Spotlight on the Wealth Gap: Goldman’s Wretched Excess

In 1992, I wrote a short book about a number of things going on in this country that I thought

In 1992, I wrote a short book about a number of things going on in this country that I thought we as a polity would be well advised to take a hard look at before they got hopelessly out of control. My focus was mainly on what I saw as the developing takeover of what I called “The Public Capital”—the right to draw on the full faith and credit of We, the People, the power to levy, forgive or avoid taxes, etc.—by an “overclass” based on wealth, access and the corruptibility of underpaid politicians. I thought—and think—that this was a bad thing, and I had a few ideas, some radical, others merely commonsensical, about what might be done to deal with the problem.

That book was never published, thanks to the Lobb-licking sonofabitch then pretending to be my editor and my friend. Well, so it goes—but what I foresaw 15 years ago has mostly come true, accompanied by a level of public- and private-sector corruption and moral distortion that I would have flinched from predicting.

I think, however, that we may finally have reached the point when wealth is going to be politicized. When the wealth gap, as it’s sometimes called, is going to provide a viable basis for vote-mongering and vote-getting—starting with scandalized attention to who gets paid how much for what kind and quality of work, and moving quickly on to casting a harsh political spotlight on how this wealth is used. And then will follow, as the night the day, a cry for legislative redress.

This is a consummation devoutly wished for by a lot of people, although let me make it clear that I no longer count myself among them. Like many others, I find the $23 billion in bonuses that Wall Street is paying itself to verge on the obscene, given the work that generates the money. I also have strong views about the qualities of intellect and character required to be triumphant in the area of derivatives trading, hedge-funding and private-equity investing, based on years of close, firsthand observation of some of the bigger players—but these are qualities that, for better or worse, I know myself to conspicuously lack, and to complain that others possess them is simply sour grapes.

Yes, I think it would be nice, and probably better for the country, if our best and brightest were engaged in other than Wall Street work, if the cream of American youth didn’t (as I wrote in this space long years ago) regard higher education as little more than an agreeable, intellectually unchallenging way to paper over the inconvenient gap between puberty and Goldman Sachs. But against these longings, set this: Someone has to pay tax, and if it can’t be a community of heartland manufacturing souls whose jobs are now in Guangzhou, then let the Greenwich hedge-fund impresarios foot the bill.

That said, I’m pretty sure I hear, just over the horizon, the first unmistakable intimations of the thunderous wing-beating of gilded chickens swinging onto final approach. If this is so, two words, already spelled out above, will explain why: Goldman Sachs.

The profits—and the concomitant $16.3 billion in bonuses—that the big investment/trading house generated from its 2006 paper-shuffling provide what the wealth-haters have been looking for: wretched excess. That is to say, someone’s excess that can be politically compared to someone else’s wretchedness; excess on the part of the 0.1 percent that makes the 99.9 percent remnant, to a man, look at its lot, collectively and individually, and feel wretched.

The way we live now, a thrust toward politicization finds initial expression as “news.” Hence, the front-page story in The New York Times on Christmas Day about bonus-crazed traders vying for Ferraris and bonus-addled hedgers buying $5 million Manhattan condos for their kids. This is “reporting” as propaganda: stuff that will inspire even people well disposed toward finance capitalism to run a thumb along the pikestaff blade and make sure the tumbrel wheels are greased.

But we better move very carefully before giving legislative expression to a gut or populist anti-wealth reaction. The finances of this great Republic are in a parlous state—just as planned by Dick Cheney and his henchmen. I don’t believe—and I’m guessing that this is what Thomas Edsall was getting at in his Times column a couple of weeks ago—that the Bushies’ cut-tax-and-spend orgy (of which Iraq is the centerpiece) has represented a turning of the party’s back on traditional Republican principles of thrift and probity. I believe it was a conscious attempt, made with full knowledge that knee-jerk (accent aigu on the “jerk”) Democrats could be counted to go along in lock-step, to spend the country into insolvency, to dissipate the Public Capital to the point where social welfare and economic equity are no longer financeable, either as a matter of economic logic or of political will.

Mission accomplished.

But that’s what they said about Iraq.

Spotlight on the Wealth Gap:  Goldman’s Wretched Excess