Moguls Steal Home While Companies Strike Out

Friday 19 September 2008

From our offices in Manhattan, we look out on the tall, gleaming skyscrapers that are cathedrals of wealth and power - the Olympus ruled by the gods of finance, the temples of the mighty, the holy of holies, whose priests guard the sacred texts of salvation - the ones containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.

If religion is no longer the soul of capitalism, as Max Weber once taught, we can travel just a few miles north of Wall Street to Yankee Stadium for a different metaphor to try to understand the continuing follies of the new gilded age. (Photo: Yale)

This last couple of weeks, ordinary mortals below could almost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landings - all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.

During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld's total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O'Neal, retired with a package valued at $161 million, after the company reported an $8 billion loss in a single quarter.

And remember Bear Stearns's Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac - aka the gods who failed - are fighting to keep severance packages of close to $24 million combined - on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.

But let's change the metaphor for a moment and go to our sports desk, because if religion is no longer the soul of capitalism, as Max Weber once taught us it was, we have to venture somewhere else to try to understand the continuing follies of the new gilded age. And so, we travel just a few miles north of Wall Street to the House that Ruth Built. Babe Ruth - the Sultan of Swat - who ruled Yankee Stadium and sired generations of princes after him: DiMaggio and Gehrig, Mantle, Maris, Berra and Jackson. Yankee Stadium, as fabled a place to Americans as Ilium was to the ancient Greeks, is about to be demolished and replaced next year by a brand new stadium.

On Opening Day in 1923, New York Governor Al Smith threw out the first ball and John Philip Sousa led a big brass band playing his famous marches. It was the Roaring Twenties, when the money flowed like bootleg whiskey, the pride before the fall. In 1930, the year after the market crashed, as the Great Depression began, Babe Ruth was taking home $80,000 a year, more than the president of the United States, Herbert Hoover. "Why not?" Ruth asked. "I had a better year than he did."

Yankee star Alex Rodriguez had a better year than both of them. This season, A-Rod is making $28 million, just part of an annual Yankee payroll of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country's richest tycoons.

But when it came to paying for the new, $1.3 billion pleasure dome, the millionaires on the field and King Midas in his skybox came up with some razzle-dazzle plays to finance their new wealth machine - tax-free bonds, requiring ordinary citizens to subsidize the construction, and hundreds of millions more for new parking garages, a train station and parks that supposedly will replace the ones seized by the city to make room for the new stadium. The Little League games that used to flourish on sandlots just outside the old ballpark have been moved miles away, sent down to the minors on a long road trip.

That's O.K., you may think; there will be plenty of room in the new stadium for the tax-paying public to come root, root, root for the home team - even the Coliseum in ancient Rome had bleachers for the commoners. But, in fact, there will be 5,000 fewer seats in the stands. And while the Yankees reportedly promise that half of what's left will cost $45 or less, those seats that used to cost $250, right behind the dugout, will now cost you $850. And if you want to be near home plate, you'll have to cough up $2,500 - per game.

Meanwhile, there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year - tax deductible - assuming they haven't filed for bankruptcy this week.

Why aren't the fans and taxpayers giving the Yankees a Bronx cheer? They did, but city officials rolled over them while making sure local politicians stayed in the lineup. The politicians are getting their own luxury suite at the new stadium for free - and first shot at buying the best available seats.

The new colossus will cast its majestic shadow across the South Bronx, one of the nation's poorest neighborhoods. The residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of New York City respiratory disease is already so high they call it "Asthma Alley."

Not that the well-to-do in the infield seats will have to hear the wheezing. They'll have exclusive access to a private club, a private entrance and a private elevator, totems of this gilded age. Let the games begin.

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Bill Moyers is managing editor and Michael Winship is senior writer of the weekly public affairs program "Bill Moyers Journal," which airs Friday nights on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers.