That Watchdoggie in the Window

The other day I called Jamie Galbraith--now the Lloyd M. Bentsen Professor of Government/Business Relations at the Lyndon B. Johnson School of Public Affairs at the University of Texas (which proves that God has an excellent sense of humor)--to ask the following question: "Jamie, are we having some kind of crisis of capitalism here, or is it just that everybody in the financial industry is a crook?"

"The two propositions are not mutually exclusive," replied the Lloyd M. Bentsen Professor. "It's both."

I found the following observation on the front page of The Wall Street Journal: "Now, 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." That's not The Progressive speaking, that's The Wall Street Journal.

We are being stolen blind by crooks pretending to be fundamentalist capitalists. Your fundamentalist capitalist is, mais oui (as we often say in Lubbock), the one who believes The Free Market Answers All. This is a theological position, beyond reach of persuasion by either fact or logic--not to mention history, experience, and time. The market fundamentalist doesn't understand that when capitalism is not regulated, it screws up with monotonous regularity, and reading the newspapers lately gives you a sense of how it works.

Big scandal: Enron and other corporate players bilked California during the energy crisis! Do you realize how pathetic that was? A massive, hideous rip-off, and all these latter-day Joads in California (many with purple hair, rings in their navels, tattoos on their kidneys and toy poodles dyed-to-match--you have to allow for California) cried over the months of ruthless pillage, "Where the hell is the Federal Energy Regulatory Commission? Where's FERC?" Well, FERC was occupied by regulators who came from a list supplied by one Ken Lay, chairman of Enron.