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« What Questions Would You Ask U.S. Financial Leaders? | Main | Are The Financial Bailouts A Good Idea? »

Bill Moyers & Michael Winship: Moguls Steal Home While Companies Strike Out

From our offices in Manhattan, we look out on the tall, gleaming skyscrapers that are cathedrals of wealth and power – the Olympus ruled by the gods of finance, the temples of the mighty, the holy of holies, whose priests guard the sacred texts of salvation – the ones containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.

This last couple of weeks, ordinary mortals below could almost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landings -- all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.

During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld’s total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O’Neal, retired with a package valued at $161 million, after the company reported an eight billion dollar loss in a single quarter. And remember Bear Stearns Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac – aka the gods who failed – are fighting to keep severance packages of close to $24 million combined – on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.

But let’s change the metaphor for a moment and go to our sports desk, because if religion is no longer the soul of capitalism, as Max Weber once taught us it was, we have to venture somewhere else to try to understand the continuing follies of the new gilded age. And so we travel just a few miles north of Wall Street to the House that Ruth Built. Babe Ruth – the Sultan of Swat – who ruled Yankee Stadium and sired generations of princes after him: DiMaggio and Gehrig, Mantle, Maris, Berra and Jackson. Yankee Stadium, as fabled a place to Americans as Ilium was to the ancient Greeks, about to be demolished and replaced next year by a brand new stadium.

On Opening Day in 1923, New York Governor Al Smith threw out the first ball and John Philip Sousa led a big brass band playing his famous marches. It was the Roaring Twenties, when the money flowed liked bootleg whiskey, the pride before the fall. In 1930, the year after the market crashed, as the Great Depression began, Babe Ruth was taking home $80,000 a year, more than the President of the United States, Herbert Hoover. “Why not?” Ruth asked. “I had a better year than he did.”

Yankee star Alex Rodriguez had a better year than both of them. This season, A-Rod is making $28 million, just part of an annual Yankee payroll of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country’s richest tycoons.

But when it came to paying for the new, $1.3 billion pleasure dome, the millionaires on the field and King Midas in his skybox came up with some razzle-dazzle plays to finance their new wealth machine – tax-free bonds, requiring ordinary citizens to subsidize the construction, and hundreds of millions more for new parking garages, a train station and parks that supposedly will replace the ones seized by the city to make room for the new stadium. The Little League games that used to flourish on sandlots just outside the old ballpark have been moved miles away, sent down to the minors on a long road trip.

That’s okay, you may think, there will be plenty of room in the new stadium for the tax-paying public to come root, root, root for the home team – even the Coliseum in ancient Rome had bleachers for the commoners. But, in fact, there will be 5,000 fewer seats in the stands. And while the Yankees reportedly promise that half of what’s left will cost $45 or less, those seats that used to cost $250, right behind the dugout, will now cost you $850. And if you want to be near home plate, you’ll have to cough up $2500 – per game.

Meanwhile there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year – tax deductible – assuming they haven’t filed for bankruptcy this week.

Why aren’t the fans and taxpayers giving the Yankees a Bronx cheer? They did, but city officials rolled over them while making sure local politicians stay in the lineup. The pols are getting their own luxury suite at the new stadium for free – and first shot at buying the best available seats.

The new colossus will cast its majestic shadow across the South Bronx, one of the nation’s poorest neighborhoods. The residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of New York City, respiratory disease is already so high they call it “Asthma Alley.”

Not that the well to do in the infield seats will have to hear the wheezing. They’ll have exclusive access to a private club, a private entrance and a private elevator, totems of this gilded age. Let the games begin.


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Vote Nader/ Gonzales 08'
don't support people who support corporate criminals!
Make corporate criminals accountable!

Adopt single payer national health insurance
Cut the huge, bloated, wasteful military budget
No to nuclear power, solar energy first
Aggressive crackdown on corporate crime
and corporate welfare
Open up the Presidential debates
Adopt a carbon pollution tax
Reverse U.S. policy in the Middle East
Impeach Bush/Cheney
Repeal the Taft-Hartley anti-union law
Adopt a Wall Street securities speculation tax
Put an end to ballot access obstructionism
Work to end corporate personhood
Defend, Restore and Strengthen
the Civil Justice System
Adopt the National Initiative

Well there they go again voting for big business.We the people who pay those politicians to give the big ceo,s tax breaks for their screw ups.Also lets not forget that 250,000$ thousand dollar bank insurance.How many middle class or poor men and woman have to worry about that.The president needs more weapons of mass destruction right!!!!! Remember that one people.Every poll says that the people do not want this bail out.Listen to the people!!!!! Quit filling your pockets.We need a new party to get elected in .The democrats and republicans have done nothing but run this one time great country into the ground!!! And killed alot of great service men and women doing so.I wonder how many will have jobs and homes to come back too.

Bill - Although I think your column is spot on, I'm not sure what is to be done about it. Government, business and sports have all been ruined by having more money at stake than is in any way reasonable. From the government side, until we the public can admit the truth that the vast majority of "campaign contributions" are simply bribes, typically offered before the fact, we will get the best government money can buy. Those politicians who provided tax breaks for Yankee Stadium did so in order to ensure their next campaign was financed.

At the business level it is apparent our business "leaders" have no shame. How many houses or cars can one person or family use? What is enough? The whole idea of a golden parachute is anathema to free enterprise; anyone decent at the job should take it for the same reason that Hillary climbed Everest: because it's there.

The USA is in big trouble.Are we ever going to retire those of us whom have worked all our lives? Is our money in banks safe?Thanks to the politicians I would say no no no!!!! When did a football,baseball,race car driver become more important and why do they make more money then a soldier who is fighting for everybodies rights and freedoms.Stop watching sports on t.v. people!!!!! Also how is it that a corporation like DELPHI can file chapter 11 a few years back but still sponser race car teams? When will it be illegal for ceo,s to run companies into the ground and get million dollar payouts? These people should be in jail!!!!!

What goes on behind closed doors should be private in your home, but not in government.
All public companies should disclose to all shareholders what each upper level manager receives for remunaration, directly and indirectly.

We the people get the government we vote for, and pay the price.

The public company stock holders should pay the price-or reap the benifits-of the management & directors they hire.

Maybe Phil Gramm was closer than we feel comfortable with. The shareholders are whinning about their mis-managed mis-fortunes, but don't want to pay the price.

The Savings & Loan melt down was not so long ago that our congress & govt. agencies, including Greenspan's FED all knew this was in the works--just don't let it be known on my shift.

PBS's An Unreasonable Man, reminds us of what RALPH NADER has been telling US for decades!

Now that the news is out ARE YOU REALLY GOING TO VOTE DEMOCRATIC OR REPUBLICAN?

We saw the enemy and it is us! We do more damage to our country than all the bad guys have done in total!

Senators Kennedy, Kerry, McGovern, Biden, Edwards all supported Obama, and just who do you think will be running his White House?

Well, Oprah may have a room, but, run the show? I don't know?

Billy Bob,

Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year – tax deductible...

Why-oh-Why are those suites Tax deductible expenses?!

Long ago, when I was part of the neighborhood team of seven, we chose names of baseball's biggies, and played our little games of baseball in a vacant lot.

As I grew older, other things came before baseball. Next thing I know, I am reading about these guys making millions on contracts. Then the owners began to browbeat and extort the politicians and others to get their new and glorious stadiums.

I have not been to a game since 1973, nor will I ever go to any game, so long as these same people use it to steal from the people to get their millions. I am not so inclined to be jealous of their making a profit, even a large one, but what they, the owners, have done is to rip everyone else off to build up their business, and those with enough money get the first choice. Those of us who are not wealthy, get what's left over, provided we can afford it.

I am ever so sorry to see this American game, baseball, and football as well, be turned more into something that no longer really reflects the claimed American values. Or is it now that they, the wealthy, are proclaiming a new sort of American values? If so, excuse me, but I will have to politely decline their values. I kind of prefer the ones that my parents handed to me, of which I have since passed on to my children. Even if some of those wealthy..."some" mind you, continuously stomp on my values.

And this is exactly the way that GW Bush made his millions: through taxpayer subsidies of his team's ballpark in Texas.

And it continues to be the way that this administration uses taxpayer dollars to subsidize Dick Cheney and corporate cohorts through no-bid contracts in Iraq...

The no end in site solution is here. We need a better way.

Back in January we had a discussion here http://www.pbs.org/moyers/journal/blog/2008/01/assessing_the_economic_growth_1.html about how to stimulate the economy. Some were saying we should have massive public projects like during the depression. I tried to make the case that it would be far better to use our industrial base to build innovative products, thereby putting us back in a manufacturing leadership position in the world, thus providing good jobs for Americans.

Now we are realizing that the American financial system is in terrible shape as well. I contend that it will not be permanently fixed without reactivating our domestic industrial base. Otherwise the banks will continue to lend money to each other and make high interest loans to unwitting people who have not a reliable basis to repay such loans. And now, the big news is, that the US Govt. will buy the bad loans. How do they think this will end?

It is possible to build high efficiency cars that are completely new and not at all like the conventional auto industry product. If adapted in large numbers, these would solve much of the oil dependence and global warming problem. I am suggesting that we rapidly adapt industry to produce millions of such cars with a wartime production attitude. Thus we would also restart the economy.

It is an essential premise that the cars produced would be high efficiency cars and not just conventional products. It is also an essential premise that we not get confused by marketing deceptions where electric motors and batteries are stuck in basic cars with the pretense of making a big difference, when in reality such modifications will only shift the energy source from oil to coal. Unlike wind and solar, where large capital investments are required, the cost of the high efficiency car solution is naturally funded as people buy new cars. No taxpayer participation needed.

When I say "we" should adapt industry to this new form of production I am thinking the general public. That general public needs to know that there are better alternatives to choose from, and then to demand products that are really different.

Some such possibilities are being entered in the Progressive Automotive XPRIZE competition and can be seen at http://www.progressiveautoxprize.org/prize-details/loi-contenders . Solutions like this could lead us out of the mess instead of on into an ever deeper disaster.

What's the point? During an economic downturn, there are still guys getting rich? Wow. Point the finger at successful people, as 99.9% of us will automatically be jealous of them and join the chorus of tsk-tsk.

By the way, what's your salary, Bill? How much do you make?

I agree wholeheartedly with Mr. O'Hara. There is an amazing book by Naomi Klein called THE SHOCK DOCTRINE that talks about the influence of the University of Chicago's school of economics and Milton Friedman in particular, on the World Bank, IMF, Treasury and US government economic policy. It would be very difficult for anyone who has not read this book to really understand what has been happening in the world since the 1970's.
Also, we need to do something to hold these CEOs accountable for what they have done. If they can't be brought up on criminal charges, then surely they can be sued. If they are allowed to get away with this and even get richer by it, how shall we stop this kind of unbridled greed in the future, and what shall we say to our grandchildren, whose future we have mortgaged now? We need to have televised congressional hearings where these people have to explain to the American people and the world what they did and why they think they should be compensated for the financial ruin they have wrought.

Thanks for using the term 'guilded age' without reservation. It has been whispered or handled, like the administration handles the word recession, for too long. Great reporting, there is also a big question about whether the property value was adjusted allowing more money to be pocketed.

There is a presidential candidate who has been talking about this on the campaign trail. Ralph Nader also released a 10 point plan on last tuesday detailing what he would do about the financial meltdown. Given the interview with Kevin Phillips, I would think you might mention a candidate who's been on topic for a decade, owes nothing to Wal*Street campaign donors, and has a record of regulation legislation as a citizen the envy of anyone on the Hill.

Thanks for using the term 'guilded age' without reservation. It has been whispered or handled, like the administration handles the word recession, for too long. Great reporting, there is also a big question about whether the property value was adjusted allowing more money to be pocketed.

There is a presidential candidate who has been talking about this on the campaign trail. Ralph Nader also released a 10 point plan on last tuesday detailing what he would do about the financial meltdown. Given the interview with Kevin Phillips, I would think you might mention a candidate who's been on topic for a decade, owes nothing to Wal*Street campaign donors, and has a record of regulation legislation as a citizen the envy of anyone on the Hill.

Oh you can talk about the Yankees but believe me, the Cowboys Football team has them beat all to heck and gone.

In order to get seats in the new Stadium going in, in Arlington TX (paid for by the tax payer) you have to have a seat license that is money before you get to buy your tickets.

This bought to us by ourselves (we voted it in) and an idiot mayor whose dream was to have them come to Arlington.

Arlington which is the biggest city in the nation without public transportation! A city divided by I-30 and rail road tracks. There are few ways under or over the rail tracks in the city but lots of trains.

You could do a whole broadcast on this throwing away of money.

This was o.k. as a "finger pointing" starter, but why not tackle one of the less obvious but equally culpable "villains"? What have the nation's leading business schools been teaching their students over the last several decades? How about an in-depth look at what the future captains of finance are learning in places like Harvard, Wharton, Yale, Chicago and Stanford? I think you might be surprised at what a close look would reveal. It won't be edifying stuff, I promise you.

Jim O'Hara
Associate Professor of English Emeritus, Penn State York

Who cares about drugged-up organized sports? If people had any sense they'd go play softball for exercise with their kids and boycott the damn games. Soon it would wear thin for the moneyed elite. It's a shame Ahmeerikans can't enjoy things without the sadistic pleasure of having their victims crouched below peeking through the cracks.

Bill and Mike, without a social contract with the working people money becomes a fiction and a fantasy. They can't eat certificates, can't even eat gold. See the survivors in Haiti hoeing the dirt and planting a crop, hope beyond hope! Will we soon join them?

I wish that I could say that I am surprised by this type of news but I'm not. From a mediocre movie comes a nice bit of wisdom, "first class use to mean a better seat, now it means a better life." It also means better connections to create and even better life. When you look at all the bad financial news that swirls around us, you wonder that there isn't rioting in the streets. Then again if we did that we might miss our favorite television program. Until we can come to realize that money shouldn't equal free speech we will never be rid of this type of sweetheart deal between the fat cats and the politicians. You would think that after the first $100 million you could start to throw a little back to the employees that helped get you there. Then maybe they could afford to take their kid to see a ball game....way upper deck of course.

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