While visiting friends in Aspen last week, I had a close encounter of the
disgraced CEO kind: I spotted Kenny Lay, garbed in a spiffy jogging suit, getting
in a little morning cardio not far from one of the two multimillion dollar vacation
homes he keeps there. I guess that second-hand shop his wife opened to sell off
some of their booty has been doing brisk business.
Truth be told, such scoundrel sightings are not as unusual as they should be.
Despite the well-deserved roasting they're currently getting over the media spit,
many of the most notorious boardroom bad guys are continuing to live the high-life
to which they became accustomed while plundering their companies' coffers.
Even Adelphia's John Rigas, who was forced to do the newly-trendy EPW (Executive
Perp Walk) following his arrest, had enough spare change on hand to cover his
$10 million bail -- and was back home in plenty of time for a nice family dinner
with his indicted sons. You know what they say: the family that eats together,
The victims of corporate pillage, meanwhile, are not having it so easy. Faced
with scrambled nest eggs, sinking pension plans, shaky health coverage and a gloomy
job market, record numbers of average Americans are taking it on the chin -- and
in the wallet.
A key indicator of just how bad things have gotten for the little guy is the
record number of Americans -- 1.5 million -- who filed for personal bankruptcy
in the year ending March 31st. That's one out of every 69 U.S. households.
And since bankruptcies invariably lag behind current economic conditions --
they are the fiscal equivalent of those guys in the circus who follow after the
elephants with a shovel, trying to deal with the mess the parade has left behind
-- the odds are high that 2002 will be an even better year for bankruptcy attorneys.
The first quarter of this year has already seen a record 369,237 filings.
And it's important to note that only 3% of these filings are by people who
abuse the system by living extravagant lifestyles and then leaving their creditors
holding the bag. The majority are actually low to middle class people who can't
pay their bills because they've lost their jobs or been hit with crippling medical
bills or been enticed into running up unmanageable credit card balances by easy-credit
come-ons and here-today-gone-tomorrow "teaser" interest rates.
Nevertheless, Congress is on the verge of passing legislation that will make
it harder for people to start afresh after they declare bankruptcy while, not
coincidentally, adding billions of dollars to the bottom line of banks and credit
And why are our elected representatives so eager to add to the burden of consumers
struggling to rebuild their lives amidst tough economic times? Perhaps it has
something to do with the $27.5 million the finance and credit industries have
contributed to political campaigns since 1990 -- including $3,518,966 so far in
the 2002 election cycle.
In addition, credit card giants MBNA, Citigroup and Morgan Stanley were among
the top-10 donors to President Bush's 2000 campaign. Is it any surprise that the
president has indicated he will sign the bankruptcy bill as soon as it hits his
desk? It's the first law of politico-dynamics: You sign a President's checks,
he'll sign your bill. Anyone can buy public policy, but it's not cheap. If you
have to ask, you probably can't afford it.
For an especially sleazy example of how this Beltway quid pro quo works, look
no further than the case of Rep. Jim Moran, the chief Democratic sponsor of the
bankruptcy bill. It seems that back in 1998, Moran was about to be buried under
an avalanche of hefty credit card balances he couldn't pay off. Things looked
grim for the Congressman -- until he was bailed out by a sweetheart loan orchestrated
by the generous folks at MBNA.
In a move as shameless as it is despicable, Moran then turned around and helped
craft a bill that will make it harder for average consumers who find themselves
in the same jam he was in. Will MBNA ride to their rescue as well -- or will it
do everything in its newly fortified power to exact its pound of flesh?
It is particularly ironic that Congress was wrapping up its billion-dollar
gift to the banking industry during the same week executives of Citigroup and
J.P. Morgan Chase were lambasted on Capitol Hill for helping Enron defraud shareholders
to the tune of $8 billion dollars. Only in Washington could a pair of companies
be publicly raked over the coals -- exposed as bald-faced liars and criminal accessories
-- on a Tuesday, and then be blown an all-is-forgiven make-up smooch on Thursday.
So once again big donors get a kiss on the lips and little guys get a kick
in the rear, or someplace even more painful. And those trying to dig themselves
out of a mountain of debt are not likely to be given a boost by a contracting
job market with 8.4 million people out of work and more people seeking unemployment
benefits than at any time in nearly 20 years.
No wonder there is a growing anger among the dispossessed. "Never before have
I seen the fury and hatred that I'm now seeing on a daily basis," says David Bowman,
an employment consultant who tries to find work for people who have been downsized.
"You've got thousands and thousands of hard-working people who, through no fault
of their own, find themselves broke, out of a job, and with nearly worthless retirement
I realize that life isn't fair. But wouldn't it be nice if it were a little
more just? If Kenny Lay, instead of jogging around the streets of Aspen in sweats,
were jogging around a jail yard track in stripes?
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