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Opinion

Forget tea parties. Bring a pitchfork to a shareholder meeting.

If you want a revolution, hold corporate elites accountable.

By Mark Lange / May 5, 2009



San Francisco

President Obama is taking on unaccountable corporate elites this month. Why aren't you? You probably own shares in these companies; your government doesn't (at least not yet).

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Those Tea Party people are right to rage. But they're reenacting the wrong revolution. When Louis XV's war debts drove France into bankruptcy, people chafed at taxation, yes – but also railed at an impaired financial system, high unemployment, scarce services for war veterans, conspicuous consumption, and public detachment on the part of an entitled elite. Sound familiar?

In 1789, heads rolled. Today, you're getting rolled.

Anyone with a 401(k) or pension should visit at least one shareholder meeting this month with a pitchfork – or at least a plastic picnic fork – and demand accountability from the corporate elite, particularly in the financial sector, before they eat any more of your lunch.

We seem resigned to raising the first generation that may not do better than its parents. Why? Because we let elite money-changers become our new nobility, building empires trading vaporous financial abstractions, deliberately blind to the risk they still inflict on public solvency and your hard-earned retirement savings.

Succored by government, America's business and financial elites have assumed a pervasive ethic of entitlement – and suckered the rest of us.

Their "innovations" triggered a massive redistribution of wealth – upward. Mortgage banking became a masked predators' ball. Credit-card terms picked commoners' pockets. And still the middle class dances along, while derivatives and junk debt inflict the largest global economic disaster in seven decades – forcing federal guarantees of $11 trillion so far.

Feeling bailout fatigue? The elites just party on. CEOs from Bank of America to Wells Fargo just proclaimed inflated profits through accounting foolery. And last month, for the first time, credit default swaps (CDS) directly triggered a bankruptcy, the largest in US real estate history (General Growth Properties).

This particular event raised moral hazard to an art form. Typically, lenders who want to recover their money work to save troubled businesses. But with CDS, lenders can cash in if a business goes bankrupt. Thanks to federal bailouts, these bankers voted their board seats to force a bankruptcy, and then cashed in using money you paid in taxes.

Imagine home insurance agents rushing to a burning house and bribing the fire department to shut off the hoses, so they can bet on it burning to the ground – and then collecting profits from taxpayers when it does. This makes the Somali pirates look principled. At least they take the direct approach.

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