British politicians and American corporate titans are targets of the public's wrath.
Britain was abuzz in June with a parliamentary scandal that all but knocked Scotland's middle-aged singing sensation Susan Boyle right off the front pages of London's leading newspapers.
"Darling billed us for two homes at the same time," screamed the big, bold headline at the top of The Daily Telegraph's front page. Alastair Darling, who as chancellor of the Exchequer is the equivalent of our Treasury secretary, had been caught double-billing for his residence. Labeled a "serial flipper" by the Telegraph for his practice of billing the government for improvements to a series of second homes, Darling was the latest to be exposed in the British Parliament's expense-account brouhaha.
If Boyle tugged at the heartstrings with her beautiful rendition of "I Dreamed a Dream" on Britain's Got Talent, then British parliamentarians tickled the funny bone with expense claims to challenge the imagination. In Washington, a few politicians and bureaucrats have been caught cheating on procurement deals, or accepting gifts without declaring them, or failing to pay taxes, or stashing cash in the freezer. But we haven't had anyone bill the government for cleaning his moat or refurbishing a duck pavilion in his pond. It's the small things, smacking of satire, that grab people's attention: Chancellor Darling got the government to pay for professional advice about tax treatment of a rental flat, for instance.
Casualties are mounting in the British scandal. On June 4, Hazel Blears, Prime Minister Gordon Brown's secretary of state for communities and local government, announced she would quit after revelations that she too had claimed expenses for personal gain. Blears followed Home Secretary Jacqui Smith and two junior ministers in heading for the exits. Others resigned from Brown's Cabinet as the month wore on. Political observers are saying that nearly half the 659-member House of Commons will resign or be defeated in the next year; and Brown's Labour Party is nearly certain to lose control of Parliament to the Tories.
The Economist observed that peccadilloes like those of the British parliamentarians don't always produce public revulsion.
In France, for instance, members of the National Assembly receive a tax-free allowance exceeding $100,000 on top of their salaries, no receipts, no questions asked, and no one seems angry about it.
Here at home, The Wall Street Journal followed in the Telegraph's footsteps with front-page exposés of U.S. congressmen's expense account claims: the leasing of a Lexus hybrid sedan and the purchase of a $1,435 digital camera, two 46-inch Sony televisions and a Panasonic Toughbook laptop. These surely don't have the cheeky and outlandish qualities of the Brits' excesses, although the unwelcome publicity had House Speaker Nancy Pelosi scrambling to get ahead of the story by pledging to post representatives' expense account data on the Web.
In France and Germany, The Economist reports, there's more anger at highly paid bankers than at high-living politicians. That's also true here; while Congress has long been unpopular, what's new is the palpable anger at the Wall Street tycoons and banking and auto executives. Personal use of corporate jets, gold-plated vacations, opulent third and fourth homes, and huge cash bonuses can produce every bit as much outrage as the cleaning of a moldy moat.
Our government's fast-growing stake in banks, insurance companies and the auto industry has afforded the opportunity to respond to the anger by clamping down on excessive corporate salaries and perks. At the same time, the government is assuming a lot of risk, not just financial but also political.
Its reputation, and attendant public trust, surely will decline if these huge departures from the capitalist norm do not succeed.