The few, the proud, the tycoons
If ever there was an article tailor-made for debate across America, it would be the lead story in The New York Times on Sunday: “The Richest of the Rich, Proud of a New Gilded Age.” Read it and decide for yourself whether this is an era we can look upon with great pride.
Certainly, Sanford I. Weill, retired chairman of Citigroup, does. He tells the Times, “People can look at the last 25 years and say this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”
Somebody, as you might imagine, is government. I am no expert on political or economic history, but one thing government surely did in the past 25 years is roll back regulations that businesses claimed stood in the way of their ability to generate jobs and wealth for all Americans. Reporter Louis Uchitelle also cites the example of President Clinton, who in 1999 revoked the Glass-Steagall Act of 1933. The Act outlawed having commercial and investment banking and stock brokerages under one corporate roof because 74 years ago government thought this structure created too many conflicts of interest and contributed to the 1929 crash and the Depression. And who might have benefitted from Clinton’s repeal of the Act?
So it rings mighty hollow when Weill claims successful corporations like Citigroup “didn’t rely on somebody else” to reach the heights they have. I suppose he could argue that government simply got out of the way of business and that’s why the wealth of companies like Citigroup is now so great. Any way you look at it, however, big businesses have relied on government to take actions that make it possible for them to grow as fast and large as they have. Meanwhile, for only the third time in the last century (1915-16 and the late 1920s) has “5 percent of the national income gone to families in the one-one-hundredth of a percent of the income distribution,” according to economists cited in the article. Hence, the new Gilded Age is upon us.
I do believe individual leaders can make a huge difference in the fortunes of companies and societies. And they deserve to be recognized and fairly compensated. But the leaders I most admire come from a place of humility about their accomplishments and realize their great accomplishments are not theirs alone. They are quick to credit and thank others for their success (including government), not because they are excessively humble, but because it’s true. They also will tell you when they’ve been lucky, as when living through the great bull markets over the 25 years Weill speaks of.
As Paul Volcker told the Times, “The market did not go up because businessmen got so much smarter.”
I don’t have the answers for addressing the great worldwide income disparity today. But I do know the situation isn’t going to get better if our wealth leaders believe they have only themselves to thank for living among the .01 percent.