Mr. Galbraith has hit the nail on the head I am sorry to say. Indeed deposit insurance, Social Security, pension fund insurance all encourages irresponsible, reckless behavior. I have seen plenty of people living for today instead of saving for retirement. It will not be long before companies find a method to bail out of their pension funds (feigning bankruptcy or unprofitability) and leave it up to the government insurers to fund and payout our company pensions. After reading the works of economist Milton Freidman, I too had come to the conclusion that "The doctrines of the "law and economics" movement, now ascendant in our courts, hold that if people are rational, if markets can be "contested," if memory is good and information adequate, then firms will adhere on their own to norms of honorable conduct." The recent events have proven this so very wrong. Mr. Freidman failed to take into account in his theories what Mr. William Black so eloquently and correctly details in his book.
The fact that reputation no longer secures good behavior is due to the fact that wealth and power have replaced personal integrity as a virtue. We as a nation seem to respect wealthy and powerful people because they are wealthy and powerful not because of their personal integrity or righteousness. Once wealth and power are obtained, personal integrity can be purchased. To paraphrase the bible: "wealth and power is not the true evil. It's the pursuit of money and power to the exclusion of all else is where the true evil lies."
It is not surprising that George H.W. Bush's government is a part of the predatory culture. He grew up in wealthy family with all the associated privileges and trappings. His family's influence and wealth got him into Harvard and out of any military service. These are the only circles he has ever lived in or experienced. These circles of the wealthy have a few select goals, keep the maximum amount of wealth, obtaining more wealth and grab as much power as possible to maximize the efforts of the first two goals. He came to power on the conservative republican ticket. What is ironic, the very principles of conservatism were never fulfilled. The government is not smaller or more efficient and the national dept went from a surplus to a huge deficit. His administration has merely facilitated the predation by the wealthy.
His predatory regime not only did disservice to those hurricane victims but gutted the justice department by firing prosecutors of contrary opinion, hired over 100 inexperienced lawyers who graduated from Jerry Falwell's law school and replaced existing civil rights lawyers in the department with lawyers who had actually previously been in adversarial roles in their previous jobs. In addition, his administration moved IRS funding slated for use to audit the wealthy and is now using the money to audit middle income wage earners.
What mechanisms survive for calling the predators to account you ask? There are not many. Congress may have to amend the constitution for one thing so that congress is allowed to override pardons. Restoring and adequately funding financial and business oversight agencies. Creating new regulations that prevent criminals from hiding behind institutions and ensure that criminal wrongdoing is punished swiftly and harshly instead of ending with a golden parachute. Jail time has always been a great "reforming" influence. And above all, prosecute and punish all culpable parties not just the few at the top. They had a lot of help. In addition, make the guilty individuals financially responsible. Require an unprecedented amount of transparency into business and government. It is hard to hide when there is enough information on the Internet and millions of eyes watching. Predators need secrecy and misinformation. Give them nowhere to hide.
Not mentioned in the article but an important factor in my humble opinion, government sets the tone of the business climate. If you allow predation by complete deregulation, non-enforcement of the remaining laws and preventing recourse of those that have been the victims of predators, you are not only encouraging criminal behavior, you are guarenteeing it will occur.
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Peace.
Michael Santomauro
Editorial Director
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