Unstoppable (23 page)

These seismic transitions proliferate outside public consciousness, business and law school educations, and, of course, the political electoral arenas. The immunity wave that has led to the replacement of responsibility and accountability is almost never discussed—a veritable, gigantic, quiet taboo. A corollary shield from criminal law for corporate malefactors is created by the fact that tiny government enforcement budgets have led routinely to plea bargains that permit modest settlements but no admission of guilt. No-fault government, no-fault giant corporations, and no-choice elections have become institutionalized against basic challenges by the people.

Meanwhile, government regulations have also been overtaken by the phenomenon of “regulatory capture,” as studiously pointed out by conservative economist George Stigler decades ago, though now put through with far greater sophistication and legislative assistance in favor of the regulatees and their insistent lobbyists and law firms. Making sure federal cops on the corporate crime beats have stripped budgets is another systemic strategy used by companies these days to keep their activities from scrutiny. The corporate crime wave, with its costs and corruption of government, reaches new intensities every decade, as there is more to take from the public purse.

The Financial Meltdown as a Fine Illustration of Corporate Impunity

That there is a broader immunity breakthrough was pointed out in August 2012 in the
New York Times
by writer Jesse Eisinger. Even
when the protagonists of deregulation, in this case the financial firms that lobbied to repeal Glass-Steagall and led to wild financial risk taking and disasters for our economy during Wall Street's self-inflicted collapse, and even when its principal promoters, such as Sanford Weill, the grand consolidator of Citigroup, regret what they did, thereby (to a degree) admitting their responsibility for the disasters, there are no authoritative calls for significant legal, occupational, or social sanctions against them.

Far from it. Here is Jesse Eisinger's lament, titled “As Banking Titans Reflect on Errors, Few Pay Any Price”:

As every frustrated American knows, no major banking executive has gone to prison or has been fined any significant amount in the aftermath of the financial crisis.

But what's astonishing is that Wall Street bankers seem not to have paid any social cost either. They sit on corporate and nonprofit boards and attend functions and galas. They remain top Wall Street executives, or even serve as regulators. The nation's prominent op-ed pages, talk shows and conferences seek their opinions. If you are rich, you must be intelligent. Your views must be worthwhile, never mind the track record.

The embrace of Mr. Weill sets a new standard for reputation rehabilitation. . . . Mr. Weill's only unambiguous success was to make himself enormously rich.

After recounting the serial collapse of the Citigroup Worldwide empire and its numerous scandals and violations of the law during the past generation, Mr. Eisinger asks, “What's a guy gotta do around here to lose a little credibility?”
²⁵

Former secretary of the Treasury under Clinton and shortly thereafter co-chair of Citigroup, Robert Rubin should be asking the same question. He profited immensely from the Citigroup mess—the company lost billions in the 2008 meltdown and had to
be rescued by the government afterward—and was proven wrong, but he still rides high, appearing right after the crisis in November 2008 in a photograph with a select group of invited advisors, next to the just-elected President Barack Obama. It was Rubin who lobbied from his government post in 1999 to repeal Glass-Steagall. A year later he opposed a bill to regulate burgeoning trading in riskier derivatives, one of the newly allowed results of the repeal whereby investment banking and commercial banking could be mixed, a process that erupted and eventually led to the spectacular speculative bust. It was Rubin, knowing the repeal of Glass-Steagall was imminent, who resigned his Treasury post and rushed to make $40 million in a few weeks, advising Citigroup in the fall of 1999. It was co-chair Rubin whose strategies helped steer the ship of Citigroup onto the rocks while he himself was still making big money.

He has not yet recanted from the gigantic folly of his concoctions. He is still sought after for interviews, except about his role as an escape artist, and invited to give advice to potentates and politicians. Rubin experiences no shunning and is on the social circuit in New York and Washington, DC. Nassim Taleb, author of the super-bestseller
The Black Swan
and financial scholar, says of Mr. Rubin that “nobody on this planet represents more vividly the scam of the banking industry.”
²⁶
As Jesse Eisinger said: “What's a guy gotta do around here to lose a little credibility?”

The Good Old Days When Corporate Criminals Actually Went to Jail

These two cases, and the many like them, are telltale signs of the rapid decay of any kinds of restraining or punitive sanctions being given to those who perpetrate serious corporate misdeeds, a decay made more visible when today's situation is compared to what happened in the previous bank collapse of the savings and loans twenty years ago, when hundreds of bank officials went to jail.

One other problem is that the deep and reckless pushing further of the frontiers of immunities for the corporate power structure does not occur within any recognized legal or ethical frameworks around which public dialogue and electoral contests can engage. This is in marked contrast to what was available at the time of the decentralists, whose moral vision of the good life and startling ability to go beyond economics and doctrinaire ideologies put such corporate skullduggery in perspective. This fully justifies our giving their views a closer look in the historical contexts of their and our time. Certainly their view of localism, small business, and cooperative-style ownership is still resonant and is being put into practice by the current spread of community economies, as noted earlier, facilitating wide new possibilities by harnessing locally many recalled and modern technologies. These modes of life reject the “servility, and regimentation, [and] degradation of human values,” in the words of Professor Shapiro's foreword to
Who Owns America?
.
²⁷
But they need the expanded public consciousness that would give them greater diffusion.

To those who would say that it's always been that way, corporate criminals have always gotten away with it, the historical reply is “not quite.” Many high Wall Street operators went to jail after the October 1929 stock market crash. The president of the New York Stock Exchange, patrician Richard Whitney, went up the Hudson to Sing Sing Prison; photographs of him in handcuffs were printed on page 1 of the country's newspapers. President Franklin D. Roosevelt denounced these reckless bankers and speculators as the “enemies of peace,” and he named strong regulators to the new federal law enforcement agencies.

Yet now the latest gang of Wall Street miscreants walk free. I have seen neither studies nor any explanation that would suggest how to reverse the frustrated public acceptance of this fact, other than putting pressure on Congress and the White House. Notwithstanding C-SPAN, twenty-four-hour cable news, finger-tip
Internet, and access to the blogs and websites of dissidents and rebels, the anomie of the populace taken together just deepens. From somewhere we need a spark to action leading to a surge of civic determination to activate our constitutional authorities and assert our sovereignty. The people's sense of injustice is widespread enough to warrant some optimism.

The Forward Legacy of
Who Owns America?

Not surprisingly, when
Who Owns America?
came out on April 28, 1936—a presidential election year—it did not have much influence on contemporary politics. All over, schools of thought, political practices, and public earnestness were concentrating on
relief
, not basic
reform
. But concrete, principled ideas matter, and they can lie fallow for years before the times afford the proper soil for their seeds to sprout.

There were reviews of
Who Owns America?
in major newspapers and magazines that pointed to the decentralists and agrarians as impractical utopians, out of touch with the inevitability of Big Business, big industry, and these entities' own possible discipliner—the federal government. After all, at the time the people had a president whose fireside radio speeches satisfied many Americans who needed a perceived champion against concentrated power. An FDR sample: “I should like to have it said of my Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.”
²⁸
But Professor Shapiro does quote one notable commentary by the publisher of the
American Review
, Seward Collins, who called
Who Owns America?
“the most significant book produced by the depression. It contains more sanity and penetration, more sense of American realities and American history, more grasp of economic fundamentals, more enlightened moral passion, more insight into what is happening
and . . . into what will happen than the whole monstrous spate of depression books put together.”
²⁹

Today we live in a polity possessed of shrunken perspectives, where elective offices are political sinecures, with the occupants serving corporate bosses. Almost all the politicians are for sale—with few enough successful exceptions to point to as the preferable, contrasting alternative of politicians actually concerned with the good of the people. The 24/7 distractions of Internet and video inundations have given birth to a new generation of aliterates with alarmingly shortened attention spans.
³⁰
Worse by the year, historically deprived youngsters are split off from their own communities and neighborhoods, with which they scarcely interact, preferring to be glued to, even addicted to, watching screens hour after hour, sitting entranced while clutching their iPhones in their hands. Yet, even in this state, some young people are still reading. Let's hope they get their hands on books such as the one I have scrutinized in this chapter.

Who Owns America?
is the question for our times, immersed in expanding urgencies that cry out, “Take heed, take heed, or pay the price!”

8

Common Ground for Common and Uncommon Causes, Found in the Thoughts of Much-Cited but Little-Read Conservative Icons

T
he previous chapter, as well as my earlier remarks on the unorthodox thoughts of various much-cited but seldom-read icons of conservatism, has shown us that by shattering images and avoiding cherry-picking, progressive readers of conservative/libertarian literature will come to the conclusion that, program by program, there is plenty of room for LCs to converge and work together on system-altering actions.

One by one, the titans of the Right demonstrate that their principles are not frozen against the tides of realities and their own human values. A few more remarks on the flexibility of these icons might be apropos here. Friedrich Hayek wrote that the state should assure a base income to all the poor under its jurisdiction. The Austrian economist also declared the need for “a legal system designed both to preserve competition and to make it operate as beneficially as possible.”
¹
Carl T. Bogus, a biographer of William F. Buckley Jr., wrote that Hayek “advocated regulatory mechanisms
to prevent fraud, deception, and monopolies, and said there was a strong case for government providing ‘some minimum of food, shelter, and clothing, sufficient to preserve health and capacity to work,' and organizing a comprehensive system of social insurance for sickness and accidents. Nevertheless, the principal theme of his work tied together freedom, democracy, and capitalism.”
²
All were tied together to oppose socialism. Adam Smith noted “the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.”
³

That is a lot of common ground shared with progressives, visible once the selective references to Hayek's work by today's Paul Ryans are cast aside. As economist Peter Boettke of George Mason University and editor of the
Review of Austrian Economics
has said: “What Hayek has become, to a lot of people, is an iconic figure representing something that he didn't believe at all.”
⁴
What Hayek intensely opposed was government planning of the economy and its inherent complexity, corporate subsidies, chronic deficit spending, government housing programs, and any state initiative that is not applicable to all the citizenry. Illustratively, he opposed Medicare and Medicaid unless they were applicable to all citizens.