live like sultans. At its peak it was in its sixties, and the executive pay, a small multiple of the norm on the shop floor or a sales route, was available to those who showed the requisite competence and loyalty. Those executives drove Cadillac, Lincoln, Chrysler Imperial, or top-line Buick vehicles, and they did not live much differently from such professionals as physicians and attorneys. They might have bought a lakeside cottage with their pay, a bit nicer than the one for those who worked on the line, but not that much grander. They also knew whence they came, and people could relate to them. It's no fantasy; it's the past.
Now the executives rotate from one corporate position to another. Advancement from within is a rarity, and glass ceilings abound. The modern executive now uses the stick instead of the carrot -- the threat of firing or mass layoffs to get a point across. Is it any surprise that economic inequality in the USA has become more similar to that in Mexico than to that in most of western Europe? We have also seen pseudo-aristocratic estates arise... which is exactly what one expects where some salaries are hundreds or even thousands as much as the lowest pay in big corporations.
At the same time that executives were enriching themselves they became strident supporters of tax cuts for high-income people. To be sure, such is good for shareholders, but such also helps squelch small business as competition. The high graduated income taxes on corporations and tycoons ensured niches for such family-owned businesses as motels, small-town department stores, hardware stores, supermarkets, service stations, one-branch banks, and hamburger stands. Try finding those these days.
The solution is not big business and tax cuts targeted at enriching tycoons and executives; it is instead small business that can't monopolize markets and pay bloated salaries to narcissists and even sociopaths who treat people badly.
The solution is for entities such as AIG and Citi Bank to fail. Just because the giant banks have sewed up the credit-card business ignores the obvious fact: more of us would do better with a library card than with a credit card.
