It the annuals of foot-in-mouth syndrome, few will ever be able to compete with Bob Benmosche, the entitled gas bag and so-called “in your face” CEO of American International Group (AIG). AIG is one of the most powerful multinational insurance corporations/mafioso syndicates in the world. It also just happens to be one of the mega-banks that melted under the weight of its own greed and had to be bailed out by taxpayers in 2008 to the tune of over $180 billion dollars. Why does that matter?
It matters because in a recent interview with noted organized crime publication the Wall Street Journal, Bob Benmosche complained that average Americans were lynching bankers. That’s right, lynching. Supposedly, Americans angry at AIG for paying out $165 million dollar bonuses to its various executives, the same executives who tanked their company and the world economy by making endless shady bets on mortgage bonds, were tantamount to a Jim Crow era Southern lynch mob:
“That was ignorance … of the public at large, the government and other constituencies. I’ll tell you why. [Critics referred] to bonuses as above and beyond [basic compensation]. In financial markets that’s not the case. … It is core compensation.
“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.
The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.
“We wouldn’t be here today had they not stayed and accepted … dramatically reduced pay. … They really contributed an enormous amount [to AIG’s survival] and proved to the world they are good people. It is a shame we put them through that.”
So, Benmosche didn’t just defend a bunch of financial market goons who should be stamping license plates rather than getting bonuses. No, no, no: he likened them to a persecuted minority, African-Americans, who, for, decades, were murdered without due process by racist mobs in the Deep South that employed “rough justice” to enforce white supremacy in the decades following the American Civil War. This wasn’t an off-the-cuff remark: Benmosche deliberately referenced the mob violence of Jim Crow, one of the most brutal and shameful periods in the history of the United States, because lynching evokes a visceral, historically vindicated injustice committed illegally by a privileged group against a persecuted minority. But since Wall Street bankers are the ultimate in privileged, overcompensated, drunk with power, insulated from the consequences of their poor business practices gang of miscreants on planet earth, Benmosche’s remarks got a predictably angry reaction.
This angry reaction is expected because lynching was a form of extralegal mob justice used to prevent real justice from being rendered. Lynching calls to mind deep American cultural conceptions of the threat of long-entrenched power relationships in society being overthrown. Above all, lynching in the Deep South was a tool to enforce white supremacy: the last resort of privileged scoundrels terrified by the thought of losing the cultural hegemony to which they laid claim merely by being born with white skin.
The Jim Crow era in the American South lasted broadly from 1876 to 1965. Following the “Redemption” of the South by the white supremacist Democratic Party, aided by the vigilantism of the Ku Klux Klan, southern state governments passed a series of discriminatory laws designed to reduce blacks to second-class citizenship. These included poll taxes, property qualifications, and literacy tests designed to prohibit blacks from voting. Other laws mandated racial segregation in public facilities and private, white-owned businesses. In 1896 the U.S. Supreme Court sanctioned black second class citizenship via the decision Plessy v. Ferguson, which stated that “separate but equal” was constitutional.
Despite using the law and economic discrimination to relegate blacks to the status of social pariahs, whites in the South still feared the spectre of racial equality. As the “New South” industrialized after the Civil War, new railroads and factories created new patterns of regional migration, spurring whites and blacks to move from place to place seeking employment. This resulted in increased tensions from racial encounters, as white men feared blacks would compete with them for jobs and intermingle with white women. Further, despite white attempts to limit black economic gains, a small but noticable black middle class emerged in the South by the late 19th century, stoking white fears of “uppity” blacks upending the long-standing racist social order. With slavery long gone, and with it, a time-tested system of controlling black Americans, white mobs resorted to lynching to maintain the racial status quo. These lynch mobs employed trumped-up charges of rape or assault to justify rough justice against African-Americans in order to keep said group in their “proper place” in society.
Oh, and lynching was brutal. Very brutal. Take the example of Sam Hose. In April 1899, a Georgia mob accused Hose of murdering his white employer and mutilated him as punishment. The lynch mob cut off Hose’s ears, fingers, and genitals, peeled the skin from his face, drenched him in kerosene, tied him to a tree and burned him while he was still alive. Needless to say, Hose, like all victims of lynch mobs, didn’t get a fair trial.
The sheer brutality of American lynching, coupled with the ideology of white privilege that it was supposed to uphold, is why Benmosche’s invocation of rough justice is galling. There is a corollary between lynching and the 2008 financial crash: both are horrendous historical events that seem contrary to American ideals but which nonetheless occurred, and were even sanctioned, by significant segments of American society.
Benmosche’s comments notwithstanding, Wall Street bankers are far from a persecuted group; if anything they hold a power to crush the less fortunate in a manner similar to that of the old lynch mobs, a power demonstrated by their reckless disregard for the lives, jobs, and savings of ordinary Americans and their relentless fight to kill any and all new financial sector regulations that might reign in their greed. Moreover, bankers, as did lynchers, fancy themselves to be upstanding citizens, despite acting like the scum of society. Members of southern lynch mobs were not “riffraff;” they were respected members of society that included small farmers, sharecroppers, construction workers, teachers, politicians, pharmacists, doctors, lawyers, and barkeepers. The participation of the “best citizens” in lynchings legitimized rough justice as an appropriate means of criminal punishment and racial control. Likewise, the modern American cultural proclivity towards associating wealth acquisition with all success in life legitimizes bankers’ behavior despite its destructive impact on the national economy.
In a way, Benmosche’s use of the lynching analogy to defend banking executive bonuses is entirely appropriate, except that he has the roles reversed. Rather than being the victims of illegal actions designed to maintain unjust privilege and power, executives at AIG and other such companies have acted like the lynch mobs themselves, using their corruptly earned power to maintain their privileged status in the face of overwhelming evidence that their practices cause real damage to the lives of millions of innocent people. Benmosche, like the average southern lyncher, can’t imagine that he is defending a corrupt system because he benefits from that system in a way that feels natural and wholly earned, despite all evidence to the contrary. He defends bankers’ actions because he considers them to be “best citizens” whose contributions to society make them “good people.”
Invoking images of lyncing harks back to an era in American history during which wrong was deemed right and notions of equality before the law, economic fairness, and social responsibility were perverted in the name of upholding the unearned power of one racial group. Nowadays, we see similar trends in society as solidly American ideals of market capitalism, meritocracy, and economic innovations are perverted by schmucks like Bob Benmosche in the name of the morally loathsome pursuit of wealth at any cost.
So let’s be clear here: there’s a difference between banks, which are institutions necessary to the modern financial world, and the type of financial casino rackets that AIG and other mega-corporations have been running for years. It’s the same difference that distinguishes necessary law enforcement officers from brutal lynch mobs. And like the lynch mobs, these banks need to be repudiated.