Justice_ What's the Right Thing to Do_ - Michael Sandel [7]
Americans are harder on failure than on greed. In market-driven societies, ambitious people are expected to pursue their interests vigorously, and the line between self-interest and greed often blurs. But the line between success and failure is etched more sharply. And the idea that people deserve the rewards that success bestows is central to the American dream.
Notwithstanding his passing reference to greed, President Obama understood that rewarding failure was the deeper source of dissonance and outrage. In announcing limits on executive pay at companies receiving bailout funds, Obama identified the real source of bailout outrage:
This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we certainly believe that success should be rewarded. But what gets people upset—and rightfully so—are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.27
One of the most bizarre statements about bailout ethics came from Senator Charles Grassley (R-Iowa), a fiscal conservative from the heartland. At the height of the bonus furor, Grassley said in an Iowa radio interview that what bothered him most was the refusal of the corporate executives to take any blame for their failures. He would “feel a bit better towards them if they would follow the Japanese example and come before the American people and take that deep bow and say, ‘I’m sorry,’ and then either do one of two things—resign or go commit suicide.”28
Grassley later explained that he was not calling on the executives to commit suicide. But he did want them to accept responsibility for their failure, to show contrition, and to offer a public apology. “I haven’t heard this from CEOs, and it just makes it very difficult for the taxpayers of my district to just keep shoveling money out the door.”29
Grassley’s comments support my hunch that the bailout anger was not mainly about greed; what most offended Americans’ sense of justice was that their tax dollars were being used to reward failure.
If that’s right, it remains to ask whether this view of the bailouts was justified. Were the CEOs and top executives of the big banks and investment firms really to blame for the financial crisis? Many of the executives didn’t think so. Testifying before congressional committees investigating the financial crisis, they insisted they had done all they could with the information available to them. The former chief executive of Bear Stearns, a Wall Street investment firm that collapsed in 2008, said he’d pondered long and hard whether he could have done anything differently. He concluded he’d done all he could. “I just simply have not been able to come up with anything… that would have made a difference to the situation we faced.”30
Other CEOs of failed companies agreed, insisting that they were victims “of a financial tsunami” beyond their control.31 A similar attitude extended to young traders, who had a hard time understanding the public’s fury about their bonuses. “There’s no sympathy for us anywhere,” a Wall Street trader told a reporter for Vanity Fair. “But it’s not as if we weren’t working hard.”32
The tsunami metaphor became part of bailout vernacular, especially in financial circles. If the executives are right that the failure of their companies was due to larger economic forces, not their own decisions, this would explain why they didn’t express the remorse that Senator Grassley wanted to hear. But it also raises a far-reaching question about failure, success, and justice.
If big, systemic economic forces account for the disastrous loses of 2008 and 2009, couldn’t it be argued that they also account for the dazzling gains of earlier years? If the weather is to blame for the bad years, how can it be that the talent, wisdom, and hard work of bankers, traders, and Wall Street executives are responsible