Former New York Governor and Attorney General Eliot Spitzer took aim at corporate influence in politics and blamed accountants, as well as lawyers and bankers, for allowing companies and their CEOs to get away with dodgy valuations and overblown compensation.
During a speech Tuesday at the New York University School of Law, sponsored by the American Constitution Society for Law and Policy, Spitzer derided the Obama administration’s increasing acquiescence to corporate America, including the recent extension of the Bush-era tax cuts.
“We have created a class in our society of what I call facilitators,” said Spitzer. “Facilitators — and we’re all part of it — lawyers, investment bankers and accountants. Our purpose is to be hired to justify the actions that are being taken by CEOs and others to run their businesses, and over time what has happened is that we have lost our backbone. We have lost our willingness to stand up and say, ‘Stop.’ There are a bunch of reasons for this. I’ve been in private practice and I know how those pressures are. We don’t like to look at our clients and say, ‘No, you can’t do that. I’m not writing an opinion letter that justifies that valuation.’ We don’t like to write a letter to the CEO saying, ‘No, you don’t deserve a 50 percent bonus.’ Those things don’t happen very often because we succumb to the pressures of our clients.”
Spitzer, who now co-hosts the news talk show “Parker Spitzer” on CNN after stepping down from the governorship in the midst of a sex scandal, criticized corporations for taking bailout money during the financial crisis and then calling out for tax relief and regulatory relief. He said the White House should have pushed for tougher conditions on the companies accepting the bailout money.
“For businesses to have accepted the checks and then to be the aggrieved party speaks to the failure of our power,” he said. He noted that the tax cut extension deal in December should have encouraged businesses to create more jobs, but so far that has not been happening.
Spitzer said that corporate America has succeeded in changing the narrative to portray business as rugged individualism, like the Marlboro Man. He pointed to how that narrative is fundamentally flawed and said that Obama should insist on the need for a progressive tax code harking back to the Franklin Roosevelt administration. At that time, the marginal tax rate was as high as 94 percent. Now it’s down to 35 percent. While Spitzer said he wasn’t advocating raising the rate again to 94 percent, he said that there is good reason for imposing taxes to provide for needs like education and infrastructure.
“We have seen this steady, steady descent, and nobody has ever pushed back and said maybe there’s a reason in fact we should have marginal rates a bit higher,” said Spitzer. “We let them set the terms of debate. We have embraced the Marlboro Man and refused to push back, and that has been much to our detriment.”