March 24, 2009
The decision by JPMorgan Chase to proceed with plans to spend $138 million on new jets and a hangar to house them, as ABC News reported Monday, fits right into my theory about why the corporate rich continue to indulge and reward themselves despite a public uproar amid financial crisis.
Same with the now-shelved plan at Constellation Energy Group to reward executives with about $32 million in performance benefits and retention incentives - I have a pretty good idea why such a feast had been arranged despite the company's near-bankruptcy, its layoff of some 800 employees and its demand for more money from electric customers.
And same with the whole AIG fiasco - those bonuses that went into the mail despite company catastrophe and the need for a $170 billion taxpayer-funded bailout - it, too, fits perfectly with this theory of mine, which I've kept to myself until now.
It's not just greed that drives this behavior, though greed is certainly part of it.
It's not that the smartest guys in the room are also the most obtuse or arrogant. ("When I hear the constant vilification of corporate America, I personally don't understand it," Jamie Dimon, the CEO of JPMorgan Chase, said in a recent speech. "I think it's hurting our country.")
There's something else going on. I call it: hoarding up for the apocalypse.
I have been watching the concentration of wealth in this country accelerate during the past 10 years in particular. The gap between middle class and rich has become wider and wider, and the gap between rich and poor has become so vast as to be immeasurable.
(Actually, it is measurable. The Center on Budget and Policy Priorities tracked the long-standing trend of growing income inequality and found that it had gone crazy since 1990: On average, incomes for the bottom fifth of American families declined by 2.5 percent while those among the top fifth increased by 9.1 percent. More than one in four working families are considered low-income, earning too little to meet their basic needs, according to a research project funded by the Annie E. Casey Foundation, among others. One other factoid, from the Economic Policy Institute: The ratio of total CEO compensation to average worker pay rose from 24:1 in 1965 to 262:1 in 2005.)
Knowing that it wasn't always so, I've tried to figure out why so many millionaires of the corporate class do everything within their power to become multimillionaires and even billionaires, piling on layer after layer of wealth, beyond anything most people can imagine as necessary in a lifetime.
(Various groups and agencies that study the gap between rich and poor - those "class warfare" warriors who keep bringing this sore subject up - say the richest 1 percent of Americans own anywhere from 80 percent to 90 percent of all net assets. Or, at least they did before this mess, which many of them had a hand in creating.)
Hoarding for the apocalypse calls for belief that the end is coming and that wealth will insulate the wealthy from the misery that will befall the rest of us. (The rest of us might harbor apocalyptic fears, from time to time, but we haven't figured out what to do about them. We're wage-earners, for the most part, or the owners of small businesses. We haven't all that much to hoard - not enough to make a difference, anyway - so we keep working to keep the bills paid and the kids fed.)
The apocalyptic rich have hoarded cash and assets - and they continue to accumulate as much as possible - and they've built retreats to allay a deep fear that, when the world starts to fall apart, they will be at the top of a mountain, in a secure compound with its own source of energy and potable water (and a decade's supply of cabernet), isolated from the screaming, rioting masses.
Continue reading here.