“As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?”
That observation from Alexis de Tocqueville was confirmed in the recent “ousting” of Boeing CEO Dennis Muilenburg.
Muilenburg oversaw production of the 737 Max — plagued by design flaws that appear to have caused the deaths of 346 people in two separate crashes last year.Embed from Getty Images
Boeing emails paint a picture of corporate corruption under Muilenburg, and a deliberate campaign to mislead regulators and customers.
In the words of one Boeing employee, “This airplane is designed by clowns who in turn are supervised by monkeys.” Another quipped, “I’ll be shocked if the FAA passes this turd.” But, it was passed. And people died.Embed from Getty Images
One Boeing employee showed the friction between otherwise-honest people, just trying to make a living, and a corporate culture that demands a complete lack of integrity in favor of profit.
“I still haven’t been forgiven by God for the covering up I did last year,” the unnamed employee wrote. “Can’t do it one more time. The Pearly Gates will be closed.”Embed from Getty Images
For creating that culture, and pushing out a defective product that claimed 346 lives, you might — in the fantasy of American justice and equity we’re taught as children — expect the CEO to be hauled out of his office in disgrace, if not in handcuffs.
Instead, he received a $62 million severance package, confirmed by Boeing the same day Wichita, Kan.-based Spirit AeroSystems laid off 2,800 people who worked in the 737 Max production chain.
The laid-off workers received 60 days of severance pay.
Muilenburg, who was directly responsible for Boeing’s failures, was rewarded with 983 years-worth of the median U.S. household income.Embed from Getty Images
This is shocking and disgraceful, but it’s not new.
Corporate malfeasance on a much grander scale led us into the 2008 financial crisis, which cost American families $9.8 trillion in home values and retirement accounts.
As a result of the 2008 train wreck, started under Bush, Obama failed to even begin investigations until the statute of limitations for criminal prosecution had, in most cases, passed. Not a single major bank CEO went to jail.
Instead, most of those who should have been jailed were rewarded with obscene retirement packages.
Citigroup CEO Charles Prince, who led the bank to a $17.4 billion loss in 2007, walked away with a $40 million retirement package — roughly the equivalent of the 2007 U.S. median household income, for 796 years.
Some didn’t even have to retire. Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department in 2014, then received a 74% raise, bringing his salary to $20 million.
Banks did pay $190 billion in fines between 2009 and 2015. But, that’s less than 2% of the value Americans lost. And, that $190 billion didn’t come from bankers, who were comfortably drifting into retirement in their golden parachutes. That money came from shareholders — in other words, from the same people who’d just lost huge chunks of their life savings.
Let’s put the damage to Americans by these robber barons in perspective.Embed from Getty Images
The 9/11 terrorist attacks cost an estimated $2.14 trillion in damage and economic losses. The Global War on Terror has since cost an estimated $6 trillion — including direct and indirect costs. Add all that up, and the economic loss — not to be compared to the value of the lives lost — still falls well short of the financial cost of the 2008 financial crisis.
And what of our other wars? In 2011, the Congressional Research Service compiled the costs, in 2011 dollars, of all our nation’s major wars. If you add them all together, from the Revolution to Iraq, the cost just in direct military expenditures is roughly $7.97 trillion.
In other words, in 2007-2008, a group of willfully negligent, greedy and utterly amoral bankers and CEOs caused more financial damage than 48 years of major wars, spread out between 1775 and 2010.
Why would we allow this to happen?
Eric Holder penned a 1999 memo, when he was deputy AG under Bill Clinton, explaining there would be too many “collateral consequences” from prosecuting large corporations and their CEOs for wrongdoing. In other words, their wealth placed them above the law.
Our disgraceful version of a justice department has since used that rationale to allow corporations and their mega-rich CEOs to defraud and endanger the American people, all under the protection of the self-interested politicians they buy.
And what do we do? Nothing. We are too busy blindly following one political party, while excoriating another political party, all the while failing to consider both those parties work against the American people to protect and advance the interests of the corporations that bought their souls.
What must we do?
Demand accountability. Demand corporations and the wealthy be held to the same standards of justice meted out for the working class and poor who are robbed at every turn in our current system.
And, if that makes a few banks and corporations fail, then, in the true spirit of capitalism, they shouldn’t have survived in the first place.
As one of the conflicted Boeing employees wrote, “Sometimes you have to let things fail big so that everyone can identify a problem … maybe that’s what needs to happen rather than just continuing to scrape by.”