It was perhaps the worst congress of the twentieth century — not a do-nothing congress, a do-awful congress. It was a congress that dispensed so much lard you’d think they had a pig-slaughtering house in the cloak rooms. At last count, the 109th Congress handed out over $50 billion in earmarks to lobbyists who bundled campaign contributions on their behalf. This congress also spent billions more in corporate welfare for Big Oil, Big Pharma, Big Telecom.
And don’t forget the congressmen who put both their hands into the trough and got back corporate gifts, junkets, and outright bribes. The Congressional Hall of Shame grew bigger this year with the notable additions of Tom DeLay, Bob Ney, and Duke Cunningham, all of whom got caught up in the Abramoff scandal. There was also that $90,000 that turned up in Congressman William Jefferson’s freezer.
Also feeding at the trough this year were defense contractors like Haliburton, who were found to have been wasting tens of billions of taxpayer dollars in Iraq and Afghanistan on projects that don’t work or never got built in the first place.
In addition, the chief executives of some of America’s biggest companies who handed themselves the largest salaries and bonuses on record, and – we now know – stock options back-dated to maximize their value.
It was a year when investment bankers on Wall Street raked in even more. Bonus time on the Street yielded tens of millions of dollars to some traders, hedge-fund managers and private-equity managers. How did they make all this money? Some, by timing trades. Others by taking companies private, loading them up with debt, cutting their payrolls, and then taking them public again. Others by monopolizing Initial Public Offerings and getting in on the juiciest ones before the rest of the public.
Most of the cost of this feeding frenzy by politicians, defense contractors, and Wall Streeters was borne by average workers, normal taxpayers, and small investors. Most of them did only modestly in 2006. Median wages rose slightly but adjusted for inflation were still below what they were in 2000, and health and pension benefits shrank, overall. Small investors did a bit better than last year but many still have not caught up with where they were in 2000.
But the biggest cost of all this has been to our democratic-capitalist system itself. When people at the top abuse their power, the average person loses trust in that system. The result is widespread cynicism. And if most people are cynical, how can anything ever change?