BIG BIDNESS OBSCENE? MOLLY SAYS YES.... Capitalism's crooks
dfw.com
Posted on Thu, May. 30, 2002
Capitalism's crooks by Molly Ivins
AUSTIN - It's time to connect the dots.
If you think the government is having a connection problem on the national security side, you should take a look at the starburst of dots on the economic side for a really stunning scandal. When you start to connect the dots on the business side, you will notice that we're being stolen blind.
One of the best interviews I've read in a long time is in the current issue of The Texas Observer with Bill Black.
[[RD: Coming soon, I've got it in the on deck circle...]]
Black is now an assistant professor of public affairs at the LBJ School of Public Affairs at the University of Texas. He is a lawyer, an economist and former litigation director of the Federal Home Loan Bank Board - which is to say, the man who went after the S&L crooks.
So Black's pretty much the perfect guy to analyze the Much-Bigger-Than-Enron mess into which the financial industry has now got itself.
In case you hadn't noticed, a mentality of crookedness has pretty much taken over many of the advanced reaches of capitalism. Or as The Wall Street Journal noted almost parenthetically on its front page last Thursday, "The failures of Wall Street's compliance efforts are coming under intense scrutiny - part of a growing awareness of how deeply flawed the U.S. financial markets really are. The watchdogs charged with keeping the financial world honest have all lost credibility themselves: outside auditors who bend the rules to please corporate clients, analysts who shape stock recommendations to woo investment-banking customers and government regulators too timid or overwhelmed to keep track of the frenzy." (Emphasis added)
The Journal is entitled to note this really rather major story parenthetically, since the paper has faithfully covered and uncovered much of the story itself.
Of course, the latest developments in the Chandra Levy case are more gripping, but I have yet to see a headline "connecting the dots" between Enron, Global Crossing, Merrill Lynch, Arthur Andersen, etc. The Texas Observer gets it: Where's the rest of the media?
What Bill Black calls "control fraud" is when the people who control the organization either set out to commit rank fraud or just drift into doing it. How they do it is fascinating in itself, but I was even more struck by Black's analysis of their motivation.
Says Black of the spectacular crooks of capitalism: "Do they know what is going on? Some part of them knows. People are very good at denial. In the criminal business, our jargon is 'neutralization techniques.' Rationalization is just one of those. For examples, the [Charles] Keatings of the world don't simply do the, 'Well, it's OK, everybody does it' type of rationalization. They have a much better variant. It's: 'We are geniuses. We are transcendent individuals, and we are dealing with stupid bureaucrats.' [[RD: Shades of Jeff Skilling's boffo act in front of Congress, alternately not remembering a thing and then dressing down the Senate....<g> ]]
"You tell each of your people - and you've hired very callow folks with very little experience - they are geniuses. You fire anybody who asks questions. That was the central rule. Pretty soon, you have a group of yes-men who think they are really bright. And the next step is to say, 'Not only are the government regulators stupid, but they are out to get us.' It's Us against Them. ... What we seem unwilling in our business culture to admit is that it became a fraud a long time ago in a broad range of businesses."
While it is a certainly a pleasant exercise to point out other people's moral failings, the larger problem is, as Black says, "you can screw up your economy big time. I have some hope that the collapse of our tech bubble, which was one of the largest bubbles in the history of the world, has also scared some folks into thinking that maybe this isn't such a clever way of doing it. Unfortunately, the attitude was, 'The rules are silly,' and, 'Aren't we so clever?' And that combination produces a lot of the worst disasters."
For me, some of the dots have come from friends who also happen to be corporate wives. It is quite striking how their level of concern about business morality has been rising off the charts. Connect the dots. |
