US Catholic Faith in Real Life

It's the end of the splurge as we know it, and I feel fined . . .

Kevin Clarke | Print this pagePrint | Email this pageShare

I have spent many moments rubbing my eyes in disbelief in recent months as the financial world spun completely out of control (who can forget Alan Greenspan publicly stumbling upon a couple of the 7 deadlies for the first time), but can I really believe what I'm seeing in the news today (Oh, boy)?

No, I am not talking about the wonderful compensation tautology machine that was the late, great AIG ("I'm shocked, shocked to discover crony capitalism going on"). I'm talking about the sudden examination of conscience among the world's freemarketeers. Apparently MBAs have to go back to school to learn, um, not to steal, and is it my imagination or is Forbes calling for the end of capitalism?

Here's columnist Dan Gerstein fuming over "AIG's larceny":

"Herein is the silver lining of AIG's taxpayer gold digging. This most outrageous ripoff yet, as White House adviser Larry Summers called it, has ripped off the last remnants of the free-market mask on our economy and exposed the full extent of the broad fraud that American capitalism has become. Moreover, it's forcing all of us to confront our own complicity in this con--as well as the limitations of even our best-intentioned leaders to de-rig our degenerated economic system.

"In theory, that system, as we have been repeatedly told since the dawn of the Reagan Revolution, is supposed to be guarantor of the American Dream. The free market creates the ultimate level playing field, rewarding initiative instead of privilege. And it offers the ultimate accountability mechanism, allocating capital with ruthless efficiency to the opportunity seizers and profit makers, regardless of their status or connections.

"That's the uniquely American bargain most of us have bought into--and which differentiates us from the political economies of most of our developed competitors. We like our basic regulations that disclose information, prevent crime and keep our investments safe. And while we debate it at the margins, we like the modest government safety net we have constructed to protect us in times of trouble. But otherwise, we embrace the tradeoff of democratic capitalism--equal opportunities, not equal outcomes.

"The problem for most of us is not with that premise, which we have long accepted as flawed but functional and fair enough in practice. It's that, as we have learned over and over in the last several months, this idealized system is now total fiction, as phony as Bernie Madoff's returns and exponentially more damaging."

And don't miss The Nation's attempt to reimagine both capitalism and socialism in the aftermath of the great debacle.

What I find notable about the Forbes column, and what I have begun to see elsewhere in business media mea culpas, is a somewhat frank admission that the capitalist game was fixed, that the free market, certainly in regard to the compensation of global banking elite, upper corporate management, and their ilk, simply does not function, something that critics, often dismissed as effette leftists, have been pointing out for years. It is power and connections that set “fair” compensation, and for the most part these guys have been looting the companies they were entrusted to manage and grow while casting workers unto the untender mercies of the alleged free market.