Economics & Business

Riders to the Bank

J.M. Synge is not a name to send a modern aesthete into ecstasy, but in the days when English literature was taught in schools and colleges, rather than merely English, his plays were a standard text. Riders to the Sea, a moving depiction of the sorrows of fishermen who went out into the treacherous Irish Sea, was a personal favourite.

Like so many other perennially broke Irish writers in the first quarter of the 20th century, Synge preferred to live in Paris rather than Dublin. He had a good friend, Stephen MacKenna, equally penniless. When asked how they managed to survive, someone replied: “Oh, Synge lives on what MacKenna lends him and MacKenna lives on what Synge pays him back.”

This story is the finest metaphor for the current state of capitalism and the equation between the world’s most powerful governments and the world’s most powerful capitalists. Capitalists are living on what the government hands out, and the government is living on what the capitalists pay back. The fact is that both are broke.

The obscene manner in which Western governments have gifted money to irresponsible banks and corporations, without demanding a hint of accountability in return, has finally begun to shock the taxpayer whose money is being misused by fatcats. Misuse is an underestimation. Some of the facts about the behaviour of American chief executives are enough to make anyone vindictive. I offer a sample:

* Wells Fargo, the huge American bank which got $25 billion in federal funds, planned to use some of it on “employee recognition outings” at luxury hotels in Las Vegas. I get it. You don’t really begin to recognise an employee until you see him, or her, at a Las Vegas strip show or roulette table.

* Bank of America, which got $45 billion, sponsored a five-day carnival outside the stadium where the Super Bowl was played.

* Morgan Stanley, which received a mere $10 billion, parties at a three-day conference in Palm Beach, and was going to send senior employees to Monte Carlo and the Bahamas until the silly puritans called taxpayers stopped the dance. It is perfectly rational that senior bankers should hone up their expertise at gambling dens. They were gambling with their money, in any case.

* Citigroup, which was handed out $50 billion, flew out its former chief executive for a Christmas holiday in a company jet to a $10,000-a-night resort, just after it had sacked 53,000 employees worldwide. The jet was equipped with a full bar, fine wines, carpets, Baccarat crystal, Christofle silver and pillows made from Hermes scarves.

* John Thain, an auto executive, found himself in trouble for ordering a commode for the office that cost $35,000. Actually I have heard of an Indian fatcat who bought eight $20,000 commodes for his private use at home with office money, but then he may have got the same pot at Indian discount rates. So it is possible he is arguing before his board, if the board has the guts to question him, that he saved the company money.

In India, of course, we generally glorify and glossify, if one may be permitted to coin a word, anyone who steals shareholders’ money, so commodes are small excreta.

But at long last, one can see the first glimmer of the common man’s revolt against the arrogance, impunity and self-indulgence of the rich. Barack Obama, who is more populist than insurrectionist, would not have capped salaries of chief executives of funded firms at a pitiful half a million dollars, and delayed bonuses till funds had been returned, if he had not heard anger on the American street. One cannot accuse such executives of having lost their moral bearings, for they had no morals. What is probably far more dangerous is that they have lost their common sense. Wealth, individual and corporate, has removed them from the real world. They have been floating in a Paradise of bubbles and such has been their swoon of self-induced ecstasy that they did not hear bubbles burst even when their companies became beggars.

Feudal dynasts used to survive on the principle that they could never be mistaken, and if anything did go wrong it was someone else’s fault. Their rights and lifestyle were impervious to change. Capitalism has produced its own non-hereditary royalty, financed just as the old rulers were, by public money. Elected officials have become the conduits through which a thin veneer of legality is accorded to the loot of public monies.

Since globalisation has turned the world into a village, it is entirely appropriate that we take an instance from Singapore, on the other side of the world geographically but very much part of the “West” economically. A high-ranking government officer, a permanent secretary, has enraged the country by boasting about having taken expensive private cooking lessons in France. Tan Yong Soon spent $46,000 (Singapore dollars, but still dollars) on his three-member family to become educated in the arts of high cuisine. This did not go down too well with his fellow-citizens, thousands of whom are losing jobs or taking pay-cuts to survive. The bureaucracy, among the highest-paid in the world, has no such worries.

Correction: had no such worries. The heat of popular anger is beginning to singe the wings of high-fliers. People want success without excess, and when Synge and MacKenna lend and return to each other they had better do it in cash that actually buys something, rather than IOUs.

About the author

M J Akbar

M.J. Akbar, Chairman and Director of Publications, Covert magazine, is a leading Indian journalist and author. He is founder and former editor-in-chief of The Asian Age and Deccan Chronicle. After successfully launching and establishing a weekly news magazine, Sunday, and a daily newspaper, The Telegraph, in the '70s and '80s, he briefly interrupted his career in journalism to enter politics in November 1989 as an elected representative in Parliament. He returned to writing and editing in 1993. His last book 'Blood Brothers', in the words of Khuswant Singh, "could be a textbook on how to write, mix fact, fiction and history. It is beautifully written; it deserves to be in Category A1." Commercially speaking M.J. Akbar is that tangible asset without whom the balance sheet of Indian Journalism will never tally!

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