AIG and big banks are the ‘Takers’ taking from the rest of us
In “The Fountainhead” and her other tomes of hyper-libertarian fantasy, Ayn Rand posits that society is composed of “Makers and Takers.” In her vision, it is the creative supermen of industry who are the Makers and it is the work-averse, collectivist leeches who feed off the wealth of capitalist empire builders who are the Takers.
This week’s news about AIG and the big banks suggests that Ayn Rand was wrong.
A pretty strong argument can be made that the Makers in American society are the millions of men and women who raise their children the best they can, take part in the life of their communities as coaches, classroom helpers and volunteers for a thousand good causes and put in long hours as employees keeping the nation’s businesses and industries going while receiving diminishing pay and benefits.
The Takers, on the other hand, include quite a few of Rand’s heroes. They are the big-time bankers, speculators, derivatives traders and others in the financial industry who operate in an alternate economic world that has little to do with making things or providing quality services and everything to do with devising esoteric, barely legal and frequently unethical methods of amassing fortunes for themselves.
Offering false promises of fiduciary prudence, the Takers dip into the 401ks, pension funds and home mortgages of the gullible Makers to finance their risky schemes. When the schemes pay off, the Makers get a small benefit while the Takers rake in obscene rewards. When the schemes fail to pay off or self-destruct so completely that they bring widespread economic calamity, the Makers suffer big time with lost jobs, lost homes and lost retirement funds. Meanwhile, the Takers still make out like bandits; it just takes a little longer.
In 2008, insurance industry giant American International Group, or AIG, was one of the several financial firms whose aggressive, high-risk business practices caused the meltdown and near collapse of the American economy. As a “too big to fail” operation, AIG received a controversial $182-billion bailout from the federal government – some of which went to pay for a luxurious getaway at a snazzy resort as a reward for top executives. AIG paid the money back, a point the company has been making in ads currently running on national TV. Yet, whatever goodwill the advertising may have produced was negated this week when AIG execs brought before the board of directors a proposal to join a lawsuit against the government to get more money out of taxpayers.
Wisely, the board rejected the idea after a firestorm of criticism arose. An ex-Obama administration official who dealt with the bailout was quoted as saying, “To paraphrase Churchill, the board did the right thing after having exhausted every other alternative.”
Though AIG’s bosses shied away from letting greed get the best of them (which must have been a novel sensation), many of the nation’s bankers were celebrating because earlier in the week industry-friendly federal regulators investigating thousands of improper mortgage foreclosures let them off easy. Ten banks will have to cough up fines totaling $8.5 billion. That may sound like a lot of money, but trillions of dollars were lost in the debacle brought about by bankers running wild selling and re-bundling home mortgages. Thousands of Americans were turned out of their homes. According to NBC News, if the $8.5 billion were divided equally among all the people who lost their houses, they’d each get about $850. Quite literally chump change.
Ayn Rand had the right idea; there are Makers and Takers. She just got their identities confused.
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