Lust, anger, and greed. We all know how wicked these passions are. In any religion, these are the weighty ones -- what the church I grew up with calls "cardinal sins."
But thundering about sins from the pulpit distracts us from recognizing that we were all born with "lust, anger and greed." We didn't inherit them; in my opinion, God made us this way -- it's part of the baggage of life.
We love to read and hear about other people's "sins" -- partly to feel elevated above that sort of thing, and partly because we're voyeuristic. It helps us push to the back of our minds any awareness of our own indulgences. Indeed, some of us do cope better than others with sins of passion. But when given the temptation of a good financial opportunity?
Oh, not me, we say to ourselves. Look at those guys on Wall Street. What about those bonuses they pull down? And for doing what? Skinning us? Well, in fact, skinning the next guy has more polite names: competition, free enterprise, capitalism. These are not just words from the dictionary; they are political symbols. We are a culture obsessed with money. How much money one makes is our basic measure.
Nevertheless, I still think capitalism is the most effective economic system we have yet devised -- and it is also probably the most effective way of channeling greed that we have yet tried.
The problem with capitalism is that it can quickly get out of control. An instrument of capitalism, such as a bank, for example, intended to provide a service, can move on to fleece those it supposedly serves. Since maximizing profits is considered a virtue, free enterprise can move with alacrity towards the kind of disaster that causes bankruptcy and job losses -- even nationwide and throughout the world. That is the genesis of the Great Depression and the current (yes, still current) Great Recession.
There are only two solutions to limiting this exercise of greed: instituting restraints that are enforceable by law (with penalties that bite), or using fear to repress greed, just as we repress lust. When I was a lad, our fear of venereal disease was indeed considerable, just as it is with HIV today.
Repressing greed is difficult. In our present culture, greed is held aloft, admired as "success" or "winning." Free enterprise is revered as if it were a religion. Criticism of capitalism is close to being unpatriotic ("Watch it, Buster!").
Now, back to my favorite reference, my grandfather, Franklin Roosevelt. He didn't wince or mince words when criticizing big business and the financial community, or the Republican Party. Arthur Schlesinger Jr. sets the scene clearly in The Politics of Upheaval, 1935-1936:
As Roosevelt looked back over his administration, he thought he had displayed great forbearance. The New Deal, he believed, had saved the position and the profits of the businessmen. He had forgiven their errors of the past and their lack of ideas for the future. And now organized business was assuming what he [FDR] regarded as a posture of indiscriminate, stupid, and vindictive opposition.
Schlesinger went on to quote Elmer Davis, a well known reporter and political pundit at the time: "[I]f anybody ventures to imply some lack of confidence in Business, Business is terribly hurt, and calls him a crackpot and a Communist." Schlesinger continued, "The rich may have thought that Roosevelt was betraying his class; but Roosevelt certainly supposed (as Richard Hofstadter has suggested) that his class was betraying him."
Over and over again those with power, through their control of the institutions that manage money, take advantage of the rest of us. A book detailing this repetitive phenomenon has just come out, Jeff Madrick's Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present. It is such a good geography of our current landscape that major columnists are reviewing it.
Paul Krugman, reviewing it in The New York Review of Books with Robin Wells, wrote:
As Madrick quotes [Milton Friedman], "The Great Depression, like most other periods of severe unemployment, was produced by government management rather than by inherent instability of the private economy." Replace "Great Depression" with "the financial crisis and its aftermath," and it could be John Boehner today, rather than Friedman in 1962, speaking these words. Like Reagan, Friedman proclaimed a creed of greedism (our term)--that unchecked self-interest furthers the common good.
The major beef I have with President Obama's administration, as I have outlined in previous posts, is its lukewarm efforts to impose restraints on business and, worse yet, refusing to push public understanding of just who is responsible for our current economic crises.
Federal prosecutors [in the summer of 2008] officially adopted new guidelines about charging corporations with crimes -- a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis. Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks.
The Justice Department in this way lets the banks off practically scot-free. The Administration's support for major banking reforms seems to be in name only, as it just pecks at the problems. We never hear the kind of plain statements condemning the business and financial communities for their misdeeds that Reich, Krugman, Rich, Sachs, and other columnists record in detail.
In contrast, FDR said, "Practices of the unscrupulous money changers stand indicted in the court of public opinion." And my favorite: "Private enterprise, indeed, became too private. It became privileged enterprise, not free enterprise."
Even Herbert Hoover remarked, shortly before his exit, "You know, the only trouble with capitalism is capitalists--they're too damn greedy."
Their comments are as relevant today as they were during the Great Depression. Must we hark back to Roosevelt and Hoover in our search for political leadership?