It could be the slogan that was, “let capitalists be capitalists.” It likely will be again, soon enough. But the “bailout” is coming soon with restrictions that Wall Street and others haven’t seen for awhile. Don’t hold your breath that the pending legislation will reverse much of the effects of deregulatory fervor that swept the Congress and the White House over the last 20 years. Don’t expect any significant reregulation either. But it is interesting to note that to the extent Dubya had an ambition to achieve more than his father, he will have succeeded in ways he never imagined. George H. W. Bush left office with a huge deficit and an economy in the doldrums. Dubya came into office in 2001 with a budget surplus and a reduced national debt; he will leave with an economy in shambles, a gigantic deficit and a major increase in the national debt. Tax cuts, increased spending without revenues to support it and “letting capitalists be capitalists” is demonstrably not the answer to improve the American economy.
Obama will tell you it’s Bush and his buddy McCain that helped make the current money morass happen. He is not entirely wrong but he is not entirely right either. Congress facilitated the mess by repealing the Glass-Steagal Act that kept the insurance, investment and banking businesses firewalled from one another. Institutional investors, including the pension funds that hold our retirement funds, could have exercised more of their clout in the proxy battles and the board rooms to hold management’s feet to the fire and restrained the most egregious excesses–but they didn’t. From a Buddhist perspective, to determine the causes made in the past one has only to look at the effects received today. So if we are suffering financial harm today, what did we do in the past? Well, some of us were also greedy. Some of us have cheated on our taxes, padded our resumes, paid for term papers written by others, goofed off and gotten over at work, etc. OK, so some of us may appear blameless. Nonetheless, we are suffering now. Take it as an opportunity to make the future better and take comfort in knowing that cause effect will work it’s way into the lives of the executives and the politicians who helped create this mess. We may need to help that along–in terms of the November election and the choices we make in investing our money, borrowing, etc.
Treasury Secretary Paulson and Republicans in Congress object to tying limits on executive compensation (especially “golden parachutes”) to bailouts in the legislation now pending. Even with such limits, a taxpayer revolt may be in the offing. Freemarket conservatives jump up and down, stamp their feet and scream “class warfare!” whenever anyone talks of raising taxes or placing limits on the obscene (and growing) wealth of the richest Americans. To which my response is–and your point?! Should the rest of us stand idly by while the government slaps us with the bill for the greed, the stupidity and the incompentence of those who run the financial institutions that got us into this mess? Now is the time to strike a blow for financial freedom for the serfs who serve the lords of the realm. Still, we are all not blameless. More on that tomorrow.