June 17, 2009

Better Fetters for the Parasitic Profiteers

Let's assume we recover from our near-collapse. If we do, or even if we pretend to, we need to ponder the overarching lesson we should learn from all this: UNFETTERED CAPITALISM DOES NOT WORK.

The problem is that those who have prospered because they are not fettered by principles or even shame have framed the debate so it looks like an argument between market freedom and shackles.

They would prefer, of course, a Darwinian system based on the survival of the fittest.  

Talk about an un-intelligent design. They conveniently overlook the need for a society to serve not only a few ruthless "survivors" but the entire community of people who make their contributions outside the wolf pack.

In fact, we are able to impose restraints without hobbling the creative energies that bring progress and, dare I say it, prosperity.

Sweeping though the new proposals, it may seem they are merely tentative steps toward regulation by a government and political system that is impotent when it isn't corrupt.

As the Obama Administration revs up its new framework for oversight, the self interests are already battling to protect their enablers at the agencies which are battling over their turf.

Compared to what needs to be done, these can only be small actions – more motion than movement. And that's before the devils get hold of the details.

What we really require are truly bold actions to restructure an economy that currently leaves out far more people than it includes.

What kind of actions? How about the kind that makes mergers very, very difficult to accomplish. The rush toward bigness more often than not rolls right over the employees and communities that makes the companies lucrative in the first place.

The only ones who benefit when these shotgun marriages are consummated are the profiteers who make billions turning these once-proud corporations into mere ledger items. Everyone else gets what we usually get during a consummation.

What inevitably follows is a rush to impose "efficiencies" and "synergy" to make the new behemoths pay off. There's nothing inherently wrong with efficiency and synergy of course, but those words are usually semantic camouflage. What they really mean is layoffs and plant closings and corner-cutting in customer service and manufacturing.

Finally, once the accountants, lawyers and financial manipulators along with their executive hand maidens have picked the financial bones of their newly created hybrid, they liquidate and go on to strip mine their next company.

What's required is the financial equivalent of land management. Part of that should be a stringent effort to control the predators that are a constant danger to the environment we all must share.

Tortured metaphors aside, we truly do need to make sure that we make regulation something other than pretense and loopholes. It is possible, by imposing brakes on larcenous impulses, that we could create a system that encourages innovation as well as fairness. That way we could all benefit instead of the small group of unfettered hustlers who have thrived in the current business frontier.

It will be fascinating to watch how they find ways to circumvent the new rules. They will. While they do, they will make sure to thwart any effort to create the protections we need – not fetters but serious restraints, and will leave them free to continue their parasitic conduct that sucks the juice out of everyone else.