The New Welfare Queens
by John Avlon
Forget the old scare stories of the poor
defrauding the government. John Avlon says the great entitlement
grab in history is coming from bankers, the new symbols of government
The greatest entitlement grab in American history has come from
the least likely of places-not the welfare queen, the poster child
of government dependency, but Wall Street.
The original welfare queen was the oft-cited
star of one of Ronald Reagan's favorite anecdotes from his 1976
campaign. "She has fifteen names, thirty addresses, twelve
Social Security cards, and is collecting veteran's benefits on
four non-existing deceased husbands," the Gipper said in
genial tones. "She is collecting Social Security on her cards.
She's got Medicaid, getting food stamps, and she is collecting
welfare under each of her names."
Now we've got both populist anger at big
business and big government. It's a perfect political storm.
The term quickly skull-sunk into the lexicon, becoming short-hand
for the dependent (and, in this telling, criminal) underclass
lurking in the heart of the inner city. The insult to injury was
that the welfare queen was living high off the hog on hard-working
middle class paychecks. A righteous tax revolt was not far-behind.
It turns out the story, while mostly apocryphal,
did have one an actual antecedent-a woman from the south side
of Chicago who was busted in 1976 for using four identities to
defraud the government out of $8,000. She aimed low. She should
have worked at AIG.
This week we found out that 400 lucky
AIG executives got to split $165 million of taxpayer money in
bonuses, despite running their company into the ground. But they
are far from alone-the failed federally owned mortgage company
Fannie Mae just announced they plan to pay 4 execs more than $1
million each in retention bonuses. Bank of America granted 6,200
brokers bonuses after taking $15 billion in taxpayer bailout funds.
Former Merrill Lynch CEO John Thain found $1.2 million to redecorate
his office-complete with a $1,200 trashcan and a $35,000 commode-after
his 94-year old company was flushed down the toilet. And these
pungent tales of excesses may ultimately pale next to the misuses
of taxpayer funds we don't yet know about.
Forget welfare queens. We've never seen
an entitlement mentality quite like this-where bonuses were not
rewards for work well done but guaranteed entitlements written
into high-end contracts. The AIG financial division folks managed
to have no performance-based criteria for their bonuses. And despite
bankrupting a company they still felt entitled to an extra helping
of tax-payer cash. Apologists claim such compensation packages
are necessary to retain talent in a competitive business culture.
Others point to the inviolate nature of contracts and shrug apologetically
while pocketing the cash. Apparently "accountability"
is just a word for management power-points-it has no meaning for
these folks when it collides with self-interest. Proportion and
perspective have lost their meaning as well-if you mention that
the average household income United States is around $50,000 a
year, they squint as if you're talking about another species.
That's a fraction of financial industry base salaries, let alone
bonuses-even after the house of cards collapses.
We're heading for pitchfork politics here
in America. Even during the economic gains of this decade, prosperity
didn't trickle down to the middle class because of increased energy
and healthcare costs. Union members who are being asked for necessary
concessions to keep their companies financially afloat are seeing
executives play by an entirely different set of rules. And now
a demographic that might be called the working wealthy is bracing
for tax hikes in a recession while their portfolios have been
decimated-all while the Wall Street super-rich with multiple mansions
are relatively insulated (assuming they're not under indictment).
After watching the jet-set excesses of the Madoff-class from afar,
Main Street Americans are left with less and still asked to clean
up their mess.
This new populist anger isn't going to
fade away anytime soon. History shows that demagogues rise when
the economy turns south. During the Great Depression, populist
anger was directed at big business, pumped up by voices like Huey
Long on the left and Father Coughlin on the right. When conservative
populism reared its head in the late 1960s, anger shifted towards
big business. But now we've got both- populist anger at big business
and big government. It's a perfect political storm and Republican
and Democrat incumbents could be equally vulnerable to associational
attack come 2010.
John P. Avlon is the author of Independent
Nation: How Centrists Can Change American Politics. Avlon was
director of speechwriting and deputy director of policy for Rudy
Giuliani's presidential campaign. Previously, he was a columnist
for the New York Sun and served as chief speechwriter for then-Mayor