The awesomely affluent of high finance, if current trends continue, seem almost certain to survive the mess they’ve created — with their wealth and power largely intact. And Treasury and Congress don’t appear to really mind.

By Sam Pizzigati

The American economy hasn’t been working — for working Americans — for a generation. Over the last three decades, average American families have essentially had to make do with little more than stagnant wages and rising debt.

But this same economy has worked exceedingly well for America’s most financially favored. The nation’s richest 1 percent have, since the 1970s, over doubled their share of the nation’s income and wealth.

Last fall, this gravy train — for the rich — derailed. America’s biggest banks collapsed. The stock market tanked. The unthinkable, a real depression, suddenly became thinkable.

To the rescue came the feds. Bailout bills passed, loan guarantees flowed, confidence grew. The feared depression has receded, at least for the moment.

But where is our “rescued” economy now heading? Back to the “bubble economy” status quo that didn’t work for average people? Or ahead to a restructured economy that undoes decades of growing inequality and sets the stage for a lasting new prosperity?

Most signs, unfortunately, now seem to be pointing backwards.

Bank executives, for instance, are once again stuffing their pockets, just like the “old” days. Goldman Sachs, in 2009’s first quarter, set aside $4.7 billion for bonus compensation. At that set-aside rate, the New York Times points out, power suits at Goldman Sachs will see “almost as much as the pay in 2007, a record year.”

At Bank of America, a handful of power suits, after ingesting $45 billion in taxpayer bailout dollars, have personally gained over $25 million on the bank shares of stock they bought cheap earlier this year.

Bank of America and other top-tier banks, the Wall Street Journal reported last week, are also using the proceeds from the life-insurance policies they hold “on hundreds of thousands of their workers” to pay off the “bonuses, deferred pay, and pensions they owe executives.”

Executives at other financial giants — like Blackrock, a money manager about half-owned by Bank of America — are making big bucks running the bailout, on a day-to-day basis, for federal officials. Blackrock cleared a $786 million profit in 2008, a majestic sum that ensured Blackrock CEO Laurence Fink a $21 million payday and $26.2 million more for Bob Doll, a Blackrock investment officer.

The federal bailout effort isn’t, of course, supposed to be making anybody rich. The most visible federal bailout initiative, the Troubled Asset Relief Program, even carries a variety of limits on executive pay for the around 400 firms now getting TARP dollars.

But executives at these firms don’t appear to have any intention of letting these limits actually crimp their compensation. Bank execs are rushing to “pay back” their bailouts and escape the TARP pay limits.

These same banks, predictably enough, also have no intention of forsaking the federal bailout programs that don’t carry executive pay limits. These programs — the credit extended by the Federal Reserve, the loan guarantees from the FDIC — are enabling banks to borrow at low interest rates and lend out at high, a quick ticket to easy profits.

Treasury Department officials, for their part, have no intention of clamping down on the cash once again cascading into executive suites. The bailouts that Congress has so far blessed give Treasury Secretary Timothy Geithner wide latitude on enforcing executive pay limits — and Geithner would rather not do any enforcing.

“I don’t think our government,” Geithner noted last week at the National Press Club, “should set caps on compensation.”

Executives at bailed-out banks are arguing that executive pay limits leave them unable to compete for talent against hedge funds and other financial institutions that face no limits. Geithner appears to have bought in to that argument.

So do lawmakers in Congress. They could fix the talent competition “problem” by taking legislative action to discourage excessive executive pay across the economic landscape, not just at bailed-out firms. But lawmakers remain unwilling to take that step.

That unwillingness ensures that outrageously large windfall rewards – inside and outside the financial sector – will continue to give top executives powerful incentives to behave outrageously.

Senator Chuck Schumer from New York has, to be sure, just introduced a executive pay reform initiative that applies across the entire economy. Schumer’s bill — the Shareholder Bill of Rights Act of 2009 — would help dissident shareholders elect less CEO-friendly candidates to corporate boards and give shareholders the right to take advisory votes on executive pay.

“The best check against unchecked CEOs,” says Schumer, “is an empowered shareholder group.”

But Schumer’s let-shareholders-fix-it approach to executive pay essentially punts away congressional responsibility. We don’t, as a society, expect shareholders to protect us against CEOs who pollute the environment. Why should we expect shareholders to protect us from executive pay abuses that endanger our economy?

In a more accountable world, former International Monetary Fund research director Simon Johnson testified last week on Capitol Hill, “all key insiders” would be “fired when their banks become insolvent” and, on top of that, be subjected to “large fines” that at least equal the value of the compensation they pocketed “while leading the bank that failed.”

In the current U.S. economic meltdown, none of that has happened.

“As things currently stand,” Johnson noted bluntly, “powerful insiders have learnt that they can gamble heavily and never lose personally or professionally.”

Those insiders still have that power. Will we be content to hope they never gamble again?

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.