Wall Street greed feeds populist rage across the U.S.

WASHINGTON, March 16 (UPI) -- Do the leaders of Wall Street want to set off an anti-capitalist political tidal wave across the United States that will sweep them away forever? It's certainly starting to look that way.

The directors of American International Group Inc. triggered a perfect storm of national anger and rage Sunday when they released a list of $100 billion they have paid out to around 80 recipients out of the $173 billion they received in a gigantic bailout payment from the U.S. government.

Goldman Sachs, Merrill Lynch, Bank of America, Wachovia, Societe Generale, Deutsche Bank, Barclays and UBS all received billions of dollars. Senior AIG executives, who had run the gigantic financial structure into the ground and imperiled the entire U.S. economy by their actions, nevertheless paid themselves $450 million in bonuses as if they deserved them.

They didn't earn them: Shares in the group now stand at 1 percent of the value they held two years ago, and 80 percent of the group is now owned by the U.S. government.

AIG defends the bonuses by claiming that it is contractually obligated to pay them. But that isn't sitting well with the people who agreed to give AIG billions in the first place -- the American people.

The scandal is a tremendous embarrassment for inexperienced young U.S. President Barack Obama. He has repeatedly said he doesn't want to govern from anger. Obama, his Treasury Secretary Timothy Geithner and his Chairman of the National Economic Council Lawrence Summers have already been outspoken about the shameless greed and arrogance of the AIG executives and other Wall Street bigwigs like them.

However, mouthing that kind of language while simultaneously complaining that nothing can be done about such behavior is hardly an exercise in inspiring and confidence-building leadership, especially as the administration's own economic measures have manifestly failed to even slow the dangerous economic decline. Last week Wall Street stock indexes rallied a bit at least. But they have still lost almost 20 percent in value in the less than seven weeks since Obama took the oath of office.

The New York Times reported Monday that Obama and his political advisers were concerned that anger at the AIG financial payouts and other documented scandals, corruption and outrageous behavior in the financial sector could set off an angry populist backlash across the United States.

The haunting new song from country and western singer John Rich captures the mood of rising proto-populism across America perfectly:

"While they're living up on Wall Street

"In that New York City town,

"Here in the real world they're

"Shutting Detroit down."

Any real populist backlash would take years to have any direct political impact on the composition of Congress, and if the economy shows signs of stabilizing and recovering this year or even next year, it will probably fizzle out. That has been the pattern throughout U.S. history.

The Grangers of the mid-1870s briefly proliferated following the Wall Street crash of 1873. The ferocious depression of 1893-96, the worst in American history to that date, led to the great prairie-populism cruise of William Jennings Bryan when he seized control of the Democratic Party at its 1896 convention in Chicago, Obama's hometown. However, a quarter century of prosperity and boom began right after the election that year of Republican William McKinley.

Even in the Great Depression of the 1930s, the fires of populism were tamed and channeled by the successful and charismatic leadership of President Franklin D. Roosevelt.

Obama, however, has shown no sign as yet of commanding the economic story. As financial analyst Martin Hutchinson has pointed out in his Bear's Lair columns, only about 11 percent of the Obama-Democrats stimulus package will actually directly produce any real benefits to the U.S. economy and national infrastructure. The bill is packed with the most absurd pork barrel self-indulgence, such as the funding plan for a maglev train from Los Angeles to Las Vegas in Senate Majority Leader Sen. Harry Reid's home state of Nevada.

If the Democrats continue to fiddle as America burns and the Republicans praise bailouts of bankers while opposing comparable aid to what's left of the once fabled American industrial sector, a neo-populist movement fired by the rage of hundreds of millions of smashed dreams is going to be inevitable. All that anger has to go somewhere.