July 14, 2012 · 0 Comments
By Dean Baker:
I really wanted to ignore David Brooks’ piece [yesterday], but he was saying excessively silly things in criticizing my friend, Chris Hayes. Specifically, he was responding to the main point of Chris’s new book, The Twilight of the Elites, that the elites have become corrupt and inbred.
Brooks tells us that Chris is wrong:
“I’d say today’s meritocratic elites achieve and preserve their status not mainly by being corrupt but mainly by being ambitious and disciplined.”
Is that so? Perhaps Brooks can tell us what Erskine Bowles did for the $335,000 that he earned as a director of Morgan Stanley in 2008. That year might ring a bell, since that was the year that Morgan Stanley was at the center of the financial crisis. It would have gone bankrupt had it not been for a rescue by Federal Reserve Board Chairman Ben Bernanke.
Bernanke used his emergency powers to allow Morgan Stanley to become a bank holding company in the middle of the crisis. This gave the bank the protection of the Fed and the FDIC, halting a bank run that would almost certainly have wiped out the bank. Did the stockholders of Morgan Stanley get $335,000 (more than ten times the median wage in 2008) of value out of Erskine Bowles for his work in 2008?
Of course Bowles is not the only member of the elite who does not seem to provide value for his money. Robert Rubin pocketed over $100 million in his role as a top exec at Citigroup even as that bank was spiraling toward bankruptcy, until it also was rescued by the nanny state.
Anyone who has ever been to Washington knows the town is chock full of 6-figure buffoons: people with no obvious skills who manage to get paychecks that are 5-10 times as high as those of people who work for a living. These people are ambitious and disciplined in that they know to avoid saying anything that will jeopardize their paychecks, but it is hard to see anything else that would justify their salaries.