Capitalism Meets Reality on the Plains of Armageddon

Henry Paulson and Co. keep kicking the crap out of that seemingly dead horse called the economy,

administering jolt after blistering jolt of stimulus.

It’s not the economy, stupid: it’s the people running it.

Alan Greenspan treated us this last week to his stimulating econobabble once again, and the gist of it was that there was nothing wrong with the models.  After all, they were based on the work of Nobel Laureates and the best minds in global economics.  These infintely nuanced models of how the market would and should react under different conditions had one thing in common with an early attempt at applying artificial intelligence to human endeavors, called “expert systems”.

What they had in common was… they didn’t work.  And they didn’t work because critical factors involving human motivations and tendencies were ignored or thought inconsequential to the larger and more elegant mathematical argument.

When pressed by legislators, the Maestro, as Bob Woodward and others have dubbed Greenspan, obliquely admitted that he may have been wrong in some respects.

Two important things that the free marketers and the high-flying economists seem to miss consistently:

1)  Humans in these systems rarely act altruistically, and

2)  Corporations, though deemed persons under the law, are persons without moral grounding, without conscience, without native intelligence, and having only two imperatives – survival at any cost, and neverending growth without regard to consequences.

I don’t think I want one living in MY neighborhood.

The fact is that unbridled capitalism, that is a free-market system without restraint, will eventually destroy itself, just as a socialist or communist system with no room for individual expression or recognition will.

With any luck, we’re as close to economic Armageddon as we’re gonig to get.  The bottom may be soft, and the markets may muddle around for a bit longer – six months or a year at worst, hopefully – but the people making up this economy are sound, they are motivated, and maybe for the first time in many years, a lot of them are hungry, some literally, some figuratively.

And it’s that hunger, that passion, that drive to thrive that will ultimately bring us back.

It’s the oversight and the leadership that has to change, as well as the culture of the business world.  Big business needs to be reminded – beaten like a rented mule if necessary – that with great power and great wealth comes great responsiblity.  Stockholders need to be reminded of this by management, and if reinvesting in people and in communities shaves a few percentage points off profits, well, that’s just part of good corporate citizenship.  It’s part of the price tag of the bargain between business and the taxpayers who are bailing out Wall Street.

The government has given the recalcitrant economic institutions the carrot.  Now, if they persist in their backward-looking and non-helpful hoarding of resources, continuing the credit crunch, the boys and girls in Washington need to bring out the stick.

It needs to be made abundantly clear to these companies that the taxpayer stake must be served, and if the existing management can’t find its way clear to endorse that, changes may be in order.

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Now, as we’re running toward the finish line, wear your beliefs on your shirt, and preserve a bit of the insantity of the 2008 election for posterity.

We thank you for your support and may the Higher Power of your choice rock your day.  The finish line is within sight.