Storm the Bastille!
Expert Perspective by Grahall’s OmniMedia Editorial Board
Two articles last week draw stark attention to the growing economic disparity that exists in America between Main Street and Wall Street. The first article published on October 20 in The Wall Street Journal by Phred Dvorak and Scott Thurm (Slump Prods Firms to Seek New Compact With Workers) shares that: “Since the downturn began, thousands of employers have cut pay, increased workers’ share of health-care costs or reduced the employer contribution to retirement plans.”
The article concludes with a quote from Phil Erickson, a longtime employee of Unisys. He “says he and colleagues understand Unisys needed to reduce costs in tough times. In his mind, the cuts underscore how the workplace is changing.” He goes on to say ‘Now you’ve got to look out for yourself, take care of yourself’.”
Clearly, most American workers are aware of the cost cutting efforts employed by their companies to weather the difficult economic times of the past 12 to 18 months. Yet, despite having been bailed out by the taxpayers, there are more than a few folks on Wall Street who haven’t had it quite as tough. In an article published in The New York Times on October 16 by Graham Browley (Bonuses Put Goldman in Public Relations Bind) the author shares that: “While many ordinary Americans are still waiting for an economic recovery, Goldman and its employees are enjoying one of the richest periods in the bank’s 140-year history…. For Goldman employees, it is almost as if the financial crisis never happened… Top producers are expecting multimillion-dollar paydays…Goldman executives know they have a public opinion problem, and they are trying to figure out what to do about it — as long as it does not involve actually cutting pay.”
This level of pay disparity is a burgeoning problem and has implications far beyond Goldman’s Public Relations team’s damage control efforts. It represents a fundamental change in the way that the American workers view themselves, their country, and their way of life. While Americans have long cheered success and been buoyed by the sense that anything is achievable, it appears that the nation’s admiration and awe of Wall Street’s Masters of the Universe has been replaced with anger and contempt.
The WSJ article illustrates this new reality. “Lloyd C. Blankfein, Goldman’s chairman and chief executive, finds himself in the unusual position of defending a successful company in a nation that normally celebrates success… Blankfein has even urged his free-spending bankers to be mindful of conspicuous consumption.”
The most apt historical reference for this disparity in 21st century American socio-economics is the period preceding the French revolution in the late 18th century . Reading a Wikipedia entry, the causes of the French revolution, we find that Louis XVI fought many wars, bringing France to the verge of bankruptcy, the national debt [soared]… The inefficient and antiquated financial system was unable to manage the national debt, something which was both caused and exacerbated by the burden of a grossly inequitable system of taxation. Another cause was the continued conspicuous consumption of the noble class, despite the unprecedented financial burden on France’s working class. High unemployment and high bread prices caused a greater proportion of income to be spent on food and less in other areas of the economy.
War*, unemployment, burdensome national debt, and a Wall Street “aristocracy” who failed to be mindful of conspicuous consumption in a time of widespread economic suffering. Let’s hope these trends don’t result in America’s own “Les Misérables”.
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* Ironic that Wikipedia includes the cost of French intervention in our American Revolution among factors contributing to the French economic crisis at that time.