by Robert Brent Toplin on Mar 22, 2009
“Greed” is suddenly the operative word for characterizing the bonuses received by AIG executives and other financial titans who amassed riches while pushing their companies and the American economy over the cliff. But will this anger last? Are discussions about greed and calls for government action to curb it likely to extend beyond the present financial crisis?
History suggests that outrage over the abuses of fat-cats is often short-lived. Complaints appear frequently during hard times but are less audible in days of prosperity. When the economy performs well, Americans talk, instead, of energy, ambition, drive and success — positive words that suggest that greed, as Gordon Gekko claimed in Oliver Stone’s film, “Wall Street,” is “good.”
In the current economic crisis, financiers who used to be admired as “Masters of the Universe” are being vilified as reckless speculators. Populist indignation is exploding. Americans who manage their finances responsibly are asking why their tax dollars are needed to bail out troubled companies whose well-paid executives took foolish risks. President Obama’s economic adviser, Lawrence Summers, spoke for many when he called the $165 million in bonuses scheduled for AIG executives “outrageous.”
If leaders in the Obama administration hope to channel populist anger into regulations that curb abuses, they’ll need to act swiftly. Once the stock market bounces back, pressure to rein in greed will diminish.
Until the recent crash, Americans tolerated great inequalities of wealth. Back in 1973, CEOs were earning 30 times the income of their average workers, but in recent years, executive pay climbed to more than 300 times the average. Some Americans objected to this inequality before, but the outcry turned thunderous only after the Wall Street meltdown.
The default American attitude towards the rich is admiration. Rather than begrudge wealth, Americans hope to attain it. Acquiring a fortune remains only a dream for most, but the dream affects their judgments about people who have achieved success. They view even the arrogant ones, like Donald Trump, as superstars.
America’s gospel of success goes back to the 19th century, when ideas from both religion and science fostered admiration for the super-wealthy. John D. Rockefeller claimed, “God gave me my money,” evoking a popular view that wealth was the Lord’s reward for good work. Social Darwinism taught that the rich were the “fittest” since they survived fierce competition.
Many of America’s tycoons have been able to check resentment of their great wealth by engaging in philanthropy or by building a reputation for creating valuable new products. Andrew Carnegie and Rockefeller donated great sums to the public welfare, and today’s business megastars such as Bill Gates and Warren Buffett have done the same.
In the 19th century Americans admired rich manufacturers and inventors such as Thomas A. Edison and Henry Ford, and in a related way they admire pioneers of the information age, such as Steve Jobs (of Apple) and Sergy Brin and Larry Page (of Google), because their technical creations have improved the quality of life.
On the other hand, Americans have long been suspicious of people who made their fortunes through finance, a profession they associate with the manipulation of money. President Jackson exhibited this distrust in 1832 when he sought to crush the Bank of the United States. Jackson complained that the Bank made the “rich, richer” at the expense of “the humble members of society.”
In the late 19th century the business mogul Jay Gould served as the exemplar of reckless speculation, since he amassed great wealth though stock manipulation and shady deals. In the 1890s, Populists viewed themselves as hard-working, honest producers. They expressed deep suspicion of the bankers and investors in far-off eastern cities who seemed to control the nation’s finances.
Movie characterizations often reflect the public’s suspicion of financial tycoons. In Frank Capra’s “It’s a Wonderful Life,” the exploitative and heartless businessman, Harry Potter, tries to take advantage of George Bailey, a small-town businessman who wants to save his family’s bank during the Great Depression. Presently, lots of Americans feel they are suffering in the manner of George Bailey. They think they’ve been fleeced by the Harry Potters of high finance.
In the Depression days President Franklin D. Roosevelt found opportunities to push bold legislative initiatives through Congress because the public was in a particularly angry mood about the costly mistakes of tycoons, especially the giants of high finance. Today, President Obama is offered a similar opportunity. Disgust over huge bonuses and costly bailouts make the American public eager for government action to stop abuses that jeopardized their investments, retirement accounts, and jobs.
President Obama will need to press quickly for regulation of Wall Street, for when prosperity comes back the admiration of wealth will return as the culture’s prevailing outlook. In that setting Gordon Gekko’s claim that greed is “good” will sound once again like a tribute to ambition.
Robert Brent Toplin, professor of history at the University of North Carolina, Wilmington, has published books on popular culture and politics, and is a writer for the History News Service.