By Bryan Jones, UW professor of political science
A few days ago, Washington Mutual, the nation’s largest savings and loan, announced bonuses for its top executives. During the year, the management team had managed to lose almost $2 billion and engineered a stock price drop that cost shareholders two-thirds of the value of the company. The bonuses were substantially less than the year before, but bonuses are bonuses—supposedly pay for exceptional work.
This happens all the time. There is a safety net for the paid managers of America’s companies—they benefit no matter how poorly they perform. Conservative economists are fond of saying that if you reward bad behavior, you’ll get more of it. So in effect, today’s crony capitalism in America is building in the guarantee that we will get more poor-quality capitalism.
I am really not sure why the issue of gross inequality has not come to the fore in the presidential campaign. All the Republican candidates save Huckabee think things are hunky-dory. Obama wants to avoid such talk because he fears making anyone mad, especially the independents and Republicans he courts. Hillary raises money from them. Only Edwards, who has found little traction, is courageous enough to talk about the class warfare that the rich have mounted against the rest of us.