Time for some real progress

"The old-fashioned concepts of 'debt' and 'property,' or 'liabilities' and 'assets,' are not fairly applicable to the facts of the case--except, of course, in the way of technical legal distinction. The old-fashioned law and legal presumptions, and the new-fashioned facts and usages are parting company, at this point ...."
--Theory of Business Enterprise, Thorstein Veblen, 1903.

So we've been here before. Business practice and malpractice out-running the political systems that try to rope in the extreme capitalism inherent in American business. The current age of corporate and public corruption rightly reminds us of the notorious Gilded Age 130 years ago. But we should not believe that the old solutions of domestic political reform will be enough. The evil demon is out of the bag. There are numerous safe havens where corporations and investment scammers can operate. Much Internet fraud and phishing originate from rogue operations beyond even the long arm of "rendition." This time around we need a change in public values, and in international co-operation.

1) Admit it. Debt is the new cocaine. We need serious debt recovery therapy. The shopping mall is not your friend. The credit card isn't either.
2) No more instant gratification. Try lay-aways, or simply doing without. Can we bring back the local repair shop for household appliances?
3) Why are CEOs, sports and movie stars really our most valued citizens? Many have shown a small degree of social responsibility, or concern for fellow humans. Barry Bonds and Bernie Madoff are not role models. Which actor do you want to be when you grow up?
4) We must stop letting pollution and finite resources be used for free or a small fee. True total costs should be calculated for environmental and health impacts: from logging to coal mining to NASCAR racing to smoking. We need real carbon taxation, everywhere on earth. We have one atmosphere for the whole planet. We cannot continue to buy cheap goods made in nations with no environmental laws and enforcement. Get clean or find another planet. We have just one.
5) The economic crash has real social costs. Tent cities are back. Let's deal with it.
6) The stock market is neither a rational nor a democratic institution. Stop encouraging people betting their future lives on the crap shoot that is the stock market. Did we really expect CEOs and CFOs paid largely in stock to tell the truth on a quarterly report? Privatize social security, anybody?
7) Health care: cut the insurance companies out of the equation. Their purpose is to make money not help people get or stay healthy. Big pharma should not be allowed to lobby medical professionals. The FDA needs to work for the public not the drug makers.
8) Education, science, technology--these will make the U.S. strong or we will fall further behind in alternative energy, new generation batteries and other tech of the future.
9) Energy efficiency must trump financial calculations: we really need to send recycled material to China and then ship it back? This is simply bone-headed profit-grubbing.
10) Any attempt to monitor the behavior of huge corporations must be international. No national government or viewpoint is big enough to keep track of UBS, AIG, GM or any of the other acronyms that now straddle the globe.
11) Is the MBA really a worthy degree? Do we really value further training in the manipulation of the business system? Have business values totally corrupted American higher education?
12) Anti-trust: they understood this back in Veblen's time. Anything too big to fail is too big. The best way to stop the financial AIDS epidemic now infecting the world's economy: would have been prevention. We need some prophylactic regulations and oversight. Keep the horse in the barn.

Comments

[Henry]

I remember once listening to Ralph Nader invoking "the leisure of the theory class" to make a joke about the professorial class. The whole issue with securitization of subprime mortgages was to create more immediate wealth (and monetize it) than would otherwise exist with the making and closing of a conventional mortgage loan. When you have a revolving market of $10 trillion or so and you can bump it up by $700 billion, you have done well. New wealth for the economy that it never before had realized. But... the method of attaining this enlightened status had many new elements i.e. stripping the interest, principal, first lien, and second lien positions into separate tranches sold as separate securities. And then the assignments of mortgage interest to the various parts. And then putting them into the blender. And now asking that they be liquidated. This is a fine mess you've gotten me into this time, Ollie. Most professors, by the way, approved of all of this. At least in theory.