It’s like a Woodstock for plutocrats, or an Avengers for the avaricious: The CEOs of America’s largest corporations have banded together to lecture us on the importance of debt reduction. And despite their lack of qualifications and their very obvious self-interest, the media can’t get enough of them.
Why? They’re not experts in economic policy. Quite the opposite, in fact. Many of them got where they are by persuading people to buy overpriced crap that’s bad for them. So a better way to look at this seemingly endless PR campaign would be to say: There they go again.
And yet their cynical campaign continues to capture national venues like 60 Minutes and conduct local blitzes in areas like Raleigh-Durham, North Carolina. Reporters are even hounding Warren Buffett – a CEO with much deeper economic knowledge – with the words of a less-informed and more self-interested colleague.
Think of it as Wall Street’s latest scam. If you liked toxic investments and the 2008 financial crisis, you’ll love their deficit deal.
The Economy’s Most Wanted
The list of “Fix the Debt” CEOs includes executives from Wall Street’s largest and most notorious bad actors. These banks have committed serial fraud and gotten away with no criminal penalties and only nominal fines – fines paid by shareholders, and not the misbehaving bankers themselves.
GE’s Jeffrey Immelt is there, seemingly unashamed of GE Capital’s fiscal and legal record. So’s the CEO of Morgan Stanley, where bankers would boastfully shout “I ripped his face off!” after selling a worthless investment – to their own clients. Erskine Bowles, co-author of the “Simpson Bowles” plan the CEOs are promoting, is on the Morgan Stanley Board.
The gang’s all there: JPMorgan Chase CEO Jamie Dimon? Check. Bank of America CEO Brian Moynihan? Check. Goldman Sachs CEO Lloyd Blankfein? Check.
In fact Blankfein’s become something of a spokesperson for the group, working to sell the public on a package of cuts to Medicare, Medicaid and Social Security, combined with nominal tax increases that would primarily target the middle class.
Returning to the Scene of the Crime
Some spokesman. Blankfein’s institution paid the largest SEC fine in history for fraudulently deceiving investors about mortgage-backed securities which it sold while knowing full well that these securities were toxic – a fact it concealed from its clients.
The list of deceived investors includes many of the large pension funds that provide financial security to working Americans when they retire. Now that Wall Street’s struck these private-sector funds, they’re targeting public retirement programs too.
“Deficit reduction” and the “fiscal cliff”: They’re this year’s mortgage-backed securities.
Their Real Business
Most of these CEOs aren’t bankers. But today, in a very real way, everyone who runs a giant US corporation is a “Wall Street CEO.” As Warren Buffett and others have rightfully observed, modern corporate leaders no longer care about long-term value. They only care about making their quarterly numbers – by any means necessary – so they can get their promised bonuses and options. That won’t change until we change the way we pay CEOs.
Whatever industries they represent, these CEOs are primarily in the relationship business. And some of their most valuable relationships are political. That’s why the companies on this list paid nearly one billion dollars in lobbying and campaign contributions in the last four years alone.
It has a Dr. Evil ring to it: One billion dollars. The lion’s share (57 percent) went to Republicans, but the remainder went to friendly Democrats, which undoubtedly helps lend a “bipartisan” gloss to all this “deficit” talk. And a lot of it was your money, especially the lordly sums that Blankfein and his pals threw around after we bailed them out.
Don’t be angry. It’s like that old fable about the scorpion and the frog: They’re doing this because it’s their nature.
But let’s be clear: These CEOs don’t really care about the deficit. If they did they’d propose much higher taxes for themselves, a major jobs program to get our economy moving again, investment in our crumbling infrastructure, and expanded education funding to build the middle class of the future. And they’d be demanding that we do it now, while international bond markets are essentially paying our government to lend it money rather than the other way around.
They’d also focus on health care costs — not by proposing to cut Medicare and Medicaid benefits, but by removing the greed factor which makes our medical costs so much greater than that of any other developed nation. But they’re not likely to do that – not when some of them represent the for-profit health industry and others reap big profits from health care investments.
What these CEOs really care about is bigger tax breaks – for themselves and their corporations. That’s why they’ve come together to use what may be their greatest collective talent: selling crap that’s bad for you. Let’s hope that this time nobody’s buying.